HMO

A Health Maintenance Organization is a managed care plan that typically requires members to choose a primary care physician and obtain referrals for specialist care, with coverage limited to in-network providers.

A Health Maintenance Organization is a type of managed care plan that requires members to choose a primary care physician, get referrals for specialist visits, and use in-network providers for all non-emergency care. Out-of-network services are generally not covered at all. For providers, being in an HMO network means you will see a steady stream of patients who are assigned to you or who chose you as their PCP. The trade-off is that HMO fee schedules are often lower than PPO schedules, and there is more administrative oversight. You may need prior authorization for more services, and you may have to follow specific treatment protocols or formulary restrictions. The PCP gatekeeper model in HMOs means primary care physicians have a lot of influence over referral patterns. If you are a specialist, getting credentialed with an HMO is important, but maintaining relationships with the PCPs in the network is equally important because they control the referral flow. HMO credentialing is essentially the same as credentialing with any other managed care plan. You submit your application, your credentials are verified, and the credentialing committee makes a decision. Some HMOs have stricter network adequacy standards, which means they might be more selective about which providers they add in areas where they already have sufficient coverage. From a billing perspective, HMOs often use capitation or subcapitation payment models in addition to fee-for-service. Under capitation, you receive a fixed monthly payment per member assigned to you, regardless of how many times they visit. Understanding the payment model is crucial before you sign a participation agreement.