Health Maintenance Organization
What Does Health Maintenance Organization Mean?
A health maintenance organization (HMO) is a health service organization that provides medical services to its members through a network of contracted providers. Since the contract directs a consistent flow of patients to the providers, this results in lower premiums. However, HMOs impose certain restrictions on their members. Services outside of the HMO network are available only through a referral from a primary care physician (PCP) or if members choose to pay out of pocket.
Insuranceopedia Explains Health Maintenance Organization
Typically, HMOs require members to select a primary care physician (PCP) who coordinates access to necessary medical services. A PCP will only issue a referral if it aligns with the HMO’s guidelines. However, other combined health insurance products, such as open access or point-of-service plans, may offer more flexibility outside the approved provider network.
Additionally, HMOs often offer preventative services, such as physical exams and immunizations, at no cost to reduce the likelihood of members developing preventable conditions that could later require extensive medical services, ultimately increasing costs for the HMO.
