What is a characteristic of HMO plans compared to PPO plans?

HMO (Health Maintenance Organization) plans are characterized by a requirement for members to obtain referrals from a primary care physician (PCP) before seeing a specialist. This structure encourages coordinated care and typically leads to lower overall healthcare costs. The use of a primary care doctor as a gatekeeper helps manage and oversee the patient's healthcare, ensuring that specialists are only consulted when necessary.

In contrast, PPO (Preferred Provider Organization) plans offer more flexibility, allowing members to see any healthcare provider without needing a referral, including out-of-network specialists, although they may incur higher out-of-pocket costs for those services. This fundamental difference in the referral requirement is a key aspect that distinguishes HMO plans from PPO plans.