Health Maintenance Organization (HMO)
A managed care plan that provides coverage through a defined network and typically requires members to select a primary care physician and obtain referrals for specialists. HMOs emphasize cost control and care coordination, limiting reimbursement for out-of-network services.
What is a Health Maintenance Organization (HMO)?
A Health Maintenance Organization (HMO) is a type of managed care plan that delivers covered services through a defined network of providers. Members usually choose a primary care physician who oversees their care and provides referrals before they can see specialists.
HMOs are built around coordination and cost control, and they generally do not reimburse care received outside the network except in emergencies. This structure keeps care channeled through the plan's contracted providers.
How does an HMO affect a surgery center?
Because HMOs rely on referrals and tightly managed networks, a patient covered by one typically needs both a referral and prior authorization before a procedure will be paid. Missing either step is a common cause of denial.
For an ambulatory surgery center, being in-network with an HMO and confirming that referral and authorization requirements are met is essential to getting reimbursed. The plan's gatekeeping rules directly shape which patients the center can treat and bill successfully.
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