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HMOs ~ Health Maintenance Organizations

Types of HMOs:
(Information below was reposted with the permission of the New England Association of HMOs)

capitation: a method of compensation for health care services under which doctors and other health care providers are paid a fixed monthly fee for a range of services for each HMO member under their care, rather than receiving a specific fee for each service or treatment they perform

co-payment: the portion of a medical expense that is the member's financial responsibility. HMOs generally have fixed low co-payments, usually around $5-$10.

deductible: a common cost-sharing arrangement of traditional indemnity insurers under which a policy holder must pay a set amount toward covered services before the insurer is required to pay claims. Typically, HMO members do not pay deductibles.

enrollment area: the area specified by an HMO in which an individual must reside in order to be eligible for plan coverage

Federally Qualified HMO: an HMO that has met certain standards established by the federal government pertaining to quality of care, financial soundness, member services, and similar criteria

fee-for-service: method of payment under which providers are paid for each service performed

gate keeper: a term sometimes used to refer to HMO primary care physicians or nurse practitioners because of their responsibility for referring members to specialists or other services

Group Practice HMO: an HMO that contracts with medical groups to provide health care to the HMO's members

HMO (Health Maintenance Organization): a health plan that both pays for and provides--or arranges to provide--access to comprehensive medical services, and that is reimbursed for services on a fixed monthly basis

Independent Practice Association (IPA): HMOs that contract with individual physicians in private practice who provide care to HMO members within a private office setting

managed care: a method of delivering and paying for health care through a system of networks of providers. Managed care seeks to ensure the quality and contain the cost of comprehensive medical care. Managed care plans include HMOs, preferred provider organizations, point of service plans, and similar coordinated care networks

Medicare HMO: an HMO that has contracted with the federal government to provide Medicare services to Medicare enrollees

network: the doctors, clinics, health centers, medical group practices, hospitals, and other providers that an HMO or managed care plan employs or contracts with to care for its members

open enrollment period: a one month period during which employees can enroll in or change health plans

opt-out: an option available in some types of managed care networks, such as point-of-service plans, in which members can seek treatment from providers outside the network and pay more to do so

out-of-pocket costs: costs for medical services not covered by an insurer or an HMO. Unlike persons with conventional insurance, HMO members incur minimal out-of-pocket costs

Point of Service (POS): a type of managed care plan in which members may obtain services from providers within the plan's network or go outside of the network for treatment. Members typically pay a portion of the cost of their care when they seek treatment outside of the network, and premiums for a POS are generally higher

Preferred Provider Organization (PPO): a health plan in which a member's health care services are covered if obtained from one of a select group of 'preferred' providers chosen by the plan, or covered with a higher co-pay or deductable if obtained from an unaffiliated provider

primary care: routine health care provided in a doctor's office or health center. Primary care focuses on the prevention and early detection of health problems through regular physicals, blood pressure tests, mamograms and similar procedures.

Primary Care Physician (PCP): a doctor who provides, arranges, authorizes, coordinates, and monitors the care of HMO members. Primary care physicians are usually internists, family practitioners, or pediatricians. Upon joining an HMO, a member chooses such a doctor from an extensive list of network physicians. Members may select a different primary care physician at any time.

provider: a physician or other type of medical professional who provides health care to patients. Medical facilities, such as hospitals and health centers, are also referred to as providers.

referral: the process by which an HMO patient's primary care doctor authorizes treatment from a medical specialist

staff model HMO: an HMO that owns and operates health centers staffed by physicians employed directly by the plan. In general, the health centers offer patients access to a broad range of medical care under one roof, including laboratory, x-ray, vision, and pharmacy services.

service area: the geographical area within which an HMO provides health care for its members

utilization management (or utilization review): a practice in which teams of doctors and other health care professionals regularly review patient treatment histories in order to evaluate the appropriateness of all health care services. The practice helps HMOs ensure their members receive high quality care.

waiting period: common to indemnity insurers, a period of time after enrollment during which policy holders are not covered. HMOs do not impose waiting periods for new members.

A Glossary of Terms: The Language of Managed Care and Organized Health Care Systems. Minnetonka, MN: United Health Care Corporation, 1994.


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