Product Portfolio 1:
HMO and PPO
Product Portfolio 1: HMO and PPO
Product Portfolio 1 Overview
This presentation provides a general overview of our HMO and PPO products.
Objectives
After viewing this presentation, you should be able to:
• Describe the basic features of core HMO and PPO products.
• Describe the products we offer to employer groups and individuals.
Disclaimer: All individually identifiable health information contained within this lesson is fictitious and should be kept
highly confidential. Any association to any person, living or dead, is purely coincidental. The information contained
within this lesson is not for use/disclosure outside of Health Care Service Corporation and its affiliated companies.
Product Portfolio 1: HMO and PPO
Introduction to the
Product Portfolio Lessons
Over the past few decades, health care insurance has evolved, moving from traditional coverage options to more
cost-effective managed care plans. Twenty years ago most people had indemnity plans, also known as
traditional or fee-for-service insurance. A person with an indemnity plan could see any provider, and both the
insurance company and the individual shared the cost of service. These days most people are opting for managed
care plans such as HMOs, PPOs and Consumer-Driven Health Plans. These plans provide a more organized
system of delivering and paying for health care. In light of this shift in health insurance, HCSC has continued to
evolve in its sophisticated product offerings.
At HCSC our mission is to promote accessible, cost-effective and quality health care. To do this, we must offer a
wide variety of product options. And that’s exactly what we do. Our product portfolio is diverse to meet the diverse
needs of our employer groups and individual members. It’s no surprise that 1 in 3 Americans are Blues members,
and 97% of Americans recognize our brand!
To complement our comprehensive portfolio, we approach health care insurance with a unique customer service
strategy. Let’s take a closer look…
1 in 3 Americans
are with the
Blues!
Product Portfolio 1: HMO and PPO
Introduction to the
Product Portfolio Lessons
Simply put, our goal is to provide our members with an unmatched health care experience. We achieve
this by:
• empowering them to become better, more proactive health care consumers.
• engaging them at every stage of their health care continuum.
• creating a seamless, hassle-free product experience with easy-to-access benefit and claims
information, nationwide coverage and excellent customer service.
• We empower members to be • We engage members at
more accountable and
proactive about their health
care.
every stage of their health
care experience.
• We create a seamless,
hassle-free health care
experience.
Keep this strategy in mind as we discuss our product portfolio. You’ll see how these three goals play an
essential part in defining the products we offer. In the next section you’ll learn about HMOs. It provides a
general overview of HMOs, followed by information about our specific HMO products.
Product Portfolio 1: HMO and PPO
HMO Products
Product Portfolio 1: HMO and PPO
HMO Overview
An HMO or health maintenance organization is a managed care plan created to help lower health care costs for
both members and providers. In this type of plan, members choose from an HMO network of IPAs and primary
care physicians. Members must first select a Primary Care Physician (PCP) who is in the approved HMO network.
The PCP facilitates all medical care for the member and provides referrals to any necessary specialists. By acting
as an initial “gatekeeper,” the PCP helps to reduce medical costs and unnecessary procedures. After treatment,
the member does not have to submit a claim form, and covered services are usually paid after the member pays
any required copayment. However, the member is responsible for any services done outside of the approved
network, except in emergencies. HMOs are offered to both small and large groups; depending on the size of the
group, customized plans may be offered.
*Underlined terms are listed in the Glossary of Terms at the end of the presentation
Product Portfolio 1: HMO and PPO
HMO Overview
Our HMO program provides comprehensive benefits, superior service, financial stability and reliability – all at an
affordable price. We focus on our members’ total well-being by providing coverage designed to help them stay
well, while at the same time controlling costs. The HMO covers routine office visits, preventive services such as
periodic physical examinations, immunizations and maternity care. Here are some other key features of our HMO
products:
HMOs are generally available to groups of 2 or more employees.
Members have a limited selection of available providers.
HMOs provide lower out-of-pocket costs for members. Members pay coinsurance, but not a deductible.
HMOs focus on prevention and wellness. Targeted members receive care and wellness reminders in the mail.
Members select their PCP from an Independent Physician Association (IPA).
The BlueCard® Program provides services when traveling or living in another Plan's service area. For members
who are away from home for at least 90 days, the Away from Home Care Program provides nationwide access to
providers at a participating BCBS HMO.
Generally, HMOs are customizable for Large Groups (151+), whereas products for small and mid-size groups are
usually standardized.
Members receive "BluePrints for Health," a quarterly newsletter containing useful wellness articles and benefit
updates.
*Underlined terms are listed in the Glossary of Terms at the end of the presentation
Product Portfolio 1: HMO and PPO
Illinois HMO Plans
• HMO Illinois is the basic HMO. It is one of
the largest contracting networks of doctors
and hospitals in Illinois. Many people don't
need to change doctors when they join.
• BlueAdvantage HMO is a subset of the HMO
Illinois network, offering a smaller
contracting provider network. Tailored for
those who prefer a more affordable health
care premium, BlueAdvantage HMO
employee costs are typically less than HMO
Illinois‘ rates.
Key Points
Product Portfolio 1: HMO and PPO
• An HMO is a managed care plan in which members must first select a Primary
Care Physician (PCP) who is in the approved HMO network.
• The PCP facilitates all medical care for the member and provides referrals to any
necessary specialists. By acting as an initial “gatekeeper,” the PCP helps to
reduce medical costs and unnecessary procedures.
• HMOs focus on prevention and wellness. Targeted members receive care and
wellness reminders in the mail.
• The member is responsible for any services done outside of the approved
network, except in emergencies.
• Generally, HMOs are customizable for Large Groups (151+), whereas products
for small and mid-size groups are usually standardized.
Product Portfolio 1: HMO and PPO
PPO Products
Product Portfolio 1: HMO and PPO
PPO Overview
A PPO or preferred provider organization is a network of contracting
providers who agree to provide services to members at discounted rates.
This type of plan is mutually beneficial to both the insuring group and the
provider since the insurer receives substantial discounts, while the provider
sees an increase in patients. The overwhelming majority of our members select
one of our PPO products.
In a PPO members typically make their own decisions about their health care
rather than using a PCP as with an HMO. Members may choose to see any
physician, including specialists, within the network, without a referral. In most
PPO plans the member must meet a deductible (a specific dollar amount
which must be paid toward eligible medical expenses before benefits will be
paid).
PPO members receive a list of doctors who participate in their plan’s network.
They also have web access to provider directories. When a member chooses
an in-network provider, expenses are covered at the full benefit level. When a
member goes outside of the network, services are paid at a reduced benefit
level, and members are responsible for paying any additional out-of-pocket
expenses.
Product Portfolio 1: HMO and PPO
PPO Overview
100%
HMO
Product Membership
90%
POS
80%
70%
60%
50%
40%
PPO
Includes
small %
of CDHP
products
30%
20%
10%
0%
Trad.
Illinois
As you can see, our PPOs are by far the most popular options across the four
Divisions. Keep in mind that the PPO numbers also include a small percentage of
CDHP products.
Product Portfolio 1: HMO and PPO
PPO Overview
How we set up our
networks.
How BCBS sets up its PPO networks
BCBS actually pioneered the concept of close relationships with providers back
in the 1920’s. Instead of simply administering and paying benefits, we formed
partnerships with hospitals and physicians to create coordinated accountable
health plans. We’ve been contracting with providers for almost 80 years – longer
than competitors who didn’t start contracting until the concept of PPO networks
evolved in the 1970’s. We have the largest PPO network in the industry with
networks in 49 states.
In developing our networks, we focus on including physicians who represent a
full range of specialties and who deliver cost-effective care. We consider the
following factors:
• Geographic Access: Our network ensures the availability of an extensive, full
range of services throughout the member’s state.
• Utilization Guidelines: Each provider agrees to follow our total integrated
health management programs, to hold members free of charges exceeding our
contracted allowance and to refer members to other PPO networks when
appropriate.
• Controlling Costs: Network hospitals contract with BCBS to provide care for
our PPO members in accordance with negotiated fee schedules.
Product Portfolio 1: HMO and PPO
PPO Overview
The benefits included
with our products.
Additional PPO benefits
In addition to health care services, PPO products come with our integrated
health care management tools, collectively known as Blue Care Connection.
This suite of resources and support services provides personalized attention,
health advocacy and condition-specific information. Here are some examples of
what’s included in Blue Care Connection:
• Personal Health Manager
• Blue PointsSM
• Blue Care Advisor
• 24/7 Nurseline
Product Portfolio 1: HMO and PPO
PPO Overview
Another PPO benefit is the PPO BlueCard® Program, in which members
have access to PPO providers throughout the United States. Members can
take advantage of the negotiated discounts available from PPO providers while
traveling or residing outside of their service area.
Look for the BlueCard® PPO Suitcase
Logo on the Membership Card
This logo indicates that members from any
BCBS Plan have PPO benefits that are
delivered through the BlueCard® Program.
PPO Overview
BlueCard® Program
Blue Cross and Blue Shield Plans administer national PPO benefits
through BlueCard®, a program that provides easy access to providers
across the country, including 835,700 physicians and 5,570 hospitals.
The BlueCard® membership card is recognized and accepted by Blue
Cross and Blue Shield contracted hospitals and physicians —
allowing multi-state employers to offer the same benefit plan to their
employees in almost every national location. Benefits remain
consistent while traveling or living in another Blue Cross and Blue
Shield Plan’s network service area.
There is no balance billing to the patient above the Blue Cross and
Blue Shield approved charge; the patient is responsible only for any
applicable deductible and/or copayments. Additionally, members must
comply with the preauthorization and referral requirements stated in
their benefits program
Product Portfolio 1: HMO and PPO
Illinois-specific PPOs
As with our HMOs, we offer a wide variety of PPO products to meet market and customer demands.
BAE PPO/PPO Value Choice
BlueAdvantage Entrepreneur is a triple option product designed and priced for employer groups with 2 –
50 employees. BlueAdvantage Entrepreneur lets groups design the health benefits plan that best suits
their company's needs and budget. The portfolio includes PPO plans with a wide range of deductible,
coinsurance and out-of-pocket maximum options.
Special Features
• PPO and PPO Value Choice Plans
• Access to the PPO network of physicians and hospitals
• No referrals necessary
• Full coverage throughout the United States and many foreign countries with the Blue Care Program
• Coverage also includes preventive care benefits for well-child and adult care, including: physical
exams, diagnostic tests and immunizations
• Pharmacy benefits including retail and home delivery services
Product Portfolio 1: HMO and PPO
Illinois-specific PPOs
CPO/CPO Value Choice
The CPO and CPO Value Choice plans are a three-tiered PPO plan. When a member receives
care from their chosen CPO provider, benefits are paid at the highest level. When a network
PPO provider is used, benefits are still paid at an in-network level, but lower than services from
a CPO provider. The option of receiving care from outside the network is always available and
benefits will be paid at the lower level. These community-based health care plans offer the
convenience and security of local contracting physicians and hospitals. CPO plans support
local employer, doctors and medical facilities in many communities. Each CPO is designed
around specific local or regional health care systems in the communities throughout the state of
Illinois.
Special Features
•Employer groups have the choice of deductible amounts and annual out of pocket maximum
amounts
•No referrals necessary
•Members choose their own provider – in or out of network
•Full coverage throughout the United States and many foreign countries with the BlueCard
Program
•Vision discount program
•Pharmacy benefits including retail and home delivery services
Product Portfolio 1: HMO and PPO
Illinois-specific PPOs
BlueChoice Select
The BlueChoice Select plans are available for employer groups with 2+ employees and offers access to
a focused hospital and physician network
The hospital network is based on geographic accessibility, the number of board certified doctors on
staff, status with the Joint Commission on Accreditation of Healthcare Organizations and clinical care
indicators developed by the Agency for Healthcare Research and Quality, an agency of the U.S.
Department of Health and Human Services. Clinical care indicator scores of hospitals in the network for
the BlueChoice Select product are comparable to the scores of those in the broad network for the Point
of Service product
Special Features
•Employer groups have the choice of deductible amounts and annual out of pocket maximum amounts
•Access to a value-based network of contracting doctors and hospitals in Illinois
•No primary care physician required
•No referrals necessary
Product Portfolio 1: HMO and PPO
Illinois-specific PPOs
BluePrint PPO
BluePrint (BP) is a triple option product designed and priced for employer groups with 51+
employees. BluePrint lets groups design the health benefits plan that best suits their
company's needs and budget. The portfolio includes PPO plans with a wide range of
deductible, coinsurance and out-of-pocket maximum options, HMO plans with several
copayment options and other low cost plan options.
Special Features
PPO and PPO Value Choice Plans
•Access to the PPO network of physicians and hospitals
•No referrals necessary
•Full coverage throughout the United States and many foreign countries with the Blue Care
Program
•Coverage also includes preventive care benefits for well-child and adult care, including:
physical exams, diagnostic tests and immunizations
•Pharmacy benefits including retail and home delivery services
Product Portfolio 1: HMO and PPO
Products for Individuals Under 65
We've given you a general overview of
our PPOs. Now let’s discuss some of the
products specifically aimed towards
individuals.
Most of our members are covered by
group plans. A group is defined as two
or more employees enrolled through an
employer, association or other
organization.
We also have plans for individuals, who
aren’t part of a group. In these plans, the
individual is responsible for the entire
premium.
Another key difference between a group
and individual policy is individual policies
are always underwritten and usually
include a preexisting condition exclusion.
Underwriting refers to the process of
identifying and classifying an
applicant’s degree of risk. This
determines whether the individual
should be insured, and if so, how much
the premium will be. Group policies are
also underwritten, but it’s the actual
group rather than the group’s individual
employees that is underwritten.
Most individual health plans include a
preexisting condition exclusion.
This means that applicants who have a
medical condition before the policy
begins may have to wait a certain
period of time before the plan will
cover that condition.
Product Portfolio 1: HMO and PPO
Products for Individuals Under 65
Each Division has various products for individuals under the age of 65. Here’s an overview of the product types:
High Performance
Network PPO
These plans typically
offer a smaller
network with fewer
providers. They have
more limited
accessibility, but come
with lower premiums.
Examples:
BlueChoice Select,
BlueChoice Value
Traditional PPO
These plans are
standard PPOs.
Catastrophic or
Hospital Only PPO
These plans provide
inpatient coverage
only.
Examples:
BlueValue, SelectBlue Example:
BasicBlue
HSA (Health
Savings Account)
An HSA is a savings
account that a
member can use to
help pay a high
deductible, as well as
any other eligible
medical expenses that
may not be covered
after meeting the
deductible.
Example:
BlueEdge HSA
Short-term PPO
These plans provide
temporary health
insurance for up to 6
months.
Example:
SelecTEMP PPO
Product Portfolio 1: HMO and PPO
Medicare Advantage and Medicare Supplement Plans
For those over 65, we provide Medicare Advantage and Individual Medicare
Supplement plans.
Medicare Advantage Plans
Congress created the Medicare Advantage program to offer Medicare beneficiaries
more choices, and in many cases, more benefits than those in the traditional Parts A
and B program.
Individual Medicare Supplemental Plans
Medicare Supplement plans are designed to augment the benefits of Medicare Parts
A and B. They’re not part of the Medicare Advantage program, and only individuals
without group insurance are eligible for supplemental coverage. For those covered
by group insurance, the group coverage acts as the primary insurance with Medicare
providing secondary coverage.
Federally-mandated “Standardization” requires that insurers selling supplemental
coverage sell the same types of plans. Depending on which plan is chosen, we pay a
portion or all copays, deductibles and coinsurance. In Illinois we also have Medicare
Select plans, which provide the same benefits as the standardized plans, but come
with a reduced premium for using a PPO network.
Medicare Prescription Plans
We also offer Medicare Prescription plans (Part D) which supplement Medicare
coverage with drug benefits.
Product Portfolio 1: HMO and PPO
Transparency
Now that we’ve introduced you to our HMOs and PPOs, it’s time to discuss an important feature that goes hand in
hand with our products.
especially CDHP members, have choices when they make health care decisions. More and
more expect “transparency.” They want easy access to relevant and accurate provider information to help
them make cost-efficient
Our PPO members,
decisions.
We are responding to this need by giving members access to online health information such as costs of procedures
and hospital comparisons.
Product Portfolio 1: HMO and PPO
Transparency
Members have access to various online health tools through our self-service website—Blue Access® for
Members. Through BAM, members can better manage their health care and access important information to
help them make more cost-effective decisions. They can review their claims activity, use a health care cost
calculator, compare hospitals and find prescription drug information.
Through the Personal Health
Manager, members can seek
personalized information from
nurses, trainers, dietitians
and life coaches. They can
also complete the online
Health Risk Assessment.
Personal Health Manager
Health Risk Assessment
Product Portfolio 1: HMO and PPO
Transparency
Members have access to various online health tools through our self-service website—Blue Access® for
Members. Through BAM, members can better manage their health care and access important information to
help them make more cost-effective decisions. They can review their claims activity, use a health care cost
calculator, compare hospitals and find prescription drug information.
Hospital Comparison Tool
Treatment Cost Advisor
BAM also provides several
online transparency tools to
help members calculate their
out-of-pocket costs BEFORE
a hospital admission or
surgery. Our members
enrolled in high-deductible
health plans such as Health
Savings Accounts or Health
Care Accounts find these
tools to be especially helpful.
Key Points
• In a PPO plan members may choose to see any physician within the network, without a referral. In most
plans the member must meet a deductible.
• PPOs are by far our most popular product.
• We have the largest PPO network in the industry with networks in 49 states.
• When setting up networks, we consider geographic access, utilization guidelines and controlling costs.
• Blue Care Connection is a suite of resources and support services that provides personalized attention,
health advocacy and condition-specific information. (Examples: Personal Health Manager, Blue PointsSM,
Blue Care Advisor and the 24/7 Nurseline)
• The PPO BlueCard® Program gives members access to PPO providers throughout the U.S.
• In individual plans, the individual is responsible for the entire premium. Also the policies are always
underwritten and usually include a preexisting condition exclusion.
• Our PPO members, especially CDHP members, expect transparency, meaning they want easy access to
relevant and accurate provider information to help them make cost-efficient decisions.
Product Portfolio 1: HMO and PPO
Summary
This concludes the Product Portfolio 1: HMO and PPO lesson. You should now be
able to:
• Describe the basic features of key HMO Illinois and BlueAdvantage HMO
• Describe the basic features of PPO Plans.
• Describe the basic features of the BlueCard Program
Glossary of Terms
Managed Care
A health care system that delivers care through a contracting
network of providers. These providers agree to comply with the
care approaches established by a care-management process.
Providers may receive a “capitated” payment (prepayment made
on a per subscriber or family basis) for providing care, or they
may be paid on a discounted fee-for-service basis.
Network
A group of physicians, hospitals and other medical care
professionals that a managed care plan has contracted with to
deliver medical services to its members. HCSC’s networks are
broad, offering widespread access to the continuum of care,
including PCPs, specialists, behavioral health care providers,
hospitals and pharmacies. Networks also include several different
types of ancillary providers such as imaging centers, laboratories,
home health care, durable medical equipment, home infusion
therapy, hospice, skilled nursing facilities and radiation therapy
centers. We pride ourselves on the fact that more than 85% of all
doctors and hospitals throughout the U.S. contract with a BCBS
Plan.
Primary Care Physician (PCP)
With HMO coverage, members select a PCP from a
network family of practitioners, internists and
pediatricians. Female members have direct access to
network OB/GYNs for annual well-woman exams,
pregnancy and gynecological issues. To help members
select PCPs, we provide user-friendly paper and online
directories and toll-free customer service assistance.
Eligible family members may choose different PCPs, or
the entire family may select the same PCP.
Copayment
The flat dollar amount or a percentage that a member
pays out of pocket at the time of receiving a service.
Coinsurance
A method of cost-sharing that requires a member to pay
a set percentage or set dollar amount towards eligible
medical expenses.
Independent Physician Association (IPA)
An organization comprised of individual physicians or
physicians in small group practices.