What is a health maintenance organization (HMO)?
A Health Maintenance Organization (HMO) is a type of managed healthcare system. HMOs and their close cousins PPOs share the goal of reducing healthcare costs by focusing on preventive care and implementing utilization management controls. When you join an HMO, you choose a primary care physician who is your first contact for all of your medical care needs. The primary care physician provides you with general medical care and must be consulted before you can see a specialist. With a few exceptions, HMO members must receive their medical treatment from physicians and facilities within the HMO network. The size of the network varies depending on the plan you choose.
Health maintenance organizations (HMOs) provide health care for their members through a network of hospitals and physicians. Comprehensive benefits typically include preventive care, such as physical examinations, well baby care and immunizations, and stop-smoking and weight control programs. The main characteristics of HMOs are as follows. The choice of primary care providers is limited to one physician within a network; however, there is frequently a wide choice for the primary care physician. There is no coverage outside the HMO network of hospitals and physicians. Costs are lower, due to limited choice. Physicians are encouraged to keep patients healthy; accordingly, they often are paid on a per capita basis, regardless of how much care the patient needs. The employer prepays HMO premiums on a fixed, per employee basis. Employees do not have to apply for reimbursement of charges, but they may have small co-payments for medical services.
The biggest benefits of a standard HMO plan are the lower out-of-pocket healthcare expenses, the strong focus on preventative medicine, and nominal co pays that are independent of a deductible. However, more often than not, these features are paired with more limited options as far as freedom to choose specific physicians or hospitals. Unlike a PPO, the selection of a primary care physician (PCP), who will handle the majority of your healthcare needs, is required. With an HMO plan, your insurance claims are submitted for you by the provider. It is important to note that should you decide to receive services out-of-network, an HMO will most likely cover none of the cost. In addition, even in-network providers are not covered for services rendered without being referred by your PCP. In order for the insurance company to cover specialist visits, it is up to the discretion of the PCP to make a referral.
A. Health maintenance organizations (HMOs) provide health care for their members through a network of hospitals and physicians. Comprehensive benefits typically include preventive care, such as physical examinations, well baby care and immunizations, and stop-smoking and weight control programs. The main characteristics of HMOs are as follows. The choice of primary care providers is limited to one physician within a network; however, there is frequently a wide choice for the primary care physician. There is no coverage outside the HMO network of hospitals and physicians. Costs are lower, due to limited choice. Physicians are encouraged to keep patients healthy; accordingly, they often are paid on a per capita basis, regardless of how much care the patient needs. The employer prepays HMO premiums on a fixed, per employee basis. Employees do not have to apply for reimbursement of charges, but they may have small co-payments for medical services.
