What are Health Maintenance Organizations (HMOs)?

Prepare for the Business of Healthcare and Health Policy Test. Study with multiple choice questions and explanations to ace your exam!

Multiple Choice

What are Health Maintenance Organizations (HMOs)?

HMOs are prepaid, group-managed care plans that contract with a defined network of providers to deliver a full range of services to members. Because care is coordinated through a primary care physician who often acts as a gatekeeper, referrals are typically needed for specialty services. This structure emphasizes preventive, coordinated care and uses fixed payments to providers (capitation) to control costs, rather than paying per visit. Because the network is restricted, members usually receive most care within that network, with limited or no coverage for out-of-network services. The other options describe different payment or access models. A model that charges patients per visit aligns with traditional fee-for-service, which lacks the centralized, prepaid, network-driven approach of an HMO. A fee-for-service plan with no capitation similarly reflects FFS without the cost-control mechanism common to HMOs. An open-panel plan with no network restrictions resembles a PPO or similar model, which allows broader provider choice and less gatekeeping than an HMO.

HMOs are prepaid, group-managed care plans that contract with a defined network of providers to deliver a full range of services to members. Because care is coordinated through a primary care physician who often acts as a gatekeeper, referrals are typically needed for specialty services. This structure emphasizes preventive, coordinated care and uses fixed payments to providers (capitation) to control costs, rather than paying per visit. Because the network is restricted, members usually receive most care within that network, with limited or no coverage for out-of-network services.

The other options describe different payment or access models. A model that charges patients per visit aligns with traditional fee-for-service, which lacks the centralized, prepaid, network-driven approach of an HMO. A fee-for-service plan with no capitation similarly reflects FFS without the cost-control mechanism common to HMOs. An open-panel plan with no network restrictions resembles a PPO or similar model, which allows broader provider choice and less gatekeeping than an HMO.

More practice questions