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Health Maintenance Organization (HMO)
An entity that offers coverage of health services for a fixed, pre-paid premium.
• There are four models:
- Group model—insurance company contracts with medical groups for services
- Network model—insurance company contracts with the network (eg: BHSG) who in turn contracts with individual physicians and facility providers
- Staff model—insurance company owns its own clinics and employs physicians
- Direct contract model—insurance company directly contracts with each individual physician and facility to create a network
• All HMO models must operate under the Federal HMO Act and must have these three characteristics:
- An organized system for providing health care or otherwise assuring health care delivery in a geographic area
- An agreed upon set of basic and supplemental health maintenance and treatment services
- A voluntarily enrolled group of people
• Members must use HMO providers for all health care-related services—paid at 100% with a small co-pay
• Generally no out-of-network benefits provided
• Any services not provided by the HMO must be approved by the HMOs utilization management program
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