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Different Types of North Carolina Health Insurance Plans

Health Maintenance Organizations (HMO)

HMOs are organizations that provide or arrange for the delivery of health care services to their members in exchange for monthly premiums. Covered services typically include hospitalization, surgery, routine doctor visits, diagnostic tests and prescription drug treatment. As with other managed care plans, HMO members usually pay a copayment when they visit a health care provider. HMOs in North Carolina use networks of contracted doctors, hospitals and other providers to keep costs low. One benefit of this is that the insured person will minimize out-of-pocket costs by using a network provider.

Traditional HMO Plans - HMO members are generally required to seek health care treatment at designated hospitals, physicians, HMO facilities and other in-network providers, except in the case of emergency. Some HMO plans require PCP referrals in order to see a specialist, and all have UR programs that review the medical necessity of at least some requested health care services.
HMO "Point of Service" (POS)Plans - POS plans are a more flexible type of HMO plan. POS members may choose to see out-of-network providers for covered services, but at a higher out-of-pocket cost. Such plans may cover certain services only when received from in-network providers. Sometimes, POS plan members must choose a primary care physician and obtain referrals to specialists from their PCP. Other POS plans are "open access," meaning that no PCP referral is required to see a specialist.

Preferred Provider Organization (PPO) Benefit Plans

PPO Benefit Plans are offered by insurance companies rather than HMOs. In many ways, these plans resemble HMO Point of Service plans; insureds may select from a network of contracted physicians, hospitals and other health care providers, or use an out-of-network provider and be required to pay a higher share of the cost. PPO plan members may generally see specialists without any prior referral or authorization

Utilization Review (UR) Programs

Most health insurance plans, even traditional ones, make use of UR programs, which use established medical review criteria to determine whether requested medical services are "medically necessary." Only medically necessary services are covered under the plan. A plan's UR program must be administered by qualified health care professionals, under the direction of a medical doctor who is licensed in North Carolina.

A health insurance plan that uses Utilization Review must:

Routinely evaluate the effectiveness and efficiency of its UR program.
Coordinate the UR program with its other medical management activities including quality assurance, credentialing, provider contracting, data reporting, grievance procedures, customer satisfaction and risk management.
Provide a toll-free number or a can contact staff to receive prior approval (known as pre-certification) of services when required.
Limit requests for information to only information necessary to certify the admission, procedure or treatment, length of stay and frequency and duration of health care services.
Notify members (and their providers) of the decision whether or not to certify services within three business days of receiving all information regarding a request for services.
When an insurance company denies a request, it must:
- Issue a written noncertification decision that includes all of the reasons for the denial and a reference to the medical criteria used to deny the request;
- Inform the member on how to request a copy of the medical criteria; and
- Advise the member of the right to appeal the decision and explain how to file an appeal.
Have written procedures to address the failure or inability of a provider or covered person to provide all necessary information for review.

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