Health maintenance organizations (HMOs):
A. are based on the traditional fee-for-service system of paying physicians.
B. charge a fixed amount per member, hire many of their own physicians, and provide health services only to members.
C. are also known as preferred provider organizations.
D. are illegal in several states.
The correct answer is B. Health maintenance organizations (HMOs) charge a fixed amount per member, hire many of their own physicians, and provide health services only to members.
To arrive at this answer, we can break down each option and eliminate the incorrect ones:
A. HMOs are not based on the traditional fee-for-service system where physicians are paid separately for each service provided. In an HMO, members pay a fixed amount and receive healthcare services from physicians within the organization.
B. This is the correct answer. HMOs charge a fixed amount per member (usually paid as a monthly premium), contract with their own network of physicians, and provide health services exclusively to their members.
C. Preferred provider organizations (PPOs) are different from HMOs. PPOs offer a network of healthcare providers and members have the flexibility to see providers within and outside the network, although there may be financial incentives to stay within the network.
D. HMOs are not illegal in several states. In fact, HMOs are a common type of managed care organization that operate in many states.
So, the correct answer is B. HMOs charge a fixed amount per member, hire many of their own physicians, and provide health services only to members.