Medical Credentialing HMO vs PPO

As a "Medical Provider" it's important to know the basics about (and difference between) HMO and PPO insurance plans. 

This articles will teach you a few lesser-known basics--and a few things many people don't yet realize about HMO and PPO plans.

1) Let's start with the Basics that Many People Still Don't Know:
HMO stands for Health Maintenance Organization.
PPO stands fro Preferred Provider Organization.
While in the past PPO plans paid more money to providers, Today, HMO and PPO plans often pay at the same reimbursement level.

2) Many Insurance Companies offer Various Insurance Plans, under both HMO and PPO Plan Statuses. 

For instance, Blue Cross Blue Shield (BCBS) in any given state will have various HMO and PPO plans available to patients. Some plans with have deductibles (that's a specified amount of money--say 1,000 or 2,000 dollars that the patient needs to pay--each calendar year--before insurance benefits will start paying for care). Co-pays will vary: Some plans will have a $25 dollar co-pay, other will have only a $5 co-pay.

3) HMO Plans are More Likely to have a Deductible. 

With a deductible, insurance will not pay the provider until the deductible is met (it's the patient's responsibility). Scenario: a patient comes in for a counseling session, and pays you his $20 copay. You submit the claim to the insurance company for the remainder of the visit cost (you ask for your fee remainder of $150.00). However, your claim is rejected on the grounds that the patient has not yet met his or her deductible! You now need to go back to the patient, and bill him directly. 

This confusion can be avoided! Often, deductibles can be checked online--always check for a deductible before a patient's first appointment!

4) PPO plans Don't Guarantee Out-of-Network Benefits. 

In the past, PPO plans all had "Out of Network" benefits, meaning that the patient could see any doctor he or she wanted to see, and insurance would cover the costs. If a patient decided to go to an expensive doctor who charged $510.00 an hour--the insurance would pay up. However, PPO plans have become much much more restrictive.

(a) Today, PPO plans will only pay doctors what insurance companies pay their paneled providers (or less!), 
(b) PPO plans almost always cost the patient more money when they opt to use their out of network benefits, so patients with PPO plans still search for providers paneled with their insurance company, and
(c) Some PPO plans even have a deductible for out of network benefits. 

5) HMO-level Benefits are the Norm. 

HMO plans, due to their lower cost, are greatly becoming the usual choice for companies and end users (patients). Also, as insurance companies are often cutting PPO plans down to HMO plan benefit levels, as a way to mitigate the rising cost of healthcare. 

6) HMO-Panels Fill Faster than PPO Panels. 

HMO panels, the one's used by the majority of patients, fill faters than PPO patients. For example, In Boston, Massachusetts, BCBS's HMO panels are completely closed! New providers can still take BCBS insurance, but nobody with an HMO plan--this is a huge limitation as is seems that 9 out of 10 BCBS patients has an HMO plan. We are proud to say, that staff at www.MentalHealthCredentialing.com has been successful in helping providers break into the exclusive BCBS HMO panel--a boon for their counseling practices!


Have questions about credentialing, accepting insurance, or insurance plans? Call us at 1-855-484-7483.
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