Quick Answer
Medical plans differ in covered expenses, networks, referrals, and review rules. Health maintenance organization, preferred provider organization, and point-of-service labels describe common access patterns, but the contract controls. Utilization review does not guarantee claim payment. When plans overlap, coordination rules determine payment order, while subrogation concerns recovery from a responsible third party.
Separate access, clinical review, claim payment, payment order, and third-party recovery.
How Do Medical Plan Designs Differ?
| Design | Common pattern |
|---|---|
| Basic hospital or medical-surgical | Pays listed services and stated amounts. |
| Major medical | Covers broader eligible expenses, subject to cost sharing, exclusions, and limits. |
| Health maintenance organization (HMO) | Usually emphasizes network care and may require a primary-care provider and referrals, generally excepting emergencies. |
| Preferred provider organization (PPO) | Commonly allows direct specialist access and may cover out-of-network care at higher member cost. |
| Point-of-service (POS) | Combines network coordination with some out-of-network coverage under plan terms. |
- Network status and covered-service status answer different questions.
- A referral does not place a provider in the network. A missing referral can change cost sharing without always eliminating the benefit.
When Does Utilization Review Happen?
| Timing | Review | Purpose |
|---|---|---|
| Before care | Preauthorization | Reviews a proposed service before it occurs. |
| During care | Concurrent review | Reviews whether continuing services meet plan criteria. |
| After care | Retrospective review | Uses completed-care records to evaluate medical necessity and other criteria. |
- Case management coordinates providers and settings for complex care needs.
- Approval remains subject to eligibility, the service received, billing codes, documentation, exclusions, and cost sharing.
Which Plan Pays First When Coverage Overlaps?
Coordination of benefits uses the first applicable contract rule that decides the order.
- A person's own employee or member coverage generally pays before coverage as another person's dependent.
- For a child covered under married or cohabiting parents' plans, the parent with the earlier birthday month and day is generally primary. A known court decree can change the result.
- If earlier rules do not decide, active coverage generally precedes retired or laid-off coverage, ordinary coverage precedes continuation coverage, and longer continuous coverage comes next, subject to plan terms.
- The primary plan applies its terms first. The secondary plan then considers eligible remaining expenses under its own deductible, exclusions, formula, and limits. It does not automatically pay every balance.
How Do Claim Records and Recovery Rights Differ?
- An explanation of benefits shows how the plan processed a claim. It is not a bill.
- For a secondary claim, report the primary insurer's payment rather than the provider's bill or member's share.
- Coordination orders payment between plans. Subrogation lets an insurer seek recovery after paying a covered loss from a third party responsible for it.
Which Gotchas Trip Students Up?
- Plan labels describe common structures; they do not establish every benefit or referral rule.
- Preauthorization is an advance review, not final claim approval.
- Primary means first to process under its terms, not responsible for the full bill.
- Subrogation concerns recovery after payment, not the order between health plans.
One-Breath Recap
Basic policies pay listed benefits; major medical covers broader eligible expenses. Health maintenance organization, preferred provider organization, and point-of-service plans use different common network and referral patterns, but actual terms control. Preauthorization, concurrent review, and retrospective review occur before, during, and after care, and none replaces claim rules. Coordination makes one plan primary and another secondary under the first applicable rule. Subrogation instead seeks recovery from a responsible third party after payment.
Need more than the recap? Read the full Medical Plans and Managed Care unit.