Preferred Provider Organizations (PPOs)
A Preferred Provider Organization (PPO) provides a list of contracted "preferred" providers from which to choose. You receive the highest monetary benefit when you limit your health care services to those providers on the list.
If you go to a doctor or hospital that is not on the preferred provider list (referred to as going "out-of-network"), then the plan covers a smaller percentage of your health care expenses or may cover none of your health care expenses based on the contract wording of the plan. Always check with your PPO or consult your list of preferred providers before you seek health care services to make certain your physician or hospital is a contracting provider (part of the network). Make sure that your doctor refers you to health care providers within your PPO network, if applicable.
PPOs in California may be regulated by either the CDI or the California Department of Managed Health Care (DMHC) depending on whether the contract or policy was issued by a licensed insurance company or a managed care company. The DMHC regulates HMOs and plans issued by Blue Cross of California and Blue Shield of California. The CDI regulates policies issued by insurance companies such as BC Life and Health Insurance Company and Blue Shield of California Life and Health Insurance Company. If you are confused about whom to call regarding a PPO problem or concern, then consult your plan documents for regulatory information.
Important Points to Remember About Preferred Provider Organizations:
- You receive the highest monetary benefit when staying within the PPO network.
- You may have the option to go outside the PPO network at a higher monetary cost to you.
- Check to make sure your doctor or any specialist referred to you is part of the PPO network before utilizing covered services.
- PPOs can be regulated by either the CDI or the DMHC depending on if the company that issued the contract is a licensed insurance company, or a managed care plan. PPOs can also be self-funded. If you need assistance and you are not sure which agency regulates your plan you can contact the CDI or the DMHC for clarification.
Health Maintenance Organizations (HMOs or Managed Care)
Membership in a Health Maintenance Organization (HMO) requires plan members to obtain their health care services from doctors and hospitals affiliated with the HMO. It is common practice in HMOs for the plan member to choose a primary care physician who treats and directs health care decisions and who coordinates referrals to specialties within the HMO network. The doctors and hospital personnel may be employees of the HMO or contracted providers. Since HMOs operate in restricted geographic regions, this may limit coverage for plan members if medical treatment is obtained outside the HMO network or coverage area. California HMOs are required to cover medically necessary emergency services even when outside of their coverage area. The intent of managed care products is to create less costly delivery of health care services while maintaining quality health care. HMOs offer access to a comprehensive package of covered health care services in return for a prepaid monthly amount (premium). Most HMOs charge a small co-payment depending upon the type of service provided.
All HMOs in California are regulated by the DMHC. If you have a complaint with an HMO, contact the member services department of your HMO. HMOs are required to have an internal complaint/grievance process in place. If you file a grievance and it has not been resolved within 30 days or there is some question as to the HMOs decision, then you may contact the DMHC for assistance. Please see contact information listed for the DMHC in the "Resources" section below.
Important Points to Remember About Health Maintenance Organizations:
- You must obtain health care services from HMO providers, except in certain emergency situations.
- Your choice of primary care physician is important because he/she directs your care. Also, your primary care physician often coordinates referrals to specialties within the HMO.
- Your options may be limited by the geographic restrictions of the HMO network.
- You may be charged a small co-payment each time you utilize an HMO covered service.
- You can seek assistance from the DMHC on all HMO and managed care questions.
There are many variables and fine print when it comes to Medicare. If you have any questions, please contact us here.
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