A Health Maintenance Organization (HMO) is a form of managed care organization that offers complete healthcare services to its members for a set, prepaid price. HMOs strive to deliver cost-effective and coordinated healthcare by forming a network of providers that includes doctors, hospitals, and specialists. HMOs often require members to select a primary care physician (PCP) from within the network who will serve as their primary point of contact for all healthcare needs. The PCP organizes and maintains the member's healthcare, including referrals to specialists as needed. HMOs often prioritize preventative care and limit out-of-network treatments, necessitating prior authorization for non-emergency operations or consultation.
Example
As an employee, you must pick a primary care physician from the HMO's network. Assume you've decided to make Dr. Smith your primary care physician. Whenever you require medical treatment, you would begin by visiting Dr. Smith. If Dr. Smith thinks that you need to see a specialist, such as a dermatologist or an orthopedic surgeon, he will refer you to an in-network physician within the HMO. Because you are a member of the HMO, you must select a dermatologist from the network of providers. If you go to an out-of-network dermatologist without appropriate authorization, your HMO may not cover the fees, or you may have to pay much more out of pocket
