The Point-Of-Service (POS) plan is merely a combination of HMO and PPO plans.
General Characteristics
A PPO is a group of physicians and hospitals that contract with employers, insurers, or third party organizations to provide medical care services at a reduced fee. The PPOs differ from the HMOs in two ways. First, they do not provide care on a prepaid basis, but physicians are paid a fee for service. Secondly, subscribers are not required to use physicians or facilities that have contracts with the PPO.
In a POS plan, the doctors are usually paid on a capitation basis: they get a set fee per person regardless of the amount of service performed. Both PPO and POS plans offer a greater selection of providers compared to HMOs.
With the Point-Of-Service plan the employees do not have to be locked into one plan or make a choice between the two plans. A different choice can be made every time a need arises for medical services.
In-network and Out-of-network Provider Access
When a medical caregiver contracts with a health organization to provide services to its members or subscribers, but retains the right to treat patients who are not members or subscribers, it is referred to as open panel. In an open panel arrangement, the doctors are not considered to be employees of the health organization.
When the medical caregiver provides services to only members or subscribers of a health organization, and contractually is not allowed to treat other patients, it is referred to as closed panel. In a closed panel arrangement, the doctors are considered employees of the health organization.
PPO plans, like HMOs, enter into contractual arrangements with health care providers who form a provider network. However, plan members do not have to use only in-network providers for their care.
Similarly, in a POS plan the individuals can visit an in-network provider at their discretion. If they decide to use an out-of-network physician, they may do so. However, the member copays, coinsurance and deductibles may be substantially higher.
In POS plans, participants usually have access to a provider network that is controlled by a primary care physician ("gatekeeping"). Plan members, however, have an option to seek care outside the network, but at reduced coverage levels. POS plans are also referred to as "open-ended HMOs."
Any physician or hospital that qualifies and agrees to follow the PPO’s standards and charge the appropriate fees that the PPO has established can be added to the PPO’s approved list at any time. Physicians and providers may belong to several PPO groups simultaneously.
Primary Care Physician Referral
In a PPO, the insured does not have to select a primary care physician. The insured may choose medical providers not found on the preferred list and still retain coverage. The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs. Conversely, if a non-network provider is used, the insured's out-of-pocket costs will be higher. In a PPO, all network providers are considered "preferred," and you can visit any of them, even specialists, without first seeing a primary care physician. Certain services may require plan pre-certification, an evaluation of the medical necessity of inpatient admissions and the number of days required to treat your condition.
The Point-Of-Service (POS) plan combines "gatekeeping" arrangements with the ability to self-refer at increased out-of-pocket costs. A patient can obtain a higher level of benefits at a lower cost when care is provided by or arranged through the primary care physician (PCP). Benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally more expensive.
Catastrophic Coverage
Catastrophic health plans emphasize coverage for hospitalization or serious illness only. These feature a higher deductible and a lower monthly premium payment.
Indemnity Plan Features
If a non-member physician is utilized under the Point-Of-Service plan, then the attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount or percentage for the privilege.
Fixed indemnity refers to health insurance policies that allow insureds to choose the doctor they would like to receive care from and the hospital that they would like to receive care in. In addition, fixed indemnity plans allow insureds to decide what kind of health care services they wish to have (within the limits of the policy provisions).
Most indemnity policies are offered as deductible health care plans. The insured may choose they deductible amount (the higher the deductible, the lower the premium rate). Most plans have copayment requirements that are determined by percentages applied after the deductible amount has been reached.
Hospital indemnity, long-term care, cancer policies and long-term disability coverage that are written as separate policies are also classified as fixed indemnity policies.
Stop-loss or excess health insurance policies are not classified as fixed indemnity policies.