Introduction:
Health Maintenance Organization Plans (HMO Plans for short) are a type of managed care program. The idea behind managed care programs is that maintaining good health will be achieved by preventing disease and providing quality care. By maintaining good health, it is believed that rising health care costs can be controlled.
When HMO plans were first introduced, members paid a fixed, prepaid monthly premium in exchange for care from a network of contracted providers. The contracted provider network includes hospitals, clinics and health care providers that have contracted with the HMO. In this sense, HMOs are the most restrictive form of managed care plans because they restrict procedures, providers, and benefits by requiring members to use these providers and not others.
History:
HMOs were meant to take healthcare in a new direction. They were designed by the government to do away with individual health insurance plans and make affordable health insurance available to everyone. At the time, employers were purchasing individual health insurance plans for their employees, a costly expense that many were beginning to forego.
The Health Maintenance Organization (HMO) Act was signed into law by President Nixon in 1973. Managed care plans were subsidized by the government and new HMO-type systems began to grow, usually organized by businesses and community groups eager to make healthcare available. to its workers and members at costs they could better afford. This subsidy created insurance company deals to entice these companies to buy these new, low-cost, discounted health plans for their employees instead of expensive individual health plans.
Sensing the power of the government behind them and the frantic desire of employers to enroll their employees in these new HMO plans, insurance companies began to pressure doctors to join an HMO. The doctors were told that if they didn’t join, the insurance company would find doctors who would join and effectively take all their patients. Therefore, doctors ended up joining an HMO in order not to lose their patients and, subsequently, their entire practice.
Over time, insurance companies added more and more rules each time the doctor’s contract was renewed. The popularity of HMO Plans meant that most of his patients had HMO plans, so they accepted the new terms. The new terms included seeing more patients, stricter confidentiality agreements and more services that require prior approvals.
Until the 1980s, most members agreed that HMOs were a great health plan. However, by the end of that decade, faced with an increasing number of denied claims, members began to turn sour on HMO Plans.
What led to the increase in denied claims? It was not the result of the claims themselves; it was the result of bad investments by insurance companies.
During the real estate boom, insurance companies thought it would be a good idea to invest in real estate. Unfortunately, when the savings and loan industry crashed along with real estate values, insurance companies began to lose money. These losses resulted in their falling short of covering the claims of their HMO members.
Thus began the practice of denying the claims of HMO Plan members. Insurance companies denied the claims on the grounds that they were too expensive or medically unnecessary. At the time, members and their physicians did not fight these denials and because the insurance company got away with the denied claim process so well, they continued to do so as part of their operating procedure.
However, a new concept has emerged in recent years ~ HMO Act.
Now there are lawyers and law firms dedicated to bringing cases against HMOs. These claims include wrongful death, bad faith, and medical malpractice. This means that an HMO can be sued when a person dies as a result of the HMO denying coverage for necessary medical treatment; for the denial of valid claims; and for medical negligence by one of his doctors.
Additionally, individual states are tightening their governing laws. HMO Plans.
In future articles we will discuss how HMOs work, the types of HMO plans, the cost of plans, and the future of plans.