HMOs offer predictable cost-sharing and administrative simplicity for patients, along with fairly restrictive rules that dictate the specific providers a patient may see. Participants are entitled to doctor visits, preventive care, and medical treatment from providers who are in the HMO's network. In addition to the monthly premium (which may be shared by the employer and employee), participants are required to pay a small fee at the time of service called a co-pay, (often in the range of $10 to $40). The remaining service charge is thereafter covered 100% by the HMO. Most HMOs use capitation arrangements to reimburse physicians, some of which also require patients to select a "primary care physician" (PCP) who can refer patients to specialists within the HMO's network. Frequently, individuals are not reimbursed by HMOs for medical care that is not directly referred by network physicians; (some exceptions include emergency services or preventive gynecological exams.) HMOs may also require prior authorization for elective care or referrals.
