Which statement best describes the characteristic of an HMO?

Which statement best describes the characteristic of an HMO?

• A. It operates on a fee-for-service basis without service area.
• B. It provides a prepaid comprehensive care plan within a service area.
• C. It covers only dental services.
• D. No network of providers is required.

Answer: (B)

HMOs provide prepaid, comprehensive medical care through a network of providers within a defined service area. Members pay a fixed premium (often with small copays) and typically must choose a primary care physician who coordinates all care. Services outside the network are usually not covered, except in emergencies. This combination of prepaid, comprehensive coverage inside a service area with a network best describes an HMO. The other descriptions don’t fit: fee-for-service without a service area describes a different payment model that bills per service and isn’t restricted to a network; a plan that covers only dental services is a dental-focused option; and a plan with no network contradicts the networked, coordinated approach HMOs use.

HMOs provide prepaid, comprehensive medical care through a network of providers within a defined service area. Members pay a fixed premium (often with small copays) and typically must choose a primary care physician who coordinates all care. Services outside the network are usually not covered, except in emergencies. This combination of prepaid, comprehensive coverage inside a service area with a network best describes an HMO. The other descriptions don’t fit: fee-for-service without a service area describes a different payment model that bills per service and isn’t restricted to a network; a plan that covers only dental services is a dental-focused option; and a plan with no network contradicts the networked, coordinated approach HMOs use.