Health Maintenance Organization (HMO)

A Health Maintenance Organization (HMO) is a type of health care provider that offers “managed care” for a fixed annual payment or (capitation fee) which Medicare pays for each covered patient. Patients are restricted, except in the case of an emergency, to receiving care only from doctors, hospitals, or other healthcare providers that work for or have contracted with the HMO.  These providers are known as the HMO’s network.  Care received outside the HMO’s network of providers is generally not covered unless that treatment isn’t available within the network and is preapproved. Each patient is assigned a primary care physician, also known as a gatekeeper, who oversees the patient’s medical care and who is required to make a referral for the patient to see a specialist. A primary component of an HMO is an emphasis on prevention and wellness.

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