New Jersey · Accident & Health SampleInteractive Mind Map
PPOs and Point-of-Service (POS) Plans
A visual breakdown of PPOs and Point-of-Service (POS) Plans — one of the concepts you can count on seeing on the exam.
The TESTivity Interactive Mind Mapping Graphic we picked for the New Jersey Health Insurance sample is PPOs and Point-of-Service (POS) Plans — and this is a concept you can count on seeing on your pre-licensing exam. Get the structure straight once and those questions turn into free points.
So explore it. Click through, see how the pieces relate, and let the layout do some of the remembering for you.
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PPOs answered a simple demand: more freedom than an HMO, without giving up network discounts.
A PPO contracts with preferred providers at discounted rates but lets members go anywhere — rewarding network use with lower cost-sharing.
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No PCP Required
PPO members are not required to designate a primary care physician. There is no gatekeeper.
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No Referral Needed
Members self-refer directly to specialists — in or out of network — with no PCP authorization. This is the biggest break from a traditional HMO.
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Two Benefit Tiers
Higher benefits in-network, lower benefits out-of-network — but coverage exists at both levels. The member always has a choice; going outside just costs more. Premiums run higher than an HMO.
How they test thisA PPO member seeing a dermatologist without a PCP referral is covered — PPOs don’t require referrals. The single biggest PPO-vs-HMO distinction: HMOs require a PCP referral; PPOs let you self-refer. (Capitation is an HMO trait; PPOs typically use negotiated fee-for-service.)
The whole point of a PPO is the cost gap between staying in-network and going out.
In-network is cheap and clean; out-of-network means a bigger deductible, higher coinsurance, and the risk of balance billing.
Higher deductible and coinsurance (e.g., 60/40 instead of 80/20).
Provider deal
Accepts the negotiated fee as payment in full — no balance billing.
Provider deal
Plan pays on UCR; charges above it can be balance-billed to the member.
Claims
Handled directly between provider and insurer.
Claims
Member may pay first, then seek reimbursement.
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Out-of-network math — work it in two pieces
OON surgeon charges $5,000; plan’s allowed amount (UCR) is $4,000; plan pays 60% of allowed. Plan pays 60% × $4,000 = $2,400. The member owes 40% of $4,000 ($1,600) PLUS the $1,000 balance above UCR = $2,600. The balance-billed amount above UCR is the part students forget.
A POS plan is the hybrid: HMO on the inside, PPO on the outside.
Use the network through a PCP for HMO-level cost; or step outside at the “point of service” for PPO-style freedom at a higher price.
🧠 Memory Aid — freedom costs moneyHMO = closed network, PCP + referral required, lowest premium · PPO = open network, no PCP, no referral, higher premium · POS = HMO inside + PPO outside, most flexible, highest premium. The more freedom you want, the more you pay.
🏠 In-Network (HMO side)
🏝️ Out-of-Network (PPO side)
How to access
Through a designated PCP who coordinates care.
How to access
Go outside without a referral, at the point of service.
Cost
Lowest — HMO-level copays, often no deductible.
Cost
Highest tier — big deductible and higher coinsurance.
How they test thisFor the lowest cost in a POS plan, the member uses a network provider coordinated through their PCP (the HMO tier). Asked which plan has the highest premium and most flexibility → POS. PPO sits between HMO and POS on both cost and freedom.
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Top Exam Tips — PPOs and POS Plans
1. PPO essentials: no PCP, no referral, two benefit tiers, premium higher than an HMO. Coverage exists in AND out of network. 2. Biggest PPO-vs-HMO difference: HMOs require a PCP referral; PPOs allow self-referral to specialists. 3. Out-of-network math: coinsurance on the allowed amount PLUS the balance above UCR (balance billing). In-network providers can’t balance-bill. 4. POS = HMO inside (via PCP, lowest cost) + PPO outside (no referral, highest cost). Most flexible, highest premium. 5. Spectrum: HMO (lowest cost / least flexible) → PPO (middle) → POS (highest cost / most flexible).
Exam vocabulary
Key Terms to Know
PPO (Preferred Provider Organization)
Managed care with a preferred-provider network; no PCP and no referral required; both in- and out-of-network benefits.
In-Network Provider
A provider contracted to accept the plan’s negotiated fee as payment in full.
Out-of-Network Provider
A non-contracted provider; higher cost-sharing for members and potential balance billing.
Balance Billing
A non-network provider billing the patient for the difference above the plan’s payment; prohibited for in-network providers.
POS (Point-of-Service) Plan
A hybrid combining HMO-style in-network access (via PCP) with PPO-style out-of-network access at higher cost.
Self-Referral
Seeing a specialist without PCP authorization; allowed in PPOs and open-access HMOs.
Network (Preferred) Provider
A provider participating in a managed care plan’s network at negotiated discounted rates.
Tiered Benefits
Different cost-sharing levels for in-network vs. out-of-network providers within the same plan.
Allowed Amount (UCR)
The maximum a plan recognizes for an out-of-network service; charges above it may be balance-billed.
Flexibility/Cost Spectrum
HMO (lowest cost, least flexible) → PPO (middle) → POS (highest cost, most flexible).
Like learning this way? There's a whole library of them.
If the old manual you inherited from the office breakroom isn't cutting it and this
format fits how your brain actually works, you'll want the rest. There are
52 Interactive Mind Maps like this one in the
TESTivity Platinum Accident & Health package — covering the full curriculum, right alongside
the practice questions, exam simulators, and study guides.
