What if you already have EPO health insurance? Understanding the ins and outs of how your EPO works will help you use your health plan effectively and avoid expensive mistakes.
What Is an EPO (Exclusive Provider Organization)?
A type of managed care health insurance, EPO stands for the exclusive provider organization. EPO health insurance got this name because you have to get your health care exclusively from healthcare providers the EPO contracts with, or the EPO won’t pay for the care.
As is the case with other health plans that require you to stay within their provider networks, EPOs will pay for out-of-network care in emergency situations.
An exclusive provider organization (EPO) insurance plan is a type of major medical insurance that provides minimum essential coverage for illness, hospitalization, and preventive health care.
As managed care programs, EPOs contract with a network of primary care and other providers to deliver health services to their members.
EPO insurance manages costs by limiting care to doctors, specialists, or hospitals within the plan network. If you use an out-of-network provider, you are responsible for the full cost, except in emergency situations.
While an EPO health plan requires the use of network providers, you don’t need referrals for specialist visits. However, you may be required to get prior authorization with EPO health insurance. This means that the EPO must review and approve the specialty visit first.
We recommend that you contact your insurance company or health care provider to ask about coverage.
Listed below are some of the advantages and disadvantages of EPO plans.
Like their cousins, PPOs and HMOs, EPO health plans have cost-containment rules about how you get your health care. If you don’t follow your EPO’s rules when you get healthcare services, it won’t pay for the care.
An EPO health plan’s rules center around two basic cost-containment techniques:
- For services to be covered, you have to receive medical services from healthcare providers and hospitals with whom the EPO has negotiated discounts, although there’s an exception for emergency care.
- Healthcare services are limited to things that are medically necessary or that make your health care costs lower in the long run, like preventive care.
How Does EPO Health Insurance Work?
What do you need to know about using your EPO health insurance? Make sure to read your health insurance policy very carefully. Staying in-network and getting pre-authorizations when needed could save you a lot of money. Let’s look at the most important concepts to understand.
Listed below are some of the advantages and disadvantages of EPO plans.
- Mid-level premium costs: EPO premiums are generally higher than health maintenance organization (HMO) premiums but lower than preferred provider organization (PPO) plan rates.
- No PCP required: You do not need to select a primary care provider (PCP) to coordinate your health care needs.
- Access to specialty care: No specialist referrals are needed. However, you must use in-network providers and may need to obtain prior authorization for specialty care.
- Network limitations: Except in emergencies, you must receive care within the EPO network. You are responsible for the full cost of all other out-of-network services.
- Other out-of-pocket costs: While EPO premiums may be lower compared to other plan types, your EPO may charge deductibles and coinsurance. HMO and point of service (POS) plans generally do not assess deductibles.
You Must Use In-Network Providers
Every EPO has a list of healthcare providers called a provider network. This network offers every imaginable type of healthcare service, including healthcare providers, specialists, pharmacies, hospitals, labs, X-ray facilities, speech therapists, home oxygen, and more.
In an EPO health plan, you can only get healthcare services from in-network providers. If you get care out-of-network, the EPO won’t pay for it; you’ll be stuck paying the entire bill yourself. Accidentally getting out-of-network care can be a very expensive mistake when you have an EPO.
It’s ultimately your responsibility to know which providers are in-network with your EPO. For example, you can’t assume that just because a lab is down the hall from your EPO healthcare provider’s office, it is in-network with your EPO.
You have to check. Likewise, don’t assume that the imaging facility that did your mammogram last year is still in-network with your EPO this year. Provider networks change. If you make that assumption and you’re wrong, you’ll have to pay the entire mammogram bill yourself.
There are three exceptions to the in-network requirement:
- If the EPO doesn’t have an in-network provider for the specialty service you need, If this happens to you, prearrange the out-of-network specialty care with the EPO. Keep your EPO in the loop.
- If you’re in the middle of a complex course of specialty treatment when you become an EPO member and your specialist isn’t part of the EPO, On a case-by-case basis, your EPO will decide whether or not you may finish the course of treatment with your current healthcare provider.
- For true emergencies only. If you’re having a stroke, heart attack, or another true emergency, you should go to the nearest emergency room, whether or not it’s in-network with your EPO. Under the terms of the Affordable Care Act, health plans are required to cover the cost of emergency care received at the nearest out-of-network facility as though it were in-network care. If you need to be admitted to the hospital from the ER, however, your EPO may ask the out-of-network ER to transfer you to an in-network hospital for admission. And it’s important to understand that even if your health plan covers out-of-network emergency care as if it were in-network, they are still only going to pay the amount that they deem reasonable and customary. But the out-of-network emergency rooms and healthcare providers do not have a contract with your insurer, which means they aren’t required to accept the insurer’s payment as payment in full. They can still send a balance bill, unless state rules forbid it. More than half of U.S. states have rules in place to protect patients from balancing billing in emergency situations, but it’s also important to understand that state health insurance laws do not apply to self-insured health plans, which cover the majority of people who have employer-sponsored health insurance.
You Likely Don’t Have to Have a Primary Care Physician
Your EPO health plan generally won’t require you to have a primary care physician (PCP), although getting a PCP is still a good idea.
But the “rules” for primary care (and referrals, as discussed below) under EPOs, HMOs, PPOs, and POS plans have evolved a bit over time, and tend to be somewhat fluid. Here’s an example of an EPO plan, offered in Colorado by Cigna, that does require members to have a PCP.
So the only real “rule” is that you need to pay close attention to the specific details for your own plan. It’s true that most EPOs don’t require you to have a PCP. But don’t assume that yours doesn’t!
You Likely Don’t Need to Have a Referral to See a Specialist
Most EPOs will not require you to get a referral from a primary care healthcare provider before seeing a specialist. This makes it easier to see a specialist since you’re making the decision yourself, but you need to be very careful that you’re seeing only specialists that are in-network with your EPO.
An advantage of having a PCP is that they are often familiar with the specialists in your community, and most specialists have special interests within their specialty, for example, some general oncologists may have a special interest in breast cancer whereas others may have a special interest in lung cancer.
And just like the “rule” about EPOs not requiring you to have a PCP, referrals can be a grey area too. The Cigna EPO in Colorado that requires PCPs also requires referrals in order to see a specialist.
So again, the most important thing is that you’re familiar with the rules that apply to your specific plan, or to any plan that you’re considering as an alternative. Don’t assume anything based simply on whether the plan is an EPO, PPO, POS, or HMO!
You Will Be Required to Get Pre-Authorization for Expensive Services
Your EPO will likely require you to get permission for some services, especially those that are most costly. If a particular Service requires pre-authorization (prior authorization) and you don’t get it, your EPO can refuse to pay.
The services which require authorization are elective and not emergency services though, so a small time delay will not be life-threatening.
Pre-authorization helps your EPO keep costs down by making sure you really need the services you get. In plans like HMOs that require you to have a primary care physician, your PCP is responsible for making sure you really need the services you get.
Since your EPO likely doesn’t require you to have a PCP, it uses pre-authorization as a mechanism to reach the same goal: the EPO only pays for things that are truly medically necessary.
EPO plans differ as to what types of services must be pre-authorized. Most require pre-authorization for things like MRI and CT scans, expensive prescription drugs, surgeries, hospitalizations, and medical equipment like home oxygen.
Your EPO’s Summary of Benefits and Coverage should tell you more about the pre-authorization requirement, but you should expect that any expensive service will need to be pre-authorized.
Although your healthcare provider may volunteer to get pre-authorization for you, it’s ultimately your responsibility to make sure you get a service pre-authorized before you receive the healthcare.
If you don’t, your EPO has the right to refuse to pay for the care, even if the care was medically necessary and you got it from an in-network provider.
Pre-authorization takes time. Occasionally, you’ll have the authorization before you even leave the healthcare provider’s office.
Usually, it takes a few days. In bad cases, or if there’s a problem with the authorization, it can even take weeks. Check out our tips on how to get a prior authorization request approved.
You Don’t Have to File Claims
You don’t have to hassle with bills and claim forms when you have EPO health insurance since all of your care is provided in-network.
Your in-network healthcare provider bills your EPO health plan directly for the care you receive. You’ll just be responsible for paying your deductible, copayment, and coinsurance.
Cost-Sharing Requirements in an EPO are Generally Lower Than They Would Be in a PPO
Cost-sharing is a practice in which both you and your insurance company pay for a portion of the services. Your portion of the cost-sharing can include deductibles, copayments, and/or coinsurance.
There are no hard-and-fast rules when it comes to cost-sharing in the various types of health plans. Some EPOs have high cost-sharing, while others have low cost-sharing. But in general, EPOs tend to have lower cost-sharing than PPOs.
You can think of that as a trade-off for the fact that the EPO limits you to only using in-network medical providers, whereas PPOs will cover a portion of your costs even if you see out-of-network providers. Because of its generally lower cost-sharing and low premiums, an EPO is often one of the most economical health insurance choices.
EPOs have some traits in common with HMOs and some traits in common with PPOs. As such, you might consider an EPO to be a cross-breed between an HMO and a PPO:
Like an HMO, you have to stay within the plan’s network. But like a PPO, you’re usually not required to get a referral from your premium care healthcare provider in order to see a specialist.
Many people like the ease of being able to schedule an appointment with a specialist without consulting a primary care physician. At the same time, this can sometimes be a challenge in that you are limited to certain specialists within your network.
Having an EPO also requires you to actively get involved in planning expensive services or procedures, and leaves you primarily responsible for completing any prior authorizations required. Overall, the combination of its low premiums and low cost-sharing makes EPOs a good choice for many people.
If you are finding it mind-boggling as you compare different plans, check out our comparison of HMOs, PPOs, EPOs. and POS plans.
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