What is Health Maintenance Organization (HMO)?
An Health Maintenance Organization (HMO) is a health plan that is also involved in how your health care is delivered. Managed care refers to health plans coordinating your health care with you and the providers that participate in the health plan. HMOs are the most common type of managed care.
A Medicare HMO is an HMO that has contracted with the federal government under the Medicare Advantage program (formerly called Medicare+ Choice) to provide health benefits to persons eligible for Medicare that choose to enroll in the HMO, instead of receiving their benefits and care through the traditional fee for service Medicare program.
How HMOs Work
HMOs use "networks" of selected doctors, hospitals, clinics, and other health care providers that together provide comprehensive health services to the HMO´s members. An HMO usually requires members to seek routine care from providers in its network. In exchange for a built-in clientele, health care providers participating in an HMO´s network agree to treat the HMO´s members at a contracted rate.
When you join an HMO, one of the first things you´ll do is select a "primary care physician" from a list of doctors in the HMO´s network. Your primary care physician performs a role similar to a traditional family doctor and becomes your point-of-contact for nearly all of your health care needs. With very few exceptions, your primary care physician will oversee all of your medical care and provide referrals to specialists and other providers. This allows HMOs to control costs.
In general, the trade-off with an HMO is reduced choice in exchange for increased affordability. If total freedom of choice in your health care is important to you, an HMO is probably not the best option.
Costs associated with an HMO
In an HMO, you will pay:
Health Maintenance Organizations - HMO Premiums - monthly amounts you pay for coverage. If you belong to an HMO through an employer-sponsored health plan, your premiums will probably be deducted each month from your paycheck. Some employers may pay all or some of the premium costs for you.
Health Maintenance Organizations - HMO Copayments - amounts you pay each time you receive a covered medical service, such as a doctor visit or a prescription drug.
Health Maintenance Organizations - HMO Deductibles - the amount you must pay out of pocket before the HMO will pay for covered health services. Most HMOs do not have deductibles.
Health Maintenance Organizations - HMO Maximum out-of-pocket expenses - the maximum amount you have to pay out of pocket during a certain period of time for covered services.
Your Rights in an HMO
Texas has some of the most comprehensive patient protection laws in the nation.
All HMOs must have an internal appeals procedure to allow members to contest a decision to deny recommended medical treatment, including denials of medications that are not on the HMO´s formulary. After you exhaust your appeal rights within the HMO, you can request an Independent Review Organization (IRO) to review the denial and make a determination. The IRO´s decision is binding on the HMO. An IRO review is not available in all cases and is only available if the HMO decides that the covered service or treatment is not medically necessary. For example, the IRO review is not available if the decision to deny coverage is due to an exclusion in your contract. In addition, not all health plans are subject to the IRO review process.
Filing a complaint
If you have a problem with an HMO, first file a complaint through the HMO´s internal complaint process. If the problem persists, TDI may be able to help. Call our Consumer Help Line.
TDI handles complaints about the quality or availability of HMO medical care and administrative procedures (claims, billing, enrollment, appeals, etc.). A complaint form is available on our website, which you may either print and mail or submit online. You also may obtain complaint forms by calling the Consumer Help Line.
Send your complaint along with copies of any related documentation to department of insurance of the state that you live. For example, the Texas resident can use the following address.
Texas Department of Insurance
HMO Quality Assurance (103-6A)
P.O. Box 149091
Austin, TX 78714-9091
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