Exclusive Provider Organization (EPO) - Health Insurance Definition

An Exclusive Provider Organization - often called an EPO - has some similarities to a PPO, but there are also some major drawbacks to the EPO. As a rule, the EPO is a network of health care professionals who have signed agreements saying that they will provide specific services at huge discounts. The idea is to make medical costs more affordable rather than having the health care professionals make big bucks from the insurance companies. Things to consider before you select an EPO: There could be a maximum lifetime cap. For example, you may be limited to $100,000 in benefits. If you reach that point, your insurance will no longer pay - ever. The amount will vary but a young person who faces a catastrophic illness that stretches over many years may very reach that cap amount. That person may then have difficulty finding another insurance provider because the illness is then considered a pre-existing illness. Your insurance will probably pay nothing if you go outside the list of approved health care providers, and that could very well include specialists. Compare the costs for some specific services with the EPO, with no insurance, and with another insurance plan. For example, compare the cost of a normal office visit to your local doctor, the cost with the EPO and the cost if you had some other insurance plan. This will help you decide if an EPO is right for you and your family.

Health Insurance Definition: A policy that will pay specified sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage. Two questions small-business owners face when considering health insurance are "What kind of benefits should I buy?" and "How much should I pay?" Regarding the first, buy the benefits that will protect you, your employees and your families in case of emergency. Regarding the second, it depends on your age (and your employees' ages), gender, and whether families will be considered. Choosing the most suitable and cost-effective selection of medical benefits can be time consuming. A workforce that's married with children will have considerably different needs, such as maternity and dental coverage, than groups of single workers. People who work outdoors or workers who spend their days at a computer may prefer an optical program for eye care, safety glasses and sunglasses.Take a look at your workforce to determine: How many workers fall into each age group How many heads of households there are Where your workers live How big their families are Any other pertinent information that could affect your decision, such as the type of work they do Your medical insurance costs may be determined solely on the basis of your company's experience, such as the aggregate number and dollar value of claims submitted by your employees. In other cases, you'll be a part of a larger statistical group that the insurance company or health-care provider uses in calculating your premiums. Be sure to explore the wide range of options available in health-care coverage today, including these: Fee-for-service coverage provides eligible employees with the services of a doctor or hospital with partial or total reimbursement depending on the insurance company. Most insurance companies offer 80/20 plans; the insurance company pays 80 percent of the bill, and the employee pays 20 percent. The employee can go to any doctor he or she chooses, and the plan covers any service that is defined as medically necessary and specified in the plan. Health maintenance organizations (HMOs) provide a range of benefits to employees at a fixed price with a minimal contribution (or sometimes no contribution) from the employee, as long as employees use doctors or hospitals specified in the plan. Usually, HMOs are set up so patients go to the managed-care-plan facilities. If a patient goes to a doctor or hospital outside the plan--except in case of an emergency or if the individual was traveling outside the plan's service area--no benefits are paid at all. Make sure the HMO has facilities near where your employees live and get feedback on the HMO's reputation in the community before you sign up. Preferred provider organizations (PPOs) are considered managed fee-for-service plans because some restrictions are put in place to control the frequency and cost of health care. Under a PPO, arrangements are made among the providers, hospitals, and doctors to offer service at an alternative price--usually a lower price. Many times there's a co-pay amount, which means that employees pay $5 or $10 for each visit to doctors specified in the plan, and the insurance company pays the rest. PPOs differ from an HMO in that if an employee goes to a doctor not specified by the insurance company, the plan still partially covers it. There's usually a higher copay amount or a deductible with varying percentages. A "flexible-benefit" plan allows employees to choose from different fringe benefits. If your workforce is largely white-collar, for example, they may appreciate a health program that encompasses an executive fitness program. Other health programs include vision care plans and rehabilitation for alcohol and substance abuse. Aside from being concerned about the cost of your health-insurance plan, you should also look into the creditworthiness of the insurance provider. Make sure it's rated A or better by A.M. Best, an insurance industry rating service whose rankings are available online and at your library. When choosing between two providers, go with the higher rated, established company, even if its cost is a little higher. That way, you can protect yourself from "insurer flight," which when an insurance carrier packs up its bags and leaves rather than meeting new mandates in your state. If you've narrowed your choices down to two HMOs, ask each to name a private firm you can speak to that's already using their services. Given equal price and medical services, maybe one HMO has a simpler billing method or a superior consumer service division than the other does. Growing enterprises need to know that government legislation requires businesses to offer continued coverage in health insurance benefits even after an employee has left. The Consolidated Omnibus Budget Reconciliation Act (COBRA) calls for this privilege to be extended to any worker in a firm with 20 or more full-time employees. Signed into law in 1986, COBRA demands compliance in both union and nonunion plans. Only two groups are exempt from complying with COBRA: churches or church-operated, tax-exempt organizations and federal or District of Columbia employers. You, the employer, need only offer continued coverage--you don't have to pay for their coverage. Any ex-employee who elects to continue coverage must pay the full cost of that coverage. This includes both the employer and employee's share. Employees may elect to remain covered under the firm's plan for up to 19 months, and dependents can maintain coverage for up to 36 months. COBRA has imposed additional administrative burdens and potentially higher plan costs on virtually all group insurance plans. Managing and monitoring COBRA compliance procedures is necessary to avoid costly financial penalties involved with noncompliance. One penalty is loss of the corporation's tax deduction for its group insurance plan. The plan administrator, in a small firm, is subject to a personal fine for failing to notify an employee of his or her COBRA rights at each step of the termination or hiring process. COBRA provisions include advising all new and terminated employees, and all spouses, of their COBRA continuation rights in writing. Be sure that those electing continued coverage are removed from the plan as soon as they become covered under a new plan.

Complementary Therapies

Complementary cancer therapies are another coverage consideration. A cancer patient undergoing this type of therapy should check with his or her insurance policy regarding coverage.

Cancer Screening Coverage

Cancer screening coverage is an important consideration. Forty-four states mandate insurance coverage of screenings for at least one of these cancers: breast, cervical, prostate, and colorectal. Breast cancer screening coverage is most commonly mandated. Most mandates refer to screenings that follow the American Cancer Society guidelines. A Women's Health Initiative Observational Study investigated the use of cancer screenings by more than 55,000 women between September 1994 and February 1997. The study found that the type of insurance a woman had was linked with the number of cancer screenings she reported. Women age 65 years and older who had Medicare plus prepaid insurance were more likely to report that they had screenings than those who had Medicare alone.

Health Care Regulations

The Health Insurance Portability and Accountability Act (HIPAA), passed by the U.S. Congress in 1996, offers people rights and protections regarding their health care plans. Because of HIPAA, there are limits on preexisting condition exclusions, people cannot be discriminated because of health factors, there are special enrollment requirements for people who lose other group plans or have new dependents, small employers are guaranteed group health plan availability, and all group plans have guaranteed renewal if the employer wishes to renew. In summary these rights and protections include:

• Portability. This is the ability for a person to get new health insurance if a change is desired or needed.
• Availability. This refers to whether or not health insurance must be offered to a person and his or her dependents.
• Renewability. This refers to whether or not a person is able to renew his or her health plan.

Preexisting Condition

A preexisting condition, such as cancer, is a concern when choosing insurance. If a person received medical advice or treatment for a medical problem within six months of enrolling in new insurance, this condition is called preexisting, and it can be excluded from the new coverage. The six-month time lapse before a person enrolls in a new health insurance policy is called the look-back period. If a person received medical advice, recommendations, prescription drugs, diagnosis, or treatment for a health problem during the look-back period, he or she is considered to have a preexisting condition. People should check with their state insurance boards to determine preexisting condition rules.

Coverage Renewal

Some people with diseases such as cancer worry about group health plans renewing their coverage. As long as the person meets the plan's eligibility requirements and the plan covers similar cases, the coverage must be offered. Coverage cannot be cancelled for health reasons.

Experimental/Investigational Treatments

Experimental/investigational treatments are often a concern for people with cancer. These treatments may or may not be covered by a person's health insurance. Some states mandate coverage for investigational treatments. People should check with their insurance plans and state insurance boards to determine if coverage is available.

A clinical trial is a type of investigational treatment. Costs involved include patient care costs and research costs. Usual patient care costs that may be covered by insurance are visits to the doctor, stays in the hospital, tests, and other procedures that occur whether a person is part of an experiment or is receiving traditional care. Extra patient care costs that may or may not be covered by insurance are the special tests required as part of the research study.

Health insurance plans have policies regarding coverage for clinical trials. People should determine their level of health insurance coverage for clinical trials, and they should learn about the costs associated with a particular study.

In 2000, Medicare began covering certain clinical trials. The trials must meet specific criteria in order to be covered. In eligible trials treatments and services such as tests, procedures, and doctor visits that are normally covered by Medicare are covered. Some items may not be covered including investigational items like the experimental drug itself or items that are used only for data collection in the clinical trial. Patients should check to see if the clinical trial sponsor is providing the investigational drug at no charge.

Medicaid

Medicaid, created in 1965 under Title 19 of the Social Security Act, is designed for people receiving federal government aid such as Aid to Families with Dependent Children. This program covers hospitalization, doctors' visits, lab tests, and x rays. Some other services may be partially covered.

Tricare

Eligible military families may enroll in TRICARE Prime, which is an HMO; TRICARE Extra, which offers an expanded choice of providers; or TRICARE Standard, which is the new name for CHAMPUS.

Supplemental Insurance

Supplemental insurance covers expenses that are not paid for by a person's health insurance. Cancer insurance is a specific form of supplemental insurance that covers expenses that are not normally covered by health insurance but are specifically related to cancer treatments.

Workers' Compensation

Workers' compensation covers health care costs for an injury or illness related to a person's job. Medical conditions that are unrelated to work are not covered under this plan. In some cases an evaluation is done to determine whether or not the medical condition is truly related to a person's employment.

Special Concerns

There are a variety of special concerns that people with cancer have regarding health insurance.

Waiting Period

Insurance may not take effect immediately upon signing up for a policy. Sometimes a waiting period exists, during which time premiums are not paid and benefits are not available. Health care services received during this period are not covered.

Preferred Provider Organization (PPO)

A PPO combines the benefits of fee-for-service with the features of an HMO. If patients use health care providers (doctors, hospitals, etc.) who are part of the PPO network, they will receive coverage for most of their bills after a deductible and, perhaps a copayment, is met. Some PPOs require people to choose a primary care physician who will coordinate care and arrange referrals to specialists when needed. Other PPOs allow patients to choose specialists on their own. A PPO may offer lower levels of coverage for care given by doctors and other professionals not affiliated with the PPO. In these cases the patient may have to fill out claim forms to receive coverage.

Government Health Plans

Medicare and Medicaid are two health plans offered by the U.S. government. They are available to individuals who meet certain age, income, or disability criteria. TRICARE Standard, formerly called CHAMPUS, is the health plan for U.S. military personnel.

Medicare

Medicare, created in 1965 under Title 18 of the Social Security Act, is available to people who meet certain age and disability criteria. Eligible people include:

• those who are age 65 years and older
• some younger individuals who have disabilities
• those who have end-stage renal disease (permanent kidney failure)

Medicare has two parts: Part A and Part B. Part A is hospital insurance and helps cover the costs of inpatient hospital stays, skilled nursing centers, home health services, and hospice care. Part B helps cover medical services such as doctors' bills, ambulances, outpatient therapy, and a host of other services, supplies, and equipment that Part A does not cover.

Health Maintenance Organization (HMO)

An HMO is a type of managed care called a prepaid plan. This type of coverage was designed initially to help keep people healthy by covering the cost of preventive care, such as medical checkups. The patient selects a primary care doctor, such as a family physician, from an HMO list. This doctor coordinates the patient's care and determines if referrals to specialist doctors are needed. People pay a premium, usually every month, and receive their health care services (doctor visits, hospital care, lab work, emergency services, etc.) when they pay a small fee called a copayment. The HMO has arrangements with caregivers and hospitals and the copayment only applies to those caregivers and facilities affiliated with the HMO. This type of coverage offers less freedom than fee-for-service, but out-of-pocket health care costs are generally lower and more predictable. A person's out-of-pocket costs will be much higher if he or she receives care outside of the HMO unless prior approval from the HMO is received.