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HMO vs EPO: A guide for dental professionals

July 29th, 2022 | 5 min. read

HMO vs EPO: A guide for dental professionals Blog Feature

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There are several different types of dental insurance plans. HMO and EPO plans are so similar, that dental professionals often mix up the two. Unfortunately, when you don’t understand different types of dental insurance plans, you might file their claims incorrectly. This can lead to payment delays from insurance that can cost you.

HMO vs EPO - what’s the difference?

Dental ClaimSupport works to get claims paid for all kinds of dental practices - that accept all different types of insurance plans. Through 10 years of helping dental teams submit their claims, we have seen how insurance plan knowledge is crucial to claim accuracy. 

In this article, we will define and compare HMO (Health Maintenance Organization) plans with EPO (Exclusive Provider Organization) plans. We will always explore the reason behind why these two insurance plans, in particular, are what people are getting confused about. 

We will then explain how a thorough understanding of each type of dental insurance plan can benefit your cash flow.

Let’s dive in.

HMO: Health Maintenance Organization (or DHMO)

HMOs and DHMOs (Dental Health Maintenance Organization) are the same, DHMO being specifically about dental insurance plans while HMO is medical-focused. We are differentiating them to give you a general definition of HMO, then we will get into the dental specifics of a DHMO.

HMOs are insurance plans that cover treatment for a set amount, using only in-network benefits. There is a copay amount that the patient always pays, and the HMO may cover a small amount and the rest is written off by the dentist. 

HMO plans are also known as “closed panel” networks. Closed panel means the patient’s plan offers health benefits through a selected list of dental providers that have contracted with the plan. If you accept HMO (or DHMO) insurance plans as a dentist, you are likely in-network with those types of insurance companies.

When you’re in-network with an insurance company, you have a contract with them that determines your fees. 

But let’s get dental specific. 

Dental Health Maintenance Organization or Capitation (CAP)

Under DHMO, dental patients must be enrolled with or assigned to a specific dentist that is a provider on the DHMO or Capitation plan to have any coverage. 

As the dentist, you have a list of patients at your practice who are enrolled in the DHMO insurance plans along with the monthly insurance Capitation or DHMO payment. Some plans may even send an insurance payment for certain procedures to the practice. 

HMO vs EPO

Encounter claim forms are typically required to be submitted for DHMO/CAP plans, however, some plans will take the standard ADA claim form. 

The office receives the insurance capitation payment for any patient who has that provider selected. Some providers even receive capitation payments for patients that they have never even seen in their practice; just due to the provider being selected. The insurance company must verify the patient is actively enrolled in the practice at each visit. This is done during your insurance verification process.

Typically, you can find this information in the dental insurance website portal.

So what makes EPO different from DHMO?

EPO: Exclusive Provider Organization

As the dentist in network with an EPO plan, you would agree to accept reduced fees or negotiated fees from patients with EPO plans. 

Other than emergencies, patients cannot choose dental providers outside of this network without paying their full dental service fees. EPOs offer a much lower premium for patients, which is the appeal for some.

So why are people getting confused by HMOs vs EPOs?

Well, they do have several similarities. 

EPO plans have a local network of participating dentists that patients can choose from, similar to HMOs. Compared to PPOs, EPO and HMOs have smaller networks of dentists. 

Like HMOs, EPOs sometimes require a PCP (Primary Care Physician), too. Each patient must have a regular physician they see every year regarding other facets of their health. 

Both EPOs and HMOs also cover their patients with out of network dentists in the event of an emergency. Keep in mind that an out of network emergency provider should always ask if the reimbursement is based on the plan fee schedule or usual customary or reasonable fees (depending upon the plan guidelines). 

Plus - there are so many abbreviations in the dental industry, keeping all of them straight can be a challenge.

Why is it important to understand different types of dental insurance plans?

Each type of dental insurance plan will be set up in your practice management software differently. If you do not properly set up the insurance plans in your software, it can affect your claim submission process and cause you to face denials.

Denials create extra claim work for your team, which can take away from other tasks in the dental practice such as patient care, scheduling, and answering the phone. 

Another reason you need to understand the difference between HMO vs EPO is to determine which kinds of insurance plans you wish to be credentialed with. Understanding the different benefits, pros, and cons of each plan can help you decide which to join as a provider - and which credentialing process you want to take on. 

These choices should largely depend on where your dental practice is located and the number of patients you can take on.

Related: In network or out of network: Pros and cons for your dental practice

Ready to take your dental insurance education to the next level?

Keeping up with all of the different types of dental insurance plans can make anyone’s head spin, but as a dental professional - the accuracy of your claims depends on it. You deserve to feel confident in your role and your claim submission when handling difficult topics - like different insurance plans.

Learning which insurance plans your practice should be credentialed with AND how each should be set up in your software for proper claim submission will impact your success as well. And taking the time to understand each type of insurance plan can lead to personal and financial success.

Dental Claims Academy is a great resource for more formal training on dental insurance plans and the dental billing process. To learn more and dive deeper, enroll your team into Dental Claims Academy.

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