Which of the following best describes the core characteristics of a Health Maintenance Organization (HMO) plan?

• A. An HMO uses a restricted provider network, requires choosing a primary care physician who acts as a gatekeeper, and requires referrals for specialists; most plans pay only for in-network care except emergencies.
• B. An HMO allows unlimited out-of-network coverage with no gatekeeper.
• C. An HMO has no required referrals and no network restrictions.
• D. An HMO reimburses patients directly for any provider with no network requirement.

Answer: (A)

HMO plans are a managed care model that uses a restricted provider network and a primary care physician who acts as a gatekeeper. You choose a PCP who coordinates your care and must issue referrals to specialists, which helps control costs and ensure coordinated treatment. Because of the gatekeeper and the limited network, most services are covered when obtained from in-network providers, with out-of-network care typically limited to emergencies. This combination is what makes the described option the best fit for an HMO.

Other structures don’t fit an HMO: allowing unlimited out-of-network coverage with no gatekeeper describes a plan like a PPO, not an HMO; having no referrals and no network restrictions points to a more open-fee-for-service type plan; reimbursing any provider with no network requirement aligns with indemnity plans.