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HMOs and PPOs How does managed care manage mental health? |
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In the old days, your doctor made all the decisions about your medical care. Now it seems as though your insurance company is in charge. The most common managed care models are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). HMOs typically provide preventative care, have more restrictions on services and cost less. PPOs give the consumer more control of health care decisions but cost more. If you are covered under an HMO, you will choose doctors from their network. Your primary care physician must make referrals to all other doctors or specialists. PPO members are not required to choose a primary care physician. Either doctors or the members themselves can choose to see a specialist, even those outside the network. See chart: Comparison of HMOs and PPOs Managed care plans can set limits on services, cost of copays and deductibles and in some cases, the choice of medications. But, while people criticize their insurance companies for these cost-cutting restrictions, it is actually the employer providing the health plan that sets the rules. Benefit limits are imposed by the benefits package an employer purchases. Can my health plan restrict mental health services? The law applies to companies with more than 50 employees. Copays and limits on visits or hospital stays must be the same as for physical care.
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Health plans may, however, require preapproval for coverage and will approve or deny coverage based on their determination of medical necessity and cost-effectiveness. A health plan might approve only a limited number of hospital days or provide coverage only for a partial-hospitalization program. While managed care makes drugs affordable to members, many plans use a formulary, a list of drugs covered by a member's benefit plan. The list results from the insurer comparing drugs' efficiency, side effects and cost. Formularies can mean that some patients can't get the drug their doctor thinks is best for them. Plans say that because drug prices have risen three times faster than the rate of inflation over the last decade, cost-cutting measures are necessary. How will health care reform change mental health coverage? Read about how the Affordable Care Act changes insurance coverage.
Sources Page updated September 1, 2010 |
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Comparison of HMOs
and PPOs HMOs and PPOs differ in primarily two ways: cost and type of access to services. HMO plans have restrictions on where and how you can receive care. PPO plans have fewer restrictions but can be more expensive. |
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Health Maintenance Organizations Members must choose a primary care physician (PCP) from among the plan's roster. All services: office visits, tests, hospitalizations, etc. are provided by contracted healthcare members. |
Preferred Provider Organizations PPO members are not required to choose a primary care physician. |
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| The PCP must refer patient to all other doctors or specialists, who are usually HMO contracted providers. | Either doctors or the members themselves can choose to see a specialist, even those outside the network. | ||||||||||
| The HMO usually chooses hospitals and specialists. | PPOs provide a list of pre-approved providers, but members may choose almost any doctor they choose, in or out of the network. | ||||||||||
| HMO's typically do not cover the services of doctors outside the network, except in cases of emergency. | Members typically pay for services as they are provided and are reimbursed by the PPO. If a member receives care from an out-of network provider, they will receive a lower rate of reimbursement. | ||||||||||
| HMO's typically do not have deductibles that must be met before coverage begins. HMO members usually pay a copay for services. | Members of PPOs may have to meet a deductible, which may reach hundreds of dollars, before coverage begins. And, copayments are generally higher as are premiums. | ||||||||||
| Advantages: Generally HMO healthcare costs less than a PPO's and members are not responsible for billing procedures. |
Advantages: If you have a medical condition that frequently requires a specialist, because referral is not necessary. You may use alternative medicine services such as acupuncture.
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