Health Maintenance Organization (HMO) - A Health Maintenance Organization provides care through a network of physicians and hospitals in particular geographic or service areas. HMOs coordinate the health care service you receive and free you from completing paperwork or being billed for covered services. Your eligibility to enroll in an HMO is determined by where you live or, for some plans, where you work. If you travel or are away from home for extended periods, some HMOs are affiliated with or have arrangements with HMOs in other service areas for non-emergency care (reciprocity). Plans that offer reciprocity discuss it in their brochure.
The HMO provides a comprehensive set of services - as long as you use the doctors and hospitals affiliated with the HMO. HMOs charge a copayment for primary physician and specialist visits and sometimes a copayment for in-hospital care.
Most HMOs ask you to choose a doctor or medical group as your primary care physician (PCP). Your PCP provides your general medical care. In many HMOs, you must get authorization or a "referral" from your PCP to see other providers. The referral is a recommendation by your physician for you to be evaluated and/or treated by a different physician or medical professional. The referral ensures that you see the right provider for the care most appropriate to your condition.
Medical Care from a provider not in the plan's network is not covered unless it's emergency care or your plan has an arrangement with another plan.
Plans Offering a Point-of-Service (POS) Product - A Point-of-Service plan is like having two plans in one - an HMO and a FFS plan. A POS allows you and your family members to choose between using, (1) a network of providers in a designated service area (like an HMO), or (2) out-of-network providers (like a FFS plan). When you use the POS network of providers, you usually pay a copayment for services and do not have to file claims or other paperwork. If you use non-HMO or non-POS providers, you pay a deductible, coinsurance, or the balance of the billed charge. in any case, your out-of-pocket costs are higher and you file your own claims for reimbursement.