Health Maintenance Organization

A health maintenance organization, or HMO, is a public or private organization that provides comprehensive medical care, based on a prepaid contract agreement. A health maintenance organization can be considered a form of health insurance, designed to deliver a broad range of services for a fixed payment. Once the health maintenance organization contract is signed and payments are secured, a health maintenance organization takes on a legal responsibility for all pre-approved costs associated with pre-approved medical conditions. A health maintenance organization comprises a network of medical care providers, such as doctors, hospitals, laboratories, and other medical treatment entities. In addition, a health maintenance organization designates a Primary Care Physician (PCP), who in turn handles other health related services. Although a health maintenance organization system was developed as a flexible and affordable healthcare financing option, any given health maintenance organization may limit care, even against the advice of network affiliated doctors.