How Referrals Work With Your Health Insurance

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A referral is a special kind of pre-approval that individual health plan members—primarily those with health maintenance organization (HMO) or point of service (POS) plans—must obtain from their chosen primary care physician (PCP) before seeing a specialist or another doctor within the same network.

Some plans require the referral to be in writing directly from the doctor, while others will accept a phone call from your primary care physician.

In order to make sure that everything is in order regarding seeing a specialist, you should be proactive, and make sure that your insurer has received a referral before you make an appointment with your specialist. Then you will know that your visit to the specialist will be covered under your health care plan.

Referrals Generally Required: HMO and POS Plans

Health maintenance organizations require an individual to select a primary care physician. The primary care physician is then responsible for managing all of that individual’s health care going forward. The primary care physician becomes responsible for making recommendations as far as courses of treatment, specialist visits, medications, and more. The primary care physician also provides referrals for any other necessary services or specialist visits within the network. These referrals allow you to go see another doctor or a specialist within the health plan’s network.

If you do not have a referral from your primary care physician, your HMO likely will not cover the service at all. But some modern HMOs have relaxed these rules and now allow members to visit specialists within the plan's network without having a referral from their primary care physician. So you'll want to check the specific requirements of your plan. Regardless of whether a referral is required, HMOs generally require members to get all of their care from providers who are in the plan's network, with out-of-network care only covered in emergency situations.

HMOs have become much more common in the individual health insurance market over the last few years as insurers work to control costs. The health insurance exchanges in some states no longer have any PPO options available.

Point of service plans also require referrals from a PCP in order to see a specialist. But unlike an HMO, a POS (Point of Service option) will generally cover some of the cost of out-of-network care, as long as you have a referral from your PCP (with an HMO, the referral still has to be for a specialist that participates in the plan's network).

Referrals Not Required: PPOs and EPOs

Referrals are not necessary for a preferred provider organization (PPO) or an exclusive provider organization (EPO). A PPO is a health plan that has contracts with a wide network of "preferred" providers. You are able to choose your care or service out of the network as well. An EPO also has a network of providers, but it generally will not cover any out-of-network care unless it's an emergency.

Unlike a health maintenance organization, in a PPO or EPO you do not need to select a primary care physician and you do not need referrals to see other providers in the network. Because of this flexibility, PPO plans tend to be more expensive than HMO plans with otherwise comparable benefits. In fact, although PPOs are still the most common type of employer-sponsored plan, they aren't as common in the individual market as they once were, because insurers have found them more expensive to offer.

Payment

Insurance payment for services within a designated network varies based on the type of plan.

In-Network

Regardless of whether you have an HMO, EPO, POS, or a PPO, for in-network services you'll be responsible for copayments and the deductible, and coinsurance if your plan uses it. HMO, POS, and EPO plans tend to have lower deductibles and copayments, compared to PPO plans, although this is generally not the case for plans purchased in the individual market (ie, employer-sponsored PPOs will tend to have higher cost-sharing than other types of employer-sponsored coverage, but if you're buying your own health plan, you might find only HMOs and EPOs available in your area, and they might have cost-sharing that's quite high).

Out-of-Network

HMO and EPO: You are typically not covered for any out-of-network services unless it's an emergency.

PPO and POS: There is typically coverage for out-of-network care, but the provider is free to balance bill you for the portion that your insurer doesn't cover ​since the provider hasn't signed a contract with your insurer (and with a POS, you'll need a referral from your PCP in order to have any insurance coverage for the out-of-network treatment). If you choose to go outside of the network for your care, you will usually need to pay the provider initially, and then get reimbursed by the PPO. Most PPO plans have higher annual deductibles and out-of-pocket maximums for out-of-network care, and some PPO plans have no limit on the out-of-pocket costs you'll incur if you go outside the network.

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Article Sources
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