HMO Laws
Health Management Organizations (HMOs) are one of the four basic types of managed care organizations. In the United States, HMOs are covered by health care laws regulating the business. These laws provide guidelines for patient rights, as well as general parameters for how health management organizations conduct business.
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HMO Rights
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Originally, HMOs were not-for-profit organizations that tried to provide better care for patients at lower costs. This changed with the HMO Act of 1973, which authorized creation of HMOs on a for-profit basis. The law allowed health management organizations to make contracts with groups of individual physicians known as independent practice organizations.
These groups then make contracts with the individual physicians who in turn work for the HMO. This law drastically changed the HMO, resulting in as much of a third of all HMO funds going toward doctor salaries, instead of medical care. By the late 1990s, 80 percent or more of all HMOs were run on a for-profit basis.
Patient Rights
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The Patient's Bill of Rights was passed by the United States Congress in 1998. It contains provisions that give health management organization members certain rights under the law. Provisions of the law applying to HMO members include the right to accurate, understandable information about the HMO itself, and its professionals.
HMO members have the right to emergency services, the right to confidentiality and to private discussions with providers, as well as the right to review personal medical records. Members may request medical records to accurately reflect circumstances if records are not complete, accurate or relevant. Members also have the right to objective, expedient and fair reviews of any provider complaints.
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ERISA
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Employee Retirement Income Security Act (ERISA) details provisions that pertain to health management organizations. ERISA overrides all state laws that regulate health management organizations.
These law makes it difficult for HMO members to sue health management organizations for fraud, malpractice and wrongful death. In the event that a patient dies or becomes very ill because of a wrongful denial of care, ERISA prevents the patient and his successors from suing the health management organization.
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References
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