POS plans combine features of a health maintenance organization (HMO) and a preferred provider organization (PPO) plan.
POS plans can be insured, self-insured, or HMO risk-bearing entities, thereby combining the high reimbursement level of an HMO in-network option, with an out-of-network benefit offered by PPOs. In-network services generally require a referral from the member’s Primary Care Physician.
State law may govern POS plans. Depending on the state law, HMOs, insurers, or a combination of both may be authorized to underwrite and offer POS plans. Some states require a POS out-of-network option to be offered by insurance companies, resulting in “wrap around” product (resulting in an HMO insuring in-network services and an insurance company insuring out-of-network services).
Excerpt from Lois Dehls Cornell, Managed Care Nuts and Bolts, Fundamentals of Health Law (American Health Lawyers Association Nov. 2011).