In the world of healthcare, there are lots of options available for coverage, depending on your situation. One common type of coverage is managed care, which has several other sub-types of care coverage under its umbrella. A Health Maintenance Organization is one of them.
What Is A Health Maintenance Organization?
Where a managed care coverage situation is an overall term for a network of physicians, providers and healthcare organizations that work together or are contracted to provide care, a Health Maintenance Organization (HMO) gets even more specific. HMOs also involve a network of providers or contractors with pre-negotiated payment rates and contracts. But they save the patient money by establishing a specific, in-network coverage plan and only allowing the patient to go out-of-network for care in certain situations, like emergencies.
In an HMO, patients work primarily with a single primary care provider (PCP), and where the patient lives or works is often a determining factor for their coverage options. This provider addresses all patient concerns or health issues before anyone else can. If the provider cannot solve the patient’s problem, only then will they refer the patient to another physician or specialist. This model, while it may seem constricting to some who want the freedom to go out-of-network if they want, saves both the patient and the HMO money because the patient’s main point of contact is their PCP. The PCP acts as a sort of first destination for care, determining what is needed and giving the patient in-network options to choose from if extra care is needed. The PCP will also generally focus on integrated care options and on wellness and prevention so the patient doesn’t have to go anywhere else for care.
HMOs have become much more common recently as a result of legislation from the Affordable Care Act (ACA). Medicaid often enrolls patients in Managed Care scenarios, and since HMOs are one type of managed care, Medicaid patients may find that this is the type of coverage they receive. An HMO is also different from another form of managed care, a Preferred Provider Organization (PPO), in that it generally doesn’t allow most out-of-network care (thus lowering costs), while a PPO will (with higher costs).
Out-of-Network Care and Exceptions
Worthy of note is the fact that there are certain circumstances in which patients can go out-of-network to receive care, depending on the rules of the HMO. Common examples of this include trips to the emergency room, out-of-area urgent care facilities and out-of-area dialysis. Additionally, women who want to see a particular OB/GYN for routine checkups don’t need a referral from their PCPs.
If patients do go outside the HMO for care in situations other than these, they will likely end up having to pay the full cost of the care they’ve received. On the other hand, if patients stay with the HMO, costs will be much lower because of the in-network, pre-negotiated cost differences. In an HMO, it is the PCP’s responsibility to coordinate care, so assuming that the patient is fine with being cared for only by specific providers, this can be a great way for providers and patients to be more financially sound.
That being said, an HMO will have specific regulations of what is covered and not covered by patient health care plans. So if the patient thinks one treatment option is better than another, they will have to consult with their PCP to decide on a strategy for care.
HMOs and other coverage scenarios are becoming more common as Americans seek out better healthcare solutions. It’s becoming increasingly valuable to healthcare organizations to know how these systems work and how to navigate them, such that they can know how to better manage their revenue and save money. Such topics are the area in which we at DECO excel. If your healthcare organization is in need of answers to its questions about coverage and managing finances, contact us today!