Health Maintenance Organization (HMO) is a type of health care provider that offers “managed care” for a fixed annual payment (capitation fee) which Medicare pays for each covered patient. 

Care received from a Health Maintenance Organization is network-based. 

If you go out of network to receive non-emergency care without prior authorization, the cost of that care would not be covered and would be your responsibility.

In a Medicare Advantage Plan structured as a Health Maintenance Organization (HMO), you will find that you 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 pre-approved. 

Once enrolled in a Health Maintenance Organization, you will be assigned a primary care physician, also known as a gatekeeper. This doctor will oversee your medical care and will generally be required to make a referral if you need to see a specialist.

A primary component of a Health Maintenance Organization’s method of operation is a focus on prevention and wellness. It is far less costly to keep you healthy through preventative measures than to bring you back to health if sickness or disability should occur.

It is estimated that one out of three HMO patients will need to use out-of-network services due to a complicated medical condition. Other than for emergency, urgent care situations, or care pre-approved by your plan, you are generally responsible for the full cost of these services with no maximum out-of-pocket cap on these expenses. In some cases, your plan may agree to pay up to the network-agreed price for the care, but you would still be responsible for paying the balance of the bill.

Another option would be to ask your preferred doctor or specialist to join the network of your HMO. Providers are permitted to belong to more than one network and it may be that your doctor would agree to contract with your HMO and accept that network’s terms, conditions, and payment schedule.

Be sure to inquire if your HMO includes prescription drug coverage. HMOs are not required to offer Medicare prescription drug coverage, but they often do. If you are covered by an HMO, you ARE NOT ELIGIBLE to join a stand-alone Medicare Part D Prescription Drug Plan. In fact, if you enroll in a Medicare Part D Prescription Drug Plan and your Medicare Advantage Plan includes prescription drug coverage, you will automatically be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.

None of us likes to have to change our doctors. But are your physicians all contracted in the plan’s network? This is an important first step in determining which plan might be best for you.

Before making a recommendation, the answer to this question is the first thing we will want to confirm. You will also want to be sure all your medications are on the plan’s formulary. Based on this information, we can make a recommendation that will make dealing with the “managed care” aspect of your Health Maintenance Organization plan simple and painless.

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