Health Maintenance Organization (HMO)

An entity that accepts a fixed premium or capitation payment for individuals enrolled in the HMO and takes responsibility for delivering or arranging for all of the covered healthcare services for those individuals through a defined group or network of providers. Typically, an HMO requires that a patient be assigned to a primary care provider and that the patient have a referral from the assigned primary care provider before the patient can receive a non-emergency service from a specialist in the network. In contrast, in a Preferred Provider Organization (PPO), a patient can typically obtain most services from specialists in the PPO network without a referral or prior approval.

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