POINT-OF-SERVICE PLANS

A newer and fast-growing type of managed care arrangement is the POS plan. A POS plan is a hybrid arrangement that combines aspects of a traditional HMO and a PPO. With a POS plan, participants in the plan elect, at the time medical treatment is needed, whether to receive treatment within the plan's tightly managed network, usually an HMO, or outside the network. Expenses received outside the network are reimbursed in the same manner as described earlier for nonnetwork services under PPO plans.

There are two basic types of POS plans: the open-ended HMO and the gatekeeper PPO. An open-ended HMO is by far the most common form and is the HMO industry's response to the demand for more consumer flexibility in the choice of providers, even though it increases costs somewhat. It essentially consists of traditional HMO coverage with an endorsement for nonnetwork coverage. It can take the basic form of any of the HMOs previously described. However, at any time a subscriber can elect to go outside the HMO network of medical care providers.

It can be argued that any PPO is actually a POS plan. However, the normal usage of the term POS implies a higher degree of managed care than is found in most PPOs. A gatekeeper PPO requires that the PPO participant elect a primary care physician in the manner of an HMO participant. This physician acts as a gatekeeper to control utilization and refer members to specialists within the PPO network. However, any time that care is needed a covered person can elect to go outside the network. This type of PPO has generally been formed by a traditional PPO or insurance company that does not own an HMO.

Under some POS plans, a covered person can go outside the plan's network without informing the plan of this fact. In other POS plans, the person must notify the gatekeeper that such treatment will be sought. Even though the gatekeeper has no power to prevent the nonnetwork treatment, the gatekeeper may be able to convince the person that proper treatment is available within the network. Furthermore, the gatekeeper can better manage future medical care by being aware of all medical treatment that a person is receiving.