Which elements are common to both HMOs and PPOs?

• A. Capitation, Co-Payment, Co-Insurance
• B. Fee-for-service with no restrictions
• C. Unlimited referrals without authorization
• D. No cost-sharing

Answer: (A)

Cost-sharing and how providers are paid are the threads that run through both HMO and PPO plans. Co-payments and coinsurance are the patient’s share of the cost for each visit or service, and they’re typical in both types of plans. Capitation—being paid a fixed amount per enrolled patient per period—addresses cost control from the provider side and is a common way HMOs pay their network physicians; many PPO arrangements also use capitation for certain provider groups or services. So, the elements you’d see in common across these plans include capitation along with the patient cost-sharing features of co-payments and coinsurance.