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How Does a PPO Work In Texas?

Aug 17, 2007
Many Texans shopping for individual health insurance do not understand what a Preferred Provider Organization (or PPO) is all about. A PPO negotiates discount arrangements with doctors, hospitals and other providers who accept lower fees from the insurer for their services. As a result, your cost sharing is lower when compared to going outside your network of providers. The bottom line - PPO providers offer health care at a reduced cost.

With most PPO plans, you are responsible for paying an annual deductible and coinsurance, which is a percentage of the charges. PPO plans charge higher deductibles and coinsurance for out-of-network providers than for network providers. In addition, very frequently PPOs calculate what they will pay based on what they would have paid a network provider. Therefore, you can be liable not only for the higher deductible and co-insurance, but also for the difference between what the provider charges and what the insurer "allows" based on the network price. So you can save a great deal when receiving health care through PPO providers.

In Texas, individual insurance companies must provide you with a "PPO Disclosure" which describes your PPO benefits and financial responsibilities in detail. If you are covered under an employer or other group plan, similar information can be found in the Summary of Benefits.

An important benefit of PPOs is the ability to make self-referrals. In essence, plan members can refer themselves to doctors of their choice, including specialists, inside and outside the network. However, as previously mentioned, plan members may incur additional charges for using out-of-network providers. With a PPO, you're being served by community-based physicians and hospitals. You have the choice of using either a PPO provider or a non-PPO provider every time you seek medical services.

When you look for a PPO physician, you'll be provided, at no cost to you, one or more of the following methods of access to the PPO you have selected:
Toll-free telephone number
Internet website directory address
Preferred provider directory.

PPO directories contain a complete list of physicians, their specialties, office locations and telephone numbers. Or you may contact the network directly to find a participating provider.

The PPO tries to keep its directory accurate and up-to-date. However, you should verify PPO participation with your individual healthcare provider before receiving any services. If you choose an out-of-network doctor, just remember - by using PPO providers, you receive care while paying less for it. However, since you are still covered under the out-of-network benefit in the plan, you can use a non-PPO provider at any time.

In order to get the favorable PPO benefits, you need to verify the PPO network participation of every healthcare provider, not just your primary physician. If, for instance, your physician sends blood work to a lab, you need to verify that the lab is a network lab. If you have surgery, which involves an anesthesiologist, the anesthesiologist needs to be a network doctor if you want discounted pricing. Likewise, the radiologist, whom you never meet, but reviews your CAT scan, also needs to be a network doctor.

When selecting a PPO, don't just look to see if your doctor is included in the network, but also consider the range of doctors and other providers available in both your area and beyond. You never know when you will need specialist care or medical care out of town. Some PPOs have a limited number of doctors and providers in your area but will not have doctors and providers outside of your area or state. PPOs will generally cover bona fide medical emergencies outside of your home area as "in network" even if you use a non-network provider, but this does not help if you are out of area and need non-emergency care.

When you visit a PPO provider, you will be asked to present your medical identification card. PPO providers will generally submit your claim to your insurance company on your behalf.
About the Author
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com
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