A Preferred Provider Organization (PPO) is a system in which an insurance carrier established contracted or negotiated fees for all medical services rendered. A PPO also offers out of network benefits, meaning that if you wanted to visit a doctor who was not in the network the insurance carrier would apply any charges you received towards your out of network deductible. This is not as confusing as it sounds, and I will do my best to illustrate how this works. First of all, the deductible is the amount you would be responsible to pay first before the insurance carrier starts paying for any inpatient or outpatient benefits rendered in the course of a calendar year. Often times the deductible is waived for routine preventive care benefits and doctor office visits, but for anything else out of the norm such as advanced imaging services (MRIs, CT Scans, Outpatient or Inpatient surgery, emergency room visits, etc.), you will receive an explanation of benefits from the insurance carrier indicating what you should expect the provider to bill you.
PPO Examples of Coverage
An illustration of this would be a CT scan performed in an emergency room is billed as $1700.00, but the allowable amount or CONTRACTED fee for that service already established with the provider is $500; hence you would expect to receive a bill from the hospital for $500.00 that to the insurance company is automatically applied to your annual deductible. The hospital, on the other hand, does not automatically do anything except bill you so you would need to contact the hospital and set up a payment schedule, i.e. $100 a month, and make the payments to them accordingly.
If this emergency room visit was at an out of network hospital then you may be responsible to pay the billed amount of $1700, but your insurance carrier would not consider this OUT OF POCKET or not covered medical benefits, but rather, they would apply this amount to your OUT OF NETWORK DEDUCTIBLE.
Your out of network deductible is usually twice that of your in network deductible. So, if you had a $2500 annual IN NETWORK deductible then you would probably have a $5000 OUT OF NETWORK deductible. The bottom line is, a PPO offers more flexibility in benefits received by a policy holder. You do not need to obtain referrals to visit a specialist although there is often prior authorization required to have a MRI (you cannot just go have an MRI performed for peace of mind, a doctor must order the MRI). A PPO, however, will be more lenient in their definition of prior authorization whereas a HMO may request you to jump through flaming hoops and wait a month before they cover a MRI.
Although a PPO allows you to receive benefits from an out-of-network provider, it is more advantageous to remain within the in-network of providers who have accepted the contracted fees for medical services and usually a PPO will have a robust national network of participating or preferred providers.
We offer many different PPO health insurance plans including plans from Blue Cross Blue Shield, Cigna, Humana, United, Aetna (in many states it is a POS), and many more depending on your state.