Exclusive Provider Organization (EPO)

An Exclusive Provider Organization (EPO) is a type of managed care plan that is offered by insurance companies. Exclusive is the word that best describes how this plan functions. Either use the limited list of participating providers or pay the full cost for treatment.

An Exclusive Provider Organization plan pays ZERO for out of network services

The only exception to the zero out of network policy maybe for:

  • Situations where emergency care is needed. The plan understands that no one will have the wherewithal to consult the plan directory to try to locate an in network provider in an emergency. But be prepared, once the patient stabilizes they will be moved to an in network hospital.
  • When the plan does not have anyone in network that can provide the care that the patient needs. That care better be medically necessary and approved by the plan in advance.

An Exclusive Provider Organization plan is all about keeping healthcare costs as low as possible.

  • Members are required to use only in network providers or pay for all services out of pocket.
  • Pre-approval may be required for all mid to high dollar services and all specialty care.
  • Providers are paid at a contacted rate or some other type of payment methodology as determined by the carrier. 

On the reverse, the features that make an EPO attractive are:

  • Patients normally pay little out of their pocket because the plan requires little in the form of patient costs; low or no copays, deductibles and coinsurance amounts.
  • You do not have to have a primary care doctor to manage all aspects of your healthcare.
  • No referrals are needed. You can see any provider you want in the network without waiting.
  • The plan is cheaper. Lower premium costs means less is taken out of the plan member's paycheck.

I work with all kinds of health insurance plans nationwide and EPO plans are the plans that I work with the least. In spite of the low out of pocket costs, the exclusivity of the plan may be the reason why.

In my opinion, what ranks highest when choosing a health plan is making sure that the health providers you visit often are part of the network. Most people are just not willing to give up that great pediatrician that their kids love or the family doctor that they can count on just to save a few dollars.

Because an EPO is so exclusive, it limits access to a huge list of providers that one would expect to see under a larger managed care plan.

 

ADVANTAGES & DISADVANTAGES OF EPO PLANS

Advantages to Members Participating in EPO Plans

  • Less out of pocket expense due to the higher reimbursement for in network providers.

Disadvantages to Members Participating in EPO Plans

  • Small network of providers to choose from.
  • Charges for out of network providers will not be reimbursed.

Advantages to Providers Participating in EPO Plans

  • Less doctors to compete for patients.

Disadvantages to Providers Participating in EPO Plans

  • Increase in patients, may not justify the lower reimbursement.

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