There Are So Many Different Health Plans Out There. What Does All Those Letters – Hmo, Ppo, Pos, Etc.—Mean?
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UPDATED: Aug 20, 2020
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HMO: An HMO (Health Maintenance Organization) is an organization that provides or arranges for coverage of certain health care services required by members of the organization. Typical HMO coverages include access to a primary care physician, emergency care, and specialists/hospitalization when needed.
Many HMOs operate with preventative medicine in mind by addressing your health care needs while you are healthy so as to prevent disease or illness.
Critics of HMOs address concerns as to a lack of selection of primary care physicians, “assembly line” medicine, and denial of adequate referrals in the event of disease or illness. Critics often claim that a HMO may deny certain claims and may make health care decisions based upon a pure profitability standpoint as opposed to decisions driven by providing the best level of care for its patients.
HMOs are valuable in providing good care for many members – many HMOs organizations take very good care of their members’ health care needs while managing costs.
IPO: IPO (Independent Provider Organization) operates by having an HMO contract directly with independent physicians to provides services to HMO members.
PPO: PPO (Preferred Provider Organization) is a form of managed care under which health care providers contract to provide medical services at pre-negotiated rates. Members who subscribe to a PPO are required to use the health care providers who participate in the PPO network – utilization of a health care provider outside the PPO network may result in the member paying more out-of-pocket for services which could have been provided within the network.
HMOs often use a PRO (Peer Review Organization) to assure that members receive appropriate services that meet professional standards of care. Complaints regarding levels of service are often referred to the PRO for resolution.
POS: POS (Point of Service) plans allow the individual policy holder or certificate holder to visit out-of-network, non-participating doctors for a fee. If the services of a non-participating health care provider are utilized, the individual often obtains restrictions of benefits or incurs more out-of-pocket costs.