Institute:Office of National Coordinator (ONC) Workforce Training Curriculum
Component:Introduction to Health Care and Public Health in the U.S.
Unit:Financing Health Care - Part 1
Lecture:Payors in the U.S. Health Care System
Slide content:Indemnity vs. Managed Care Programs 4.9 Table: (2011, CC BY-NC-SA 3.0). 20
Slide notes:This table summarizes and compares indemnity and managed care programs. Indemnity programs have the most freedom of choice, but they cost the most. HMOs have the least freedom of choice and cost the least. As previously mentioned, all managed care plans limit member choice by designating a network of providers. The providers accept reduced reimbursement from the managed care program in exchange for patients referred through the plan. PPOs offer a broader network than HMOs do. So-called in-network providers are reimbursed more by the insurance plan than out-of-network providers. A patient might pay as much as forty percent more for out-of-network services. Choice of physicians is most limited with an HMO, which also requires the patient to designate a primary care provider, or PCP. Patients must see this provider first, in order to get a referral to a specialist. PPOs and EPOs do not have this requirement. HMOs require precertification, a process for checking the patients eligibility and authorizing a medical procedure or hospitalization before it occurs. If precertification is skipped, the HMO may not pay for the patients care. The exception is in the case of an emergency, but even then, the incident must be certified as necessary after the fact. PPOs do not usually require certification. Another difference between HMOs and PPOs is that HMOs generally pay more for preventive care, which lowers costs for everyone. Note that a POS plan is a hybrid. It has the flexibility of a PPO, with a cost comparable to an HMO. A POS relies heavily on preventive care. Members have a primary care physician who may refer them to providers outside the network if deemed necessary. 20