Preferred Provider Organizations (PPOs)

20.2.2 - Preferred Provider Organizations (PPOs) (Rev. 124, Issued: 11-10-16; Effective: 11-10-16; Implementation: 11-10-16) A PPO is a CCP plan that provides for reimbursement for all covered benefits regardless of whether the benefits are provided within the plan’s network of providers (42 CFR 422.4(a)(1)(v)(B); Section 1852(e)(3)(iv) of the Social Security Act). PPOs may be local or regional (42 CFR 422.4(a)(iii)(C)). Local PPOs - A local PPO has a service area that is specified by the organization offering the plan and approved by CMS. Its service area typically will consist of one or multiple counties. However, as noted in Chapter 4 of the Medicare Managed Care Manual, Section 140, CMS may allow service areas to contain partial counties if the plan can demonstrate that this is necessary, non-discriminatory and in the best interests of the plan enrollees (See also 42 CFR 422.2 (definition of service area)). Regional PPOs (RPPOs) - The MMA introduced the RPPO option in an effort to expand access to MA managed care to include Medicare beneficiaries living in rural areas. RPPOs may be offered only in one or several, but not in parts, of the 26 MA regions established by CMS for RPPOs. See http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/Downloads/MAPDRegions.pdf for the location of the MA regions; each MA region consists of one or more states. RPPOs must offer a uniform benefit package across the service area, must establish a ‘catastrophic’ maximum enrollee out-of-pocket cost sharing limit, and must establish a provider network approved by CMS. In those portions of its service area where it is possible, RPPOs should meet network adequacy criteria for original Medicare services by having written contracts with a full network of providers. In more rural areas, RPPOs may request an exception to CMS’s requirement that the RPPO have written contracts in order to meet network adequacy criteria (42 CFR 422.112(a)(1)(ii)). RPPO plans offered by MA organizations must be licensed or otherwise authorized under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each state in which it offers one or more MA plans. See Chapter 4 of the Medicare Managed Care Manual for information on deductibles as well as catastrophic limits on cost sharing for RPPOs. Annually, CMS issues information about deductibles and cost sharing for the following contract year in the Call Letter. Current and past Call Letters may be accessed at: https://www.cms.gov/Medicare/Health- Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html