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There are several different ways of looking at the types of HMO medical plans. In all cases, the standard HMO (health maintenance organization) should be viewed as a provider of medical care instead of an insurance company. This means that providers belonging to the HMO get paid a monthly fee for coverage of a member. Yet this may be differently constructed depending on the way the HMO medical plan operates, and it changes very much if people have an HMO/PPO (preferred provider organization) or an HMO/POS (point of service).
There are a few ways that a standard HMO can operate. It can work with doctors contracted with the HMO who may also contract with other HMOs or with insurance companies to receive payments in lots of different ways. These doctors receive a monthly payment for each client they have that belongs to the HMO. Alternately, some HMOs directly employ doctors, or they work with a group of contracted doctors for specific fees that only see patients belonging to that specific HMO.
It may be relevant to understand these different organizational structures, as they might help determine types of HMO medical that can be most beneficial. The last structure, belonging to companies like Kaiser Permanente, may make it very difficult to have much choice in medical care. HMOs that work with doctors seeing a variety of patients are often thought preferable, though there are big fans of systems like Kaiser too.
In all of these cases, HMO medical plans can be of benefit to those seeking health care because they tend to limit amounts insured people will pay. HMOs typically have lower copayments and no maximum benefit, and provided a person stays in network they may receive almost total coverage of any “allowed care.” Patients must choose a primary care physician (PCP), and this doctor generally makes decisions about when to refer to specialists. Some of these doctors may be paid more when they spend less money on their patients, as an incentive for reducing costs. This bonus may potentially create conflict of interest, though many doctors obviously ignore it in favor of providing the best care for patients.
There are several other plans that bear similarity to HMO medical plans, like the HMO POS. In this type of plan, people still have a primary care physician who makes referrals. The doctor can refer to specialists inside or outside of network, and as long as the PCP makes the referral, the patient pays the same for seeing an in-network or out of network specialist. The insured could also choose to self refer, in which case, he will pay much higher fees to see out of network doctors or use out of network facilities.
The PPO (preferred provider organization) is sometimes called an HMO PPO, but it isn’t structured much like the HMO. Instead of reimbursing doctors monthly for each patient, it pays when service occurs. PPOs do have a network of doctors too, and people save money when they use in-network doctors or preferred providers, but they do have the option to use doctors that have no affiliation with the PPO plan. They will do so at much higher expense and it often makes sense to stick with preferred provider physicians and facilities.
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