HMO vs PPO (+ How It Impacts Acupuncture Billing)

Many acupuncture providers have trouble deciding whether or not to join insurance networks, and what’s right for one practice may not be right for another. There are both positive and negative aspects of joining an acupuncture insurance billing network, depending on your geographic location and your practice’s needs, but understanding the pros and cons requires knowing a little more about HMOs and PPOs, in general.

HMO vs PPO

Broadly, there are two major benefit types: HMO and PPO. While both are types of managed care—which is one way for insurers to help regulate costs—let’s break down what each one entails:

What Is HMO?

To start, HMO stands for Health Maintenance Organization; this kind of coverage restricts patients to a particular group of physicians called a network. In an HMO plan, a patient is typically required to select only doctors and providers from their HMO’s established or predetermined network. In most instances, the patient is required to obtain referrals from their primary care provider (PCP) in order to receive acupuncture treatments.

An HMO limits the amount of freedom that a patient has in choosing where they go for care and they typically have to see their primary physician first before going to another provider or specialist. HMOs don’t normally have annual deductibles and only charge one copay at a time for coverage. In 2022, this type of coverage has a monthly premium of about $457, or nearly $5,500 annually. 

What Is PPO?

On the other hand, with PPO plans, a patient has the option to select any providers they like—no referrals needed. They can select providers that are in-network with their insurance, which is preferable since their costs will be lower, or patients can choose to go to doctors that are out-of-network. 

Although patients with PPO-level benefits have more freedom in choosing their providers, they also tend to have higher deductibles and coinsurance costs. In 2022, the average monthly cost of a PPO plan is $522, or roughly $6,300 over the course of the year. While this is almost $1,000 more expensive than HMO coverage, it’s all about what the patient prioritizes: less upfront cost of healthcare coverage or more freedom in choosing where they go for their healthcare?

Benefits of Joining a Network

When determining if your acupuncture practice should join an insurance’s network, consider these perks:

Larger Pool of Patients

Joining a particular network enables you to treat both HMO and PPO patients who are covered within that network. If you choose to stay out of an insurer’s network, then your practice is limited to seeing only PPO patients who choose to use their out-of-network liberties that come at a higher cost. Thus, joining a network means that you’ll have a bigger pool of patients to potentially use your acupuncture services.

More Referral Opportunities

Being in-network also enables you to accept more patients who have HMO benefits only. After joining a network, your name and practice information will be posted to the insurance carrier’s website and database, potentially garnering you a larger clientele and more referrals from patients’ PCPs. As more and more Americans continue to turn to holistic medicine as part of their wellness journey, this is a huge opportunity!

Additional Marketing Supplies

When you join an insurance network, you have the ability to leverage that big company name to your advantage. This means that you can advertise that you accept patients who are on that insurance coverage and it can build your reputation as a great practice since you’ve been vetted by a trusted insurance provider. Joining an insurance network results in immediate marketing collateral and the potential to grow your practice!

Challenges of Joining a Network

Just as there are benefits to joining an insurance network, there are also some challenges including:

Lower Fee Schedules

By signing up and agreeing to an insurer’s contract providers in-network, that typically means you’ll get paid at a lower fee schedule than providers who are not contracted. In-network providers also usually cannot bill patients for the remaining portion of a balance for a service that the insurance does not cover.

For instance, if you sent a claim for $120.00 and the insurance paid only $40.00, you would not be allowed to bill the patient for the outstanding $80.00. If you’re out-of-network, you usually have the flexibility and freedom to bill the patient for the difference to make up for any low insurance payments.

Limited Coding Freedoms

Another negative aspect of being contracted into a network is that you could be limited to billing only acupuncture codes, whereas as an out-of-network provider, you can utilize numerous other modality codes. For example, United Healthcare covers Gua Sha services for non-participating providers, but not for in-network acupuncturists.

Shorter Claim Filing Window

Additionally, being a contracted in-network provider often shortens your claim filing time. Usually, providers have a one-year window to submit their claims; a January 1 claim can be processed so long as it’s received by December 31. If you are contracted, however, your timely filing period can be cut down to 3-6 months. That may sound like a sufficient amount of time, but claims can easily fall through the cracks on your side or that of the insurance company.

It’s Tough Work Getting Contracted

Lastly, getting contracted with an insurer is tedious work. You’ll need to fill out a thick packet of questionnaires about your experience, practice, and degree and then give the insurer three months to review and approve your application. After that, you’ll need to revisit your paperwork often and meet the insurer’s particular standards to maintain your in-network status.

How HMO or PPO Impacts Acupuncture Billing

When determining which strategy is best for your acupuncture practice, only you can really make that decision! Your medical billing will look slightly different for each plan and there are advantages—and disadvantages—to both HMO or PPO coverages.

Regardless of what you choose to do, your acupuncture practice will still have to handle medical billing and coding and the overall claims process. Take that burden off of your staff’s workloads by partnering with Holistic Billing Services to streamline your medical billing process and optimize your revenue cycle! Contact us today to learn how we can be an extension of your practice!