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Referrals for HMO and POS Plans
PPOs and EPOs Bypass Referrals
Payment
Depending on the type of health insurance you have, you may not be able to go straight to a specialist when you think you need the services they offer.
If you have ahealth maintenance organization (HMO) or point of service (POS) plan, you’ll probably need to go to your primary care physician (PCP) first. If they agree that you need to see a specialist, they’ll refer you to one and make note of it in your medical file. Some health plans require that the referral be made in writing while others accept a phone call.
If the health plan requires a referral from a PCP in order to cover visits to a specialist, you’ll need to make sure that the referral has been sent to the specialist and the health plan before you schedule your appointment with the specialist.
This article explains how referrals work with HMOs and POS plans, and how they’re generally not required in PPOs and EPOs. It also points out how insurance payment for services within a designated network varies based on whether the plan is in-network or out-of-network.
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In most cases, heath maintenance organizations (HMOs) require you to select aprimary care physician(PCP). The physician is then responsible for managing all of your health care going forward. This authority includes making recommendations for treatment, medications, and other issues.
The primary care physician also makes referrals for any other necessary services or specialist visits. These referrals allow you to see another doctor within thehealth plan’s network.If you do not have a referral from your primary care physician, your HMO is unlikely to cover the service.
Some modern HMOs have relaxed these rules and allow members to visit specialists within the plan’s network without having a referral from their primary care physician. It’s important to check the specific requirements of your plan.
Regardless of whether a referral is required, HMOs generally require members to get all of their care from providers who are in the plan’s network. Out-of-network care is covered only in emergency situations, or situations in which a person receives care from an out-of-network provider at an in-network facility (ie, scenarios in which theNo Surprises Act consumer protectionsapply).
Point-of-service plans also require referrals from a PCP in order to see a specialist. But unlike an HMO, a POS plan will generally cover some of the cost of out-of-network care, as long as you have a referral from your PCP. (With an HMO, the referral still has to be for a specialist who participates in the plan’s network. This is the case unless there isn’t one available and the health plan makes an exception to ensure access to necessary care.)
HMOs Common in Individual MarketHMOs and EPOs have become more common in the individual health insurance market as insurers work to control costs.The health insurance exchanges/Marketplaces in some states do not have any PPO options available.
HMOs Common in Individual Market
HMOs and EPOs have become more common in the individual health insurance market as insurers work to control costs.The health insurance exchanges/Marketplaces in some states do not have any PPO options available.
Referrals are generally not necessary for a preferred provider organization (PPO) or an exclusive provider organization (EPO).
A PPO is a health plan that has contracts with a wide network of “preferred” providers. You can choose to receive your care or service out of the network as well (but your costs will be higher, and you could also receive abalance billfrom the medical provider, in addition to your stated out-of-network cost-sharing).
An EPO also has a network of providers, but it generally will not cover any out-of-network care unless it’s an emergency or an out-of-network provider working at an in-network facility.
Unlike a health maintenance organization, in a PPO or EPO, you generally do not need to select a primary care physician and you do not need referrals to see other providers in the network. Because of this flexibility, PPO plans tend to be more expensive than HMO plans with otherwise comparable benefits. (Note that it’s still a good idea to have a PCP who can help you coordinate your care; just because your health plan doesn’trequirea PCP or referrals doesn’t mean you can’t have them.)
Although PPOs are still the most common type of employer-sponsored plan, they aren’t as common in the individual market as they once were because insurers have found them more expensive to offer.
EPO Insurance—What It Is and How It Works
Depending on the service you need,prior authorizationfrom your insurance plan may be necessary in addition to the referral from your PCP. Your PCP might automatically obtain prior authorization as part of the referral process.
If your health plan denies a prior authorization, you can appeal that decision. Your doctor can help with this, and so can your insurance broker or HR representative, depending on how you obtained your coverage. You can also reach out to theConsumer Assistance Program(CAP) if they have an office in your state.Your state’s insurance departmentmay also be able to help, depending on the type of health plan you have.
Insurance payment for medical services will vary depending on whether the medical provider is in-network or out-of-network with the patient’s health plan.
In-Network
When you receive medical care from an in-network provider, regardless of whether you have an HMO, EPO, PPO, or POS plan, you’ll be responsible forcost-sharing (copay, deductible, and/or coinsurance)unless you’ve already met your plan’sout-of-pocket maximumfor the year or are receiving acost-free preventive service.
(The different types of cost-sharing apply to different services; the service you receive might just have a copay, or you might be responsible for the deductible and coinsurance.)
Employer-sponsored HMO, POS, and EPO plans tend to have lower deductibles and co-payments compared to PPO plans.However, this is generally not the case for plans purchased in the individual market. Those self-purchased plans (obtained throughthe exchangeordirectly from an insurer) often have similar cost-sharing, regardless of the type of plan management.
Employer-sponsored PPOs tend to have higher cost-sharing than other types of employer-sponsored coverage. But if you’re buying your own health plan, you might find only HMOs and EPOs available in your area.And they might have cost-sharing that’s quite high. (If you’re eligible for cost-sharing reductions and you’re buying your own plan, pay particular attention tosilver-level plans, as cost-sharing reductions are only available on silver plans.)
Out-of-Network
With an HMO or EPO, you’re typically not covered for any out-of-network services unless it’s an emergency or you’re at an in-network facility and have no choice but to receive care from an out-of-network provider who is working there.
With a PPO or POS, there is typically coverage for out-of-network care, but the provider is free tobalance billyou for the portion your insurer doesn’t cover since the provider hasn’t signed a contract with your insurer. (With a POS, you’ll need a referral from your PCP to get insurance coverage for the out-of-network treatment.)
Although ACA-compliant (meaning non-grandfathered, non-grandmothered) PPOs and POS plans do have to comply with thefederal limits on out-of-pocket costsfor in-network care, they are free to set whatever out-of-pocket limit they want for out-of-network care. Some plans have no limit on the out-of-pocket costs you’ll incur if you go outside the network.
Patients are no longer supposed to receive balance bills for emergency care (other than ground ambulance services), or from out-of-network medical providers who treat them at an in-network hospital. This is due to thefederal No Surprises Act, which plays an important role in protecting consumers from out-of-network bills in situations where they had no choice over whether the provider treating them was in-network or out-of-network.
Balance Billing BasicBalance billing occurs when an out-of-network provider charges you for the difference between the provider’s charge and the allowed amount (in-network providers generally cannot balance bill, as they are required to write off the portion of their bill that’s over the amount allowed under their contract with the health plan). For example, if an out-of-network provider charges you $200 and the allowed amount is $100, the provider may bill you for the balance, or $100.But as of 2022,“surprise” balance billing is no longer allowed. This means that patients will no longer receive balance bills from out-of-network providers in emergencies, or from out-of-network providers who treat them at an in-network hospital (with limited exceptions in which the patient waives their No Surprises Act protections).
Balance Billing Basic
Balance billing occurs when an out-of-network provider charges you for the difference between the provider’s charge and the allowed amount (in-network providers generally cannot balance bill, as they are required to write off the portion of their bill that’s over the amount allowed under their contract with the health plan). For example, if an out-of-network provider charges you $200 and the allowed amount is $100, the provider may bill you for the balance, or $100.But as of 2022,“surprise” balance billing is no longer allowed. This means that patients will no longer receive balance bills from out-of-network providers in emergencies, or from out-of-network providers who treat them at an in-network hospital (with limited exceptions in which the patient waives their No Surprises Act protections).
Balance billing occurs when an out-of-network provider charges you for the difference between the provider’s charge and the allowed amount (in-network providers generally cannot balance bill, as they are required to write off the portion of their bill that’s over the amount allowed under their contract with the health plan). For example, if an out-of-network provider charges you $200 and the allowed amount is $100, the provider may bill you for the balance, or $100.
But as of 2022,“surprise” balance billing is no longer allowed. This means that patients will no longer receive balance bills from out-of-network providers in emergencies, or from out-of-network providers who treat them at an in-network hospital (with limited exceptions in which the patient waives their No Surprises Act protections).
Summary
Most health maintenance organizations (HMOs) require people to select a primary care physician (PCP) who manages the patient’s health care details. The primary care physician also provides referrals for any other necessary services or specialist visits. These referrals allow you to see another doctor or a specialist within the health plan network. If you do not have a referral from your primary care physician, your HMO likely will not cover the service.
Some modern HMOs have relaxed these rules and allow members to visit specialists within the plan’s network without having a referral from their primary care physician. Regardless of whether a referral is required, HMOs generally require members to get all of their care from providers in the plan’s network, with out-of-network care covered only in an emergency.
Meanwhile, point-of-service (POS) plans also require referrals from a PCP to see a specialist. But unlike an HMO, a POS will generally cover some of the cost of out-of-network care (after you meet the plan’s out-of-network deductible), as long as you have a referral from your PCP.
Referrals are not necessary for a preferred provider organization (PPO) or an exclusive provider organization (EPO). But it’s still a good idea to have a primary care physician and to keep them in the loop regarding your medical treatment. They can help you coordinate your care and ensure that you’re receiving the treatment you need.
11 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.U.S. News & World Report.Open enrollment: Deciding between a PPO, HMO, EPO or POS plan.Barnett ML, Song Z, Bitton A, Rose S, Landon BE.Gatekeeping and patterns of outpatient care post healthcare reform.Am J Manag Care. 2018;24(10):e312–e318.Patient Advocate Foundation.The ins and outs of seeking out-of-network care.Carlton, Stephanie, et al. McKinsey & Company.Insights into the 2022 individual health insurance market. August 3, 2022.KFF.Employer Health Benefits, 2023 Annual Survey.Kaiser Health News.As HMOs dominate, alternatives become more expensive.Justworks.What’s the difference between HMO, PPO, POS, and EPO insurance?Cigna.What’s the difference between an HMO, EPO, and PPO?Cigna Healthcare.Preferred Provider Organization (PPO) vs. Point of Service (POS) plans: what’s the difference?Kaiser Family Foundation.2020 Employer Health Benefits Survey.HealthCare.gov.Balance billing.
11 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.U.S. News & World Report.Open enrollment: Deciding between a PPO, HMO, EPO or POS plan.Barnett ML, Song Z, Bitton A, Rose S, Landon BE.Gatekeeping and patterns of outpatient care post healthcare reform.Am J Manag Care. 2018;24(10):e312–e318.Patient Advocate Foundation.The ins and outs of seeking out-of-network care.Carlton, Stephanie, et al. McKinsey & Company.Insights into the 2022 individual health insurance market. August 3, 2022.KFF.Employer Health Benefits, 2023 Annual Survey.Kaiser Health News.As HMOs dominate, alternatives become more expensive.Justworks.What’s the difference between HMO, PPO, POS, and EPO insurance?Cigna.What’s the difference between an HMO, EPO, and PPO?Cigna Healthcare.Preferred Provider Organization (PPO) vs. Point of Service (POS) plans: what’s the difference?Kaiser Family Foundation.2020 Employer Health Benefits Survey.HealthCare.gov.Balance billing.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
U.S. News & World Report.Open enrollment: Deciding between a PPO, HMO, EPO or POS plan.Barnett ML, Song Z, Bitton A, Rose S, Landon BE.Gatekeeping and patterns of outpatient care post healthcare reform.Am J Manag Care. 2018;24(10):e312–e318.Patient Advocate Foundation.The ins and outs of seeking out-of-network care.Carlton, Stephanie, et al. McKinsey & Company.Insights into the 2022 individual health insurance market. August 3, 2022.KFF.Employer Health Benefits, 2023 Annual Survey.Kaiser Health News.As HMOs dominate, alternatives become more expensive.Justworks.What’s the difference between HMO, PPO, POS, and EPO insurance?Cigna.What’s the difference between an HMO, EPO, and PPO?Cigna Healthcare.Preferred Provider Organization (PPO) vs. Point of Service (POS) plans: what’s the difference?Kaiser Family Foundation.2020 Employer Health Benefits Survey.HealthCare.gov.Balance billing.
U.S. News & World Report.Open enrollment: Deciding between a PPO, HMO, EPO or POS plan.
Barnett ML, Song Z, Bitton A, Rose S, Landon BE.Gatekeeping and patterns of outpatient care post healthcare reform.Am J Manag Care. 2018;24(10):e312–e318.
Patient Advocate Foundation.The ins and outs of seeking out-of-network care.
Carlton, Stephanie, et al. McKinsey & Company.Insights into the 2022 individual health insurance market. August 3, 2022.
KFF.Employer Health Benefits, 2023 Annual Survey.
Kaiser Health News.As HMOs dominate, alternatives become more expensive.
Justworks.What’s the difference between HMO, PPO, POS, and EPO insurance?
Cigna.What’s the difference between an HMO, EPO, and PPO?
Cigna Healthcare.Preferred Provider Organization (PPO) vs. Point of Service (POS) plans: what’s the difference?
Kaiser Family Foundation.2020 Employer Health Benefits Survey.
HealthCare.gov.Balance billing.
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