What is an Health Maintenance Organization (HMO)?

• A. Requires staying in-network and typically needs PCP referral.
• B. Allows out-of-network care without referral.
• C. Must stay in network but no referral needed.
• D. Is the same as a PPO.

Answer: (A)

An HMO is built around network-based, coordinated care with a gatekeeper primary care physician. You choose a PCP who coordinates all your care, and you typically must stay in-network for coverage. To see a specialist, you usually need a referral from that PCP before the visit. Because of this structure, you’re generally limited to in-network providers, with out-of-network care not covered except in emergencies. That’s why the description of staying in-network and typically needing a PCP referral best fits an HMO. The other options describe features more associated with PPOs or misstate how HMOs work, such as allowing out-of-network care without referrals or being the same as a PPO.