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How an HMO Plan Works
HMO plans offer simple access to care and predictable copayments, but only network providers can be used.
HMO stands for Health Maintenance Organization. Each member has a "home" medical group and a chosen Primary Care Physician who coordinates care.
Except for emergencies, plan members must coordinate care through their primary care doctor. Some plans offer self-referral at a higher copayment for specialist consultations only (not medical services). All care must be authorized through the medical group.
Here are some key features of how these plans work:
Deductibles
Few HMOs have general deductibles for medical services.
If a plan deductible exists, this amount must be paid out-of-pocket before services are paid by the plan.
Copayments
HMOs require applicable copayments for services at the time the services are provided.
Copayments are flat dollar amounts based on the type of service provided. Lab work and diagnostic testing often have no copayments.Authorizations
HMOs require authorization for most services, through the primary care provider.
Emergency care is the exception, but the primary care physician must be notified as soon as possible. Also, some plans allow self-referral to specialists within the medical group for consultation only. Lab work and other care must be coordinated through the primary care physician.
Claims
Provider fees for HMO services are paid directly by the carrier to the provider.
Some situations will result in the HMO member receiving a bill from the provider - such as emergency services. If not already adjusted to the plan copayment level, these should be forwarded to the HMO carrier for payment.
Coordination of Care
The primary care physician will make referrals to specialists within the medical group, and authorize hospital care and care at other facilities.
Note: physicians may inadvertently refer you to non-network facilities for tests, etc. Be sure to check with the facility staff to verify they are a network provider before receiving care.
Prescription Coverage
Most HMOs offer full prescription drug coverage, including generic and brand-name drugs.
Copayments are tiered by category of drug, and many plans now include a brand-name drug deductible.