Health Insurance Articles
The Benefits Of A Preferred Provider Organization Medical Insurance Plan
2010-09-09
Preferred Provider Organizations (PPOs) are composed of physicians, specialists, labs, acute care facilities, and laboratories that agree to receive an agreed-upon fee-for-services. They are different from HMOs, as the insured has more autonomy and can make decisions regarding when to see a specialist without obtaining permission from the provider organization, which can sometimes take several weeks or months to secure an appointment. In the PPO network, a referral is not required to see a specialist. Medical insurance plans vary, but members can pay a co-insurance of 20 percent of the in-network provider charge, and the PPO will pay 80 percent of the established charge. These plans are typically more costly, but there are fewer restrictions concerning service provider choices.
In the event of a hospital stay, the patient is also responsible for their percentage of the hospitalization costs on a pre-authorized admission or in the event of an emergency admission. Additionally, there is an annual deductible that must be met each year before plan benefits are activated. For example, in the typical plan, the individual annual deductible is $500 and the family deductible is $1,000. After this amount is paid, physician's visits with a plan cost of $100 are $20 out-of-pocket cost. Therefore, one benefit of the PPO is after the deductible, there are no surprise costs, as the patient's costs for network providers is 20 percent, typically, and out-of-network services are 50 percent.
The Preferred Provider Organization employs registered nurses who serve as case managers. They make decisions regarding hospitalizations and diagnostic evaluations. For example, the case manager will decide after an appendectomy, the plan will pay for three days of a hospital stay; if there are complications, the case manager meets with the hospital administration staff and the physician to determine if additional time will be allocated or provided. In some cases, the patient's needs would be better served in a skilled nursing setting rather than the more expensive acute hospital setting. The patient has more freedom of choice, but will be required to submit forms to obtain the plan services.
For the person with many health inconsistencies and who requires the services of several specialists, the PPO is ideal. There is no waiting for a referral; the patient simply makes the appointment with the in-network provider and pays their co-pay/co-insurance, or an out-of-network provider and usually pays a higher percentage of the charges. Unequivocally, the patient's wishes and desires will be met in a more expedient manner.
The primary benefits of the PPO is it usually is employer funded and is economical medical insurance for the family, it provides convenience, and gives the insured independence and control in health care decisions.
