What is a Health Maintenance Organization (HMO)?

• A. A plan that allows members to see specialists without referrals and go out-of-network at higher cost.
• B. A plan that requires members to use in-network providers but usually does not need referrals.
• C. A plan that has no network restrictions and the member can choose any provider.
• D. A plan that requires members to use network providers and get referrals.

Answer: (D)

HMOs are a type of managed care plan that emphasizes coordinated, cost-controlled care through a fixed network of providers and a primary care physician gatekeeper. In this setup, you choose a primary care physician who coordinates your care and must approve referrals to specialists or other services. Coverage is typically limited to in-network providers, with out-of-network care usually not covered except in emergencies. This structure helps control costs and ensure coordinated care, but it means you’re generally restricted to the HMO’s network and referral process.

That’s why a description that specifies using network providers and needing referrals best fits an HMO. Plans that allow seeing non-network providers or that don’t require referrals align more with other types of plans, like PPOs.