Health Insurance: What is a Referral?

Doctor giving business card to patient in clinic office
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A referral is a special kind of pre-approval that individual health plan members -- primarily those with HMOs -- must obtain from their chosen primary care physician before seeing a specialist or another doctor within the same network.

Some plans require the referral to be in writing directly from the doctor, while others will accept a phone call from your primary care physician.

In order to make sure that everything is in order regarding seeing a specialist, you should be proactive, and make sure that your insurer has received a referral before you make an appointment with your specialist.

That will you will know that your visit to the specialist will be covered under your health care plan.

Referrals and HMO

Health maintenance organizations, or HMO’s, require an individual to select a primary care physician. The primary care physician is then responsible for managing all of that individual’s health care going forward. The primary care physician becomes responsible for making recommendations as far as courses of treatment, specialist visits, medications, and more. The primary care physician also provides referrals for any other necessary services or specialist visits within the network. These referrals allow you to go see another doctor or a specialist within the health plan’s network.

If you do not have a referral from your primary care physician, or you decide to go to a different doctor outside of your health plan’s network, you will most likely have to pay all or most of the cost for that care, as it will not be covered by the HMO.

An HMO typically only covers visits within the network

Referrals and PPO

Referrals are not necessary in a PPO. A preferred provider organization 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. Unlike a health maintenance organization, in a PPO you do not need to select a primary care physician and you do not need referrals to see other providers in the network.


Insurance payment for services within a designated network varies between HMOs and PPOs.


HMO: With a HMO, the only charges you should face for in-network services are copayments, and other services such as procedures and prescriptions.

PPO: In most PPO networks the only charge you will be responsible for is the copayment. However, some particular PPOs have an annual deductable for services, both in network or out of network.


HMO: In a HMO, you are typically not covered for any out-of-network services.

PPO: In a PPO, if you choose to go outside of the network for your care, you will need to pay the provider initially, and then get reimbursed by the PPO. You also may have to pay an annual deductible and coinsurance.

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