Types of Health Maintenance Organizations (HMOs) and Managed Care Plans

Staff Model HMO

hires its providers directly and pays

them a salary for providing health care to members. The patient can receive care only at plan Facilities.

Network Model HMO

HMO contracts with various group practices for services to its members. Typically, the providers also see patients who have other types of insurance.

PPO (Preferred Provider Organization)

provides coverage for in-network and out-of-network services to its members, but there is a financial incentive to use in-network services. These plans usually have deductibles and coinsurance or copayments.

EPO (Exclusive Provider Organization)

is similar in structure and operation to a PPO, but in order to be covered its members must receive all their health care services only within the network.

IPA (independent practice association)

work independently in the community but organize formally as a provider association. They are paid from funds collected from subscribers of the health plan minus administrative costs, marketing and sales costs, and other overhead costs.

POS (Point of Service)

plan combines an in-network plan that is an HMO with an additional out-of-network plan. The POS plan functions as a combination of an HMO and a PPO.