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HMO Insurance Versus PPO Insurance - What Is Right For Your Practice?

20 September 2022

Mia Kuhn

Most medical and dental providers accept some form of insurance. The breakdown of costs associated with accepting an HMO insurance plan versus a PPO insurance plan could have a bearing on how many clients your practice serves and the amount of work that your staff will need to conduct when serving patients. Read on for an insurance benefits breakdown.

Insurance Coverage Concerns

If you are opening a new medical or dental practice or if you would like to perform a 'health check' on the current plan that you accept, you will need to consider the cost differentiations that are associated with each plan type. As a dental provider, you can focus solely on accepting insurance that will cover some or all of the costs associated with a patient's dental procedure.

You can also focus on both the perspective associated with your patients and explore costs that you may incur if you decide to offer your employees an insurance coverage option that they can take advantage of.

Health Maintenance Organization

An HMO provides coverage that utilizes a set amount of providers. These providers sign a contract with an HMO insurance provider or are directly employed by an HMO. A consumer who has HMO coverage is restricted by the number of providers who will accept their insurance plan.

A consumer will be required to pay a set co-pay amount. The remaining bill will either be paid partially or fully by the HMO plan. In some cases, an 'out-of-network' medical or dental provider can render services to someone with an HMO plan but will need to receive permission to do so first. A PCP (Personal Care Provider) must grant approval. A medical provider may need to fill out additional paperwork or consult with a PCP, prior to being able to render services.

Preferred Provider Organization

A PPO provides coverage that will allow a client to choose an in-network or out-of-network provider. Costs associated with this type of plan are usually higher than the cost of an HMO plan. This is due to the flexibility that a PPO offers. A dental provider may be able to acquire more customers by choosing a PPO plan, but they may also be responsible for handling more inquiries from potential customers.

Since PPO insurance coverage offers so much flexibility, someone who is insured may make many phone calls to determine which healthcare provider will provide them with the best service. A PPO often comes with a higher premium and lower out-of-pocket costs.

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