HMOs (Health Maintenance Organizations)

A health maintenance organization (HMO) is an organization that arranges or provides managed care for health insurance, self-funded health care benefit plans, individuals, and other entities. HMOs are prepaid to act as an intermediary with all types of health care providers (e.g., hospitals, doctors, and rehabilitation services). The HMO Act (1973) requires employers who have 25 or more employees to offer HMOs as an option if the employer offers traditional health insurance to its employees. HMOs contract with health care providers, who agree to treat patients following the HMO’s guidelines and restrictions. Health care providers benefit from this arrangement by receiving the HMO’s clients. Emergency care is covered, whether or not the service is received at a contracted hospital or with a contracted health care ...