The Answer is: What is an HMO?

Ever imagine you might need to become a contestant on “Jeopardy” to pay your healthcare costs? Your answer may be no, but it seems it pays to understand how a health maintenance organization (HMO) works, if you have one.

Recently, a Medicare beneficiary’s daughter was distraught to learn her mom’s insurance rejected a skilled nursing facility (SNF) claim. Her mom suffered a stroke, and after a brief hospital stay, was transferred to a SNF. A few days later, the SNF requested payment for an anticipated stay of about 20 days. At $750 a day — that’s $15,000! The SNF then threatened to discharge the patient for non-payment.

The daughter then later that her mom’s plan is an HMO, which (except for emergencies) requires pre-authorization for services and primary care physician (PCP) referrals to in-network providers only. The family was unaware of these HMO plan rules. The claim was denied because there was no referral by the PCP and the SNF was out-of-network.

Learn how your insurance plan works, otherwise, you really may need to win a round of “Jeopardy” to cover unexpected costs. If asked, “What type of insurance requires pre-authorization and network referrals, answer, “What is an HMO?” Make sure anyone you rely upon in a health crisis also knows.

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