EPO (exclusive provider organization) means the patient must go in-network to receive the plan’s benefit. Because of its structure, it operates similar to an HMO. However, reimbursement payments are made on a fee-for-service basis, rather than “capitation + co-pay.” All providers are contracted, and fee schedules reflect the contracted fees. Fee schedules are likely to vary geographically; that is, by zip, by state, or by region.
PPO (preferred provider organization) allows reimbursement for out-of-network benefits. In-network benefits are negotiated; out-of-network reimbursement rates are based on the payer’s UCR (usual, customary rate), sometimes called U&C (usual and customary).