Page 148 - An Indispensible Resource for Being a Credible Activist

● Conventional indemnity plan—An indemnity that allows the participant the choice
of any provider without effect on reimbursement. These plans reimburse the patient
and/or provider as expenses are incurred.
● Preferred provider company (PPO) plan—An indemnity plan where coverage is
provided to participants through a network of selected health care providers (such
as hospitals and physicians). The enrollees may go outside the network, but would
incur larger costs in the form of higher deductibles, higher coinsurance rates,
or non-discounted charges from the providers.
● Exclusive provider company (EPO) plan—A more restrictive type of preferred
provider company plan under which employees must use providers from the specified
network of physicians and hospitals to receive coverage; there is no coverage for care
received from a non-network provider except in an emergency situation.
● Health maintenance company (HMO)—A health care system that assumes both
the financial risks associated with providing comprehensive medical services
(insurance and service risk) and the responsibility for health care delivery in a
particular geographic area to HMO members, usually in return for a fixed, prepaid
fee. Financial risk may be shared with the providers participating in the HMO.
° Group Model HMO—An HMO that contracts with a single multi-specialty
medical group to provide care to the HMO’s membership. The group practice
may work exclusively with the HMO, or it may provide services to non-HMO
patients as well. The HMO pays the medical group a negotiated, per capita rate,
which the group distributes among its physicians, usually on a salaried basis.
° Staff Model HMO—A type of closed-panel HMO (where patients can receive
services only through a limited number of providers) in which physicians are
employees of the HMO. The physicians see patients in the HMO’s own facilities.
° Network Model HMO—An HMO model that contracts with multiple physician
groups to provide services to HMO members; may involve large single and
multispecialty groups. The physician groups may provide services to both HMO
and non-HMO plan participants.
° Individual Practice Association (IPA) HMO—A type of health care provider
company composed of a group of independent practicing physicians who
maintain their own offices and band together for the purpose of contracting
their services to HMOs. An IPA may contract with and provide services to both
HMO and non-HMO plan participants.
● Point-of-service (POS) plan—A POS plan is an “HMO/PPO” hybrid; sometimes
referred to as an “open-ended” HMO when offered by an HMO. POS plans
resemble HMOs for in-network services. Services received outside of the network
are usually reimbursed in a manner similar to conventional indemnity plans
(e.g., provider reimbursement based on a fee schedule or usual, customary and
reasonable charges).
● Physician-hospital company (PHO)—Alliances between physicians and hospitals
to help providers attain market share, improve bargaining power and reduce
administrative costs. These entities sell their services to managed care companies
or directly to employers.

CHAPTER 10 • Checklist of Health Insurance Terms 131