Private Practice Organizations are plans where there are two parts. The company which develops the benefits, provides administration and pays claims submitted by contracted providers. The basic difference in PPO and HMO’ is that providers share in no risk for the ultimate cost of services. The company contracts with the providers for each category of services at a maximum cost. Whether it be a private practice doctor in an IPA or group practice, or hospital. Contracts among the doctors and plans vary and can often be seen in the ultimate cost of the plan. The plans do have managed care and review process for treatment, and various types of care, including prior authorization for hospitalization.

Benefits may include a deductible before any plan payments, a copayment percentages for outpatient visits not subject to the deductible, and a copayment percentage for outpatient services. The deductible may also apply towards hospitalization followed by copayment percentages. The costs are fixed usually to a dollar amount by the plans stop loss feature. Benefits also have a lifetime maximum. In addition to benefits for provider of PPO’s provide benefits for non network providers. These benefits may include higher deductibles, copayments and stop loss.

Choice of physicians, hospitals and other providers that are contracted with the plan is open at all times. Also if necessary non network providers may also be used. Usually there is a larger selection of available physicians in PPO’s. Claims are normally submitted by the provider directly to the plan and payments are made by the plan to the provider with a statement going to the covered individual. Any charges not covered as deductible and copayment percentages are paid by the individual directly to the provider. While there can be larger outlays of expenses and plan costs by the individual over HMO plans, usually more freedom of choice in providers is a consideration. Deductibles range from $250 per calendar year to $500, $1,000, $5,000 or $10,000.