Pre-paid Legal Service - Closed and Open Provider Plans

Closed and Open Provider Plans

Pre-paid legal services, like medical plans, can be delivered by a closed provider system or an open provider system. A closed provider system is one in which a subscriber has one main or central law firm providing services in most or all areas of law. Such systems have their own quality control for themselves and for other referral attorneys that are part of the network, which may consist of a large or quite small number of participating firms. The concept is to limit expenses to the insurer, streamline accountability, and provide a uniform, dependable and simplified system for the subscriber to use. In this type of PPL system, the subscribers have little if any choice in the selection of the lawyers that service them. On the other hand, the subscribers may be more able to rely on the network as a whole and on the service-providing law firm to be dependable and accountable for the quality of service that they provide (depending upon how well established the network really is, and how well it tracks and enforces accountability). Closed systems are closely analogous to health maintenance organizations (HMOs) in the medical insurance field.

An open provider system is one in which a subscriber has a list of participating law firms and independent attorneys to choose from for the different areas of law, and may choose different provider for different specialties and different jurisdictions. It does offer more choice for the subscriber but may be lacking in the dependability and quality control that the closed system can provide. Open systems are similar to medical insurance preferred provider organizations (PPOs).

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