How Referrals Work With Your Health Insurance

Depending on the type of health insurance you have, you may not be able to go straight to a specialist when you think you need the services they offer.

If you have a health maintenance organization (HMO) or point of service (POS) plan, you'll probably need to go to your primary care physician (PCP) first. If they agree that you need to see a specialist, they'll refer you to one and make note of it in your medical file. Some health plans require that the referral be made in writing while others accept a phone call.

If the health plan requires a referral from a PCP in order to cover visits to a specialist, you'll need to make sure that the referral has been sent to the specialist and the health plan before you schedule your appointment with the specialist.

This article explains how referrals work with HMOs and POS plans, and how they're generally not required in PPOs and EPOs. It also points out how insurance payment for services within a designated network varies based on whether the plan is in-network or out-of-network.

Referrals for HMO and POS Plans

In most cases, heath maintenance organizations (HMOs) require you to select a primary care physician (PCP). The physician is then responsible for managing all of your health care going forward. This authority includes making recommendations for treatment, medications, and other issues.

The primary care physician also makes referrals for any other necessary services or specialist visits. These referrals allow you to see another doctor within the health plan’s network. If you do not have a referral from your primary care physician, your HMO is unlikely to cover the service.

Some modern HMOs have relaxed these rules and allow members to visit specialists within the plan's network without having a referral from their primary care physician. So you'll want to check the specific requirements of your plan.

Regardless of whether a referral is required, HMOs generally require members to get all of their care from providers who are in the plan's network. Out-of-network care is covered only in emergency situations.

Point-of-service plans also require referrals from a PCP in order to see a specialist. But unlike an HMO, a POS plan will generally cover some of the cost of out-of-network care, as long as you have a referral from your PCP. (With an HMO, the referral still has to be for a specialist that participates in the plan's network. This is the case unless there isn't one available and the health plan makes an exception in order to ensure access to necessary care).

PPOs, EPOs Bypass Referrals

Referrals are generally not necessary for a preferred provider organization (PPO) or an exclusive provider organization (EPO).

A PPO is a health plan that has contracts with a wide network of "preferred" providers. You are able to choose your care or service out of the network as well (but your costs will be higher, and you could also receive a balance bill from the medical provider, in addition to your stated out-of-network cost-sharing).

An EPO also has a network of providers, but it generally will not cover any out-of-network care unless it's an emergency.

Unlike a health maintenance organization, in a PPO or EPO, you generally do not need to select a primary care physician and you do not need referrals to see other providers in the network. Because of this flexibility, PPO plans tend to be more expensive than HMO plans with otherwise comparable benefits. (Note that it's still a good idea to have a PCP who can help you coordinate your care; just because your health plan doesn't require a PCP or referrals doesn't mean you can't have them.)

In fact, although PPOs are still the most common type of employer-sponsored plan, they aren't as common in the individual market as they once were because insurers have found them more expensive to offer.

Prior Authorization

Depending on the service you need, prior authorization from your insurance plan may be necessary in addition to the referral from your PCP. Your PCP might automatically obtain prior authorization as part of the referral process.

But as a general rule, double-check with your insurer and the specialist before you receive treatment to be sure that prior authorization has been granted if it's required by your health plan. If you don't have prior authorization and your health plan requires it, they can deny the claim even if it's something that would otherwise have been covered by the plan.

Payment

Insurance payment for medical services will vary depending on whether the medical provider is in-network or out-of-network with the patient's health plan.

In-Network

When you receive medical care from an in-network provider, regardless of whether you have an HMO, EPO, PPO, or POS plan, you'll be responsible for cost-sharing (copay, deductible, and/or coinsurance) unless you've already met your plan's out-of-pocket maximum for the year or are receiving a cost-free preventive service.

(The different types of cost-sharing apply to different services; the service you receive might just have a copay, or you might be responsible for the deductible and coinsurance.)

Employer-sponsored HMO, POS, and EPO plans tend to have lower deductibles and co-payments compared to PPO plans. But this is generally not the case for plans purchased in the individual market. Those self-purchased plans (obtained through the exchange or directly from an insurer) often have similar cost-sharing, regardless of the type of plan management.

Employer-sponsored PPOs tend to have higher cost-sharing than other types of employer-sponsored coverage. But if you're buying your own health plan, you might find only HMOs and EPOs available in your area. And they might have cost-sharing that's quite high (if you're eligible for cost-sharing reductions and you're buying your own plan, pay particular attention to silver-level plans, as cost-sharing reductions are only available on silver plans).

Out-of-Network

With an HMO or EPO, you're typically not covered for any out-of-network services unless you're in the throes of an emergency.

With a PPO or POS, there is typically coverage for out-of-network care, but the provider is free to balance bill you for the portion that your insurer doesn't cover ​since the provider hasn't signed a contract with your insurer. (With a POS, you'll need a referral from your PCP in order to have any insurance coverage for the out-of-network treatment.)

And although non-grandfathered, non-grandmothered PPOs and POS plans do have to comply with the federal limits on out-of-pocket costs for in-network care, they are free to set whatever out-of-pocket limit they want for out-of-network care. And some plans have no limit on the out-of-pocket costs you'll incur if you go outside the network.

Patients are no longer supposed to receive balance bills for emergency care (other than ground ambulance services), or from out-of-network medical providers who treat them at an in-network hospital. This is due to the federal No Surprises Act, which plays an important role in protecting consumers from out-of-network bills in situations where they essentially had no choice over whether the provider treating them was in-network or out-of-network.

For other situations in which you choose to go outside of the network for your care (and you have a health plan that covers out-of-network care), you may need to pay the provider initially and then get reimbursed by the health plan. This will be up to the provider, and they will let you know how their billing works.

Summary

Most health maintenance organizations (HMOs) require people to select a primary care physician (PCP) with no small role: This person manages all the details of a patient's health care. The primary care physician also provides referrals for any other necessary services or specialist visits within the network. These referrals allow you to see another doctor or a specialist within the health plan network. If you do not have a referral from your primary care physician, your HMO likely will not cover the service.

Some modern HMOs have relaxed these rules and allow members to visit specialists within the plan's network without having a referral from their primary care physician. Regardless of whether a referral is required, HMOs generally require members to get all of their care from providers who are in the plan's network, with out-of-network care covered only in an emergency.

Meanwhile, point-of-service (POS) plans also require referrals from a PCP in order to see a specialist. But unlike an HMO, a POS will generally cover some of the cost of out-of-network care, as long as you have a referral from your PCP.

Referrals are not necessary for a preferred provider organization (PPO) or an exclusive provider organization (EPO). But it's still a good idea to have a primary care physician and to keep them in the loop regarding your medical treatment. They can help you coordinate your care and ensure that you're receiving the treatment you need.

A Word From Verywell

You are well within your rights to appeal a decision from a health insurance company, such as if it has refused to cover a medical service and you don't know why. If you need help navigating the paperwork, you may be able to find it through the national Consumer Assistance Program (CAP). Not every state has a CAP office, so make checking for an office in your state your first move. The program is designed to assist consumers as they deal with insurance questions and problems. CAPs offer this assistance by phone, direct mail, email, or at walk-in locations. Your state's insurance department may also be able to help, depending on the type of health plan you have.