Managed care is one of the most popular healthcare models in the United States besides the Fee-for-Service model. Indeed, many people who are covered by Medicaid are enrolled in some form of managed care program. This form of health insurance contains three different categories that work in similar ways but have some key differences: Health Maintenance Organizations (HMOs), Point of Service (POS) models and Preferred Provider Organizations (PPOs). A PPO isn’t as restrictive as an HMO about how and where the patient gets their care, but the tradeoff is that it’s more expensive to get care in this way.
What Is A Preferred Provider Organization?
A Preferred Provider Organization (PPO) is much the same as a Health Maintenance Organization (HMO) except for a few specific allowances. As an overarching characteristic of the managed care model, HMOs generally fold patients and healthcare services into a well-defined network of providers, hospitals and healthcare organizations. These doctors and hospitals are contracted by a third-party organization to provide care, and one of the terms of the contract is a set amount of payment per patient, along with discounts and savings on all fronts for being a part of the HMO. The same is generally true of a PPO, as well.
PPOs have one major difference, however, that sets them apart from HMOs, and that is the ability to go out-of-network for care. In an HMO, patients are only able to see doctors under contract within the network, and also only when referred by their specified primary care provider. This arrangement saves both parties money in the long run. However, the tradeoff restriction is that an HMO in most cases (except for scenarios like emergency care) will not cover out-of-network treatment or doctor visits. A Preferred Provider Organization, on the other hand, loosens up these restrictions by covering patient care even when the patient does decide to go out-of-network. This allows patients flexibility in getting different opinions and treatment options while still having coverage. However, the trade-off of such a plan is a higher out-of-pocket cost on the patient’s end.
This also means that in a PPO, patients don’t have to choose a specific primary care provider through whom their treatment plans and needs can run. Such a scenario is particularly helpful if the patient wants to see specialists or specific providers without a referral and still have their care covered. But patients are still incentivized under a PPO to see providers within the network because staying in-network saves them significant out-of-pocket expense. However, if the patient doesn’t want to be constrained about what provider they choose to see, the only penalty is a higher bill.
Where DECO Comes In
In the complicated healthcare world, coverage and financial models can be tough to understand. But our job at DECO is to understand these things and help your healthcare organization do the same while implementing solutions that save time and money. The result, along with our strategies and our ability to work collaboratively with hospitals, clinics and providers, is cost savings on all fronts and an improved revenue cycle. So if your healthcare organization needs help with getting reimbursed for services rendered and helping patients get covered by health insurance plans, we’re here to make that happen. Contact us today for more information!