Hcr230 Week 1 Assignment- Features of Private Payer and Cdhp


Assignment: Features of Private Payer and CDHP


    Preferred provider organizations (PPOs) are the most popular type of private

plan, followed by health maintenance organizations (HMOs), especially the

point-of-service (POS) variety. In addition, Consumer-driven health plans (CDHP) that combine

a high-deductible health plan with a funding option of some type are rapidly

growing in popularity among both employers and employees Furthermore, few employees choose

indemnity plans because they would have to pay more. (Valerius, Bayes, Newby, & Seggern, 2008).

    PPO stands for preferred provider organization and is a managed care organization of medical

doctors, hospitals, and other health care providers who have a binding agreement with an insurer or a

third-party administrator, which usually pay participating providers based on a discount from their

physician fee schedules, called discounted fee-for-service (Valerius et al, 2008). Providers in the PPO

will provide the insured members of the group a substantial discount below their regularly-charged

rates. This arrangement helps ensure that the insurer will be billed at a reduced rate when its insured

utilize the services of the preferred   provider. Additionally, those who have PPOs have more flexibility

to choose a primary care doctor of their own choice, as well as being able to go to a specialist without

first having to get a referral from their primary care physician. PPO members also may be fully or

partially reimbursed if they use a doctor that is not listed in the PPO 'network.


    Health Maintenance Organization (HMO) is licensed by the state, which has lower costs, but the

HMO has the most strict guidelines and a limited choice of providers. Furthermore, members are

assigned to primary care physicians and must use network providers to be covered, except in

emergencies, which   also uses an expanded network that...