Guide To Health Insurance.org

Preferred Provider Organizations (PPOs) are usually groups of providers that contract with employers, insurers, third-party administrators, or others to provide health care services to covered persons and accept negotiated fees as payment for those services. A PPO has a provider network like an HMO, but differs from a traditional HMO because it provides some coverage for services by providers outside the network. PPO members can see providers outside the network, but must pay more out of their own pocket when they do. Traditionally, PPOs pay providers FFS and providers agree to accept lower FFS payments in return for the PPO sending them more patients.

"Point of Service (POS)" plans are PPOs that have strong gatekeeper and utilization review like an HMO, but offer out-of-network coverage like a PPO. In fact, some HMOs with out-of-network coverage are called POS plans. With a POS plan, a member chooses to seek treatment in-network or out-of-network at the time they need the service. POS plans generally cost more in monthly premiums than traditional HMOs, but they allow flexibility to go directly to a doctor other than the primary care physician and to consult specialists without referrals. POS plans have been increasing in popularity.