CPB Certified Professional Biller Certification Practice Exam

What type of organization is an HMO?

1. Insurance Company

2. Health Maintenance Organization

3. Hospital Management Organization

4. Health Operations Management

The correct answer is: Health Maintenance Organization

An HMO, or Health Maintenance Organization, is a type of managed care organization that provides health insurance coverage for a specific group of people. It focuses on preventive care and wellness to maintain the health of its members while aiming to reduce healthcare costs. Members typically choose a primary care physician within the HMO network, who coordinates their healthcare and provides referrals to specialists when needed. This structure emphasizes a network of contracted healthcare providers to deliver a variety of services, including routine check-ups, hospital care, and specialist visits, often at a lower cost to the patient as long as they stay within the network. The HMO model is designed to promote efficiency and reduced healthcare expenses through preventive care, making it a significant player in the healthcare system. Other options listed are not accurate representations of the HMO. An insurance company generally refers to any entity that provides various types of insurance products, but it doesn't specify a managed care aspect like the HMO does. A hospital management organization is not a recognized model similar to HMO and mainly involves the administration and operation of hospitals. Health operations management tends to focus more broadly on the management practices within healthcare facilities rather than the specific insurance structure and patient care coordination offered by an HMO.