In or Out of Network: Picking a PPO Physician

When you belong to a Preferred Provider Organization (PPO), you will usually be asked to choose a physician that belongs “in-network”. What does in-network mean? It means that the insurance company has arranged with a network of physicians, hospitals and other healthcare providers to provide healthcare to its members. Usually this network of providers has agreed to provide services at rates that are much lower than normal, in return for more business from insurance companies. Insurance companies do this to keep their costs low.

Choosing an in-network doctor usually costs less for the consumer. Often PPO’s agree to pay most or all of the cost of a visit to an in-network provider. This results in less out-of-pocket cost for the patient. It also means less paperwork, since the PPO provider usually handles the paperwork for you. And no referrals for care are necessary, as is often the case in other health insurance plans such as Health Maintenance Organizations (HMO’s). You just pick a preferred provider, make an appointment, and go. The disadvantage to this is that a favorite doctor may not be part of the PPO network, or may decide to opt out of the network without much warning to patients.

PPO’s will also pay for out-of-network providers. But because these providers have not agreed to offer their services for less cost, the PPO will require the consumer to pay more out-of-pocket. The obvious disadvantage to using an out-of-network physician is more out-of-pocket expense. But some specialists and high-profile physicians don’t belong to PPO’s, which means going out of network for certain medical conditions is a necessary evil.

View all Articles by: Melissa Clark, CCS-P