Information on Health Maintenance Organizations (HMOs)

Part 2, Chapter 7: Managed-Care Plans Page 2

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Health Maintenance Organizations (HMOs)

A Health Maintenance Organization may provide medical services in one central building, or such services may be provided through a network of individual doctors, hospitals, and testing centers, with offices scattered over a large geographic area. However, regardless of the particular structure, all of the providers in an HMO generally follow the same network rules.

HMOs may offer some significant advantages to consumers. First, in many cases HMOs may be less expensive than traditional health plans. Second, since there are usually no deductibles for HMO participants, out-of-pocket costs may be far lower. Third, HMO participants are not generally required to file claim forms or to wait for reimbursement. Fourth, since all providers in an HMO network generally follow the same network rules, there is usually no need to be concerned about the possibility that a provider's charge will be considered to be above the UCR (Usual and Customary Rate). Fifth, HMOs often provide coverage for preventive services, including vaccinations, annual physicals, and routine screening tests (See Table 14).

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