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Finance issue brief: point of service
Issue Brief (Health Policy Tracking Service)
|November 10, 2000
Summary
Mandatory point-of-service (POS) options in managed care plans allow patients to see out-of-network providers for higher costs. This policy change effectively ends the use of closed-panel health maintenance organizations (HMOs).
Area of Science:
- Healthcare Policy
- Managed Care Organizations
- Health Insurance
Background:
- Managed care organizations (MCOs), such as health maintenance organizations (HMOs), offer various plan structures.
- A point-of-service (POS) option is a feature within some MCO plans.
- POS options permit enrollees to seek care from providers outside the plan's network, albeit with increased out-of-pocket expenses.
Observation:
- This brief examines legislative proposals mandating the inclusion of POS options in managed care plans.
- Mandating POS options fundamentally alters the operational model of traditional closed-panel HMOs.
- The core impact is the removal of restrictions on provider choice.
Findings:
- Legislation requiring POS options compels MCOs to allow out-of-network care.
- This mandate effectively negates the 'closed-panel' characteristic of HMOs.
- Enrollees gain flexibility but face potentially higher healthcare costs.
Implications:
- Mandatory POS options could lead to increased healthcare utilization and costs.
- The elimination of closed-panel HMOs may affect provider networks and contract negotiations.
- Policy shifts towards POS options signify a move towards greater patient choice in health insurance plans.