Definition of Health Maintenance Organization

Health Maintenance Organization (HMO) is an organization in the United States who agrees to give insurance services to employees on a fixed monthly or annual fee. HMO has doctors and hospitals on the panel who provide medical care services to employees of an organization who are under the contract of HMO. The Health Maintenance Organization Act 1973 required at least 25 employees or more working in an organization whose employer can offer federally certified HMO options to his employees.


Unlike traditional health care insurance, HMO covers their clients with the hospitals and doctors who are attached to the HMO organization with strict conditions and guidelines in exchange for regular clients. HMO is responsible to provide emergency care regardless of doctor or hospital contract status.

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