PPOs have gained popularity because, although they tend to have slightly higher premiums than HMOs and other more restrictive plans, they offer patients more flexibility overall.
[2] In 1980, an early PPO was organized in Denver at St. Luke's Medical Center at the suggestion of Samuel Jenkins,[3] an employee of the Segal Group who consulted with hospitals for Taft-Hartley trust funds.
Another near-universal feature is a pre-certification requirement, in which scheduled (non-emergency) hospital admissions, and in some instances, outpatient surgery, must have the prior approval of the insurer and must often undergo "utilization review" in advance.
[6] EPO members, on the other hand, receive no reimbursement or benefit if they visit medical care providers outside of their designated network of doctors and hospitals.
Unlike PPOs, however, HMOs often require members to select a primary care physician (PCP), a doctor who acts as a gatekeeper to direct access to non-emergency medical services, and are required to first obtain a referral from their PCP in order to be reimbursed for the cost of medical services inside of their network of designated doctors and hospitals.