Which statement best describes a health maintenance organization (HMO)?

Which statement best describes a health maintenance organization (HMO)?

• A. A network of doctors, hospitals, and other care providers who have agreed to accept a fixed payment for services, lowering costs for members.
• B. An outpatient center providing diagnosis and treatment.
• C. A private practice shared by several providers.
• D. A primary care clinic providing episodic care.

Answer: (A)

HMOs operate as a managed care system that uses a network of providers who have agreed to deliver services for a fixed payment, often on a per-member-per-month basis, to control costs. Members typically choose a primary care physician who coordinates care and directs referrals to in-network specialists, with most services covered when staying within the network. This arrangement lowers costs for members by negotiating rates and emphasizing preventive, coordinated care. The statement accurately captures the essence of an HMO: a network of doctors, hospitals, and other providers who accept a fixed payment for services, lowering costs for members. The other options describe settings or practice structures rather than the cost-control, network-based payment model characteristic of an HMO.

HMOs operate as a managed care system that uses a network of providers who have agreed to deliver services for a fixed payment, often on a per-member-per-month basis, to control costs. Members typically choose a primary care physician who coordinates care and directs referrals to in-network specialists, with most services covered when staying within the network. This arrangement lowers costs for members by negotiating rates and emphasizing preventive, coordinated care. The statement accurately captures the essence of an HMO: a network of doctors, hospitals, and other providers who accept a fixed payment for services, lowering costs for members. The other options describe settings or practice structures rather than the cost-control, network-based payment model characteristic of an HMO.