What is an HMO?

HMO stands for Health Maintenance Organization, and could be compared to a shopping club membership. An HMO member is provided services at low or zero cost, but is only able to select those services from doctors or health facilities that belong to the HMO network. In most cases, you will still be responsible for some of the costs involved, through what is called a copayment where you pay a fixed amount according to the type of procedure.

For care givers, HMO's offer an increased customer base through group membership, but must agree to a fixed cost for each patient or procedure. In general they receive a lower payment per patient but are able to see a higher number of patients to offset the loss. In some circumstances, an HMO may recognize an out-of-network physician, but will require the patient to pay any costs above what the HMO would pay within the network.

Because of the membership qualities of an HMO, it is important that you make sure your preferred care givers are in the network before joining. If they are not, talk with them to find out if they would be interested in joining, and then contact the HMO. If your doctor is aware that you belong to an HMO, they are more willing to fill out the application, knowing that the medical relationship may be on the line.

When joining an HMO, most members are required to select a primary care provider who serves as their major point of medical contact. The provider in turn makes any necessary referrals to specialists or other physicians, acting as a gatekeeper between the patient and complete medical care. The concept is to provide the member with a single person who is knowledgeable of all aspects of the patient's care and able to prevent potentially costly or damaging conflicting care from unrelated medical services.