What Is a PPO or EPO?
PPOs, Preferred Provider Organizations, are groups of hospitals and/or physicians who, directly or through a third party, develop contractual arrangements with payers to provide a specified set of health care services under defined financial arrangements. EPOs, Exclusive Provider Organizations, are similar to PPOs in their organization and purpose. Unlike PPOs, however, EPOs limit their beneficiaries to participating providers for their health care services. Nationally, enrollment in EPOs increased 18% from 8.3 million in 1992 to 9.8 million in 1993. In 1993, an estimated 328 PPOs offered an EPO option, and 69% of these required users to actively enroll in the EPO. The main reason PPOs are offering their customers EPOs is the benefit of increased control of health care cost. Common provisions of PPO/EPO health insurance include the following: Consumers have a choice of using in-network contracted providers at lower costs or out-of-network providers for increased copayments, deductibles
