What are the advantages of HMOs?
Typically, HMOs have fewer out-of-pocket costs for the enrollee, including smaller co-payments and deductibles. HMOs also provide preventive care and may cover prescription drugs. When visiting network providers, claims are filed directly to the HMO. In addition, every HMO licensed in Michigan must have formal procedures to appeal decisions in which you disagree. Further information on formal procedures to appeal decisions is available at http://www.michigan.gov/cis/0,1607,7-154-10555_12902_35510_35694---,00.html.

Are there disadvantages to HMOs?
Yes. An HMO may not provide coverage if you receive health care services from a doctor, hospital or other health care provider outside its network or service area, and you may need a referral to see a specialist. HMOs might not be your best choice if you travel regularly, want to cover dependents that live in another community, or have a specific physician you want to see that is not part of the HMO's provider network. Also, you have no guarantee that doctors and hospitals in your HMO's provider network will stay in the network.

What is a primary care physician (PCP)?
A primary care physician is a contracted physician (general or family practitioner, internist, pediatrician and sometimes obstetrician/gynecologist). HMOs use PCPs to serve as the initial screening, testing, treatment and referral source for members. Generally, the PCP assumes continuing responsibility for the overall course of treatment of the member. PCPs often act as gatekeepers for HMOs, determining if a member's illness requires treatment by specialists, and/or hospital care. A member usually selects a network PCP at time of initial enrollment with an HMO and can change PCPs with prior notification to the HMO.

How do I find out if a provider is in my HMO network?
Generally, at the time of initial enrollment in an HMO a provider directory is provided to a member. In addition, at any time a member may request an HMO to provide its provider directory. As an HMOs provider network is subject to change, contacting the HMO's member services department will be able to provide current provider information. In addition, some HMOs provide current information regarding their provider network through its web site.

What happens if my doctor leaves my HMO's network?
If your primary care physician, or plan physician with whom you are undergoing a course of treatment, leaves the HMO network, you may be allowed to:

• Continue an ongoing course of treatment for 90 days.
• Continue postpartum care directly related to a pregnancy if the member is in the second or third trimester of pregnancy at the time of the physician's termination.
• Continue treatment, if the patient is determined to be terminally ill prior to the physician's termination through the remainder of the patient's life for care directly related to the treatment of the terminal illness.

Am I eligible to purchase coverage from an HMO?
If you wish to purchase health care coverage from an HMO, it's important to remember that each HMO has a specific territory or "service area," where it may sell its contracts and its own eligibility requirements. In Michigan, service areas are generally divided along county lines.

Eligibility to join an HMO may depend on certain factors

• Where you live
• Your employer or association
• Open enrollment requirements

For an up-to-date list of HMOs and their service areas, please contact the Office of Financial and Insurance Regulation toll free at 1-877-999-6442 or visit our web site at: http://www.michigan.gov/cis/1,1607,7-154-10555_13222_13224-35886--,00.html

When is open enrollment for HMOs?
Michigan law does not require every HMO to offer open enrollment. However, HMOs that issue individual policies are required to annually hold an open enrollment period for not less than 30 days for eligible Michigan residents. You are not considered eligible for enrollment during the HMO's open enrollment period if you are eligible for Medicare, Medicaid or continuation or conversion of a group policy. This rule does not apply to HIPPA eligible individuals.

Is coverage Immediate?
No. Contact the HMO to find out when coverage starts.

If I apply to enroll with an HMO during its open enrollment period is the HMO required to accept my application?
No. During an HMO's annual open enrollment period the number of new applications an HMO accepts is limited.

What is the service area for an HMO?
A service area for an HMO is an area (based on full or partial counties) where health services are generally available and readily accessible to members and where an HMO may market its products.

What happens if I move outside of the HMO's service area?
Your coverage may continue, or it may be terminated. Contact your HMO to determine if your move outside of its service area affects your coverage.

What specific services must an HMO cover?
Every HMO must provide coverage for basic health services, which includes:

• Physician services including consultant and referral services by a physician, but not including psychiatric services
• Ambulatory services
• Inpatient hospital services, other than those for the treatment of mental illness
• Emergency health services
• Limited intermediate and outpatient care for substance abuse
• Diagnostic laboratory and diagnostic and therapeutic radiological services
• Home health services
• Preventive health services

Other mandatory covered services include:

• Prosthetic devices to maintain or replace body parts of an individual who has undergone a mastectomy
• Mental health services provided by a mental health care provider operated by or under contract with the Michigan Department of Community Health or county community mental health board
• Hospice care
• Breast cancer diagnostic services, outpatient treatment services, rehabilitative services and breast cancer screening mammography
• Antineoplastic therapy (chemotherapy for cancer treatment) and cost of its administration
• Program to prevent the onset of clinical diabetes
• Off-label use of a federal food and drug administration (FDA) approved drug (only applies if you have pharmacy coverage through the HMO).

Remember, even though HMOs provide all the basic and mandatory health services listed above, medical necessity is a very important part of determining coverage. You may not be covered for a health service or treatment if the HMO determines the procedure is not medically necessary (see below)!

What services are not covered under an HMO?
HMOs must cover any basic and mandatory health services that are medically necessary. If the HMO determines a service you want is not medically necessary, payment for that service may be denied. An HMO usually excludes procedures it considers to be experimental, but in some situations coverage may be provided. HMO contract language must be clear and name exclusions specifically.

My HMO contract will not cover a procedure my doctor recommended because it isn't considered "medically necessary." Is this customary?
Many HMOs exclude coverage for treatment that is not medically necessary. Medical necessity is a matter of judgment and your HMO contract may not agree with your doctor's judgment of what treatment is medically necessary.

What if I need a service that is not available through my HMO's provider network?
An HMO shall ensure that members obtain covered benefits. An HMO must permit you to go outside its network for any basic or covered service it cannot provide through its provider network. If you can only receive a basic or covered service through an out-of-network provider you will not be required to pay any more than if covered benefit were obtained from a participating provider. Prior approval from your HMO may be required to obtain coverage for services provided through an out-of-network provider.

If I have health care coverage through an HMO, do I need a referral to see a specialist?
Maybe. In many cases, your primary care physician must refer you to a specialist within the network in order for you to be covered. However, women cannot be required to get a referral in order to see a plan obstetrician-gynecologist for annual well-woman examinations and routine obstetrical and gynecologic services. In addition, no referral is required to see a plan pediatrician for general pediatric care services. Some HMOs allow direct access to a network specialist without obtaining a referral.

What should I do if I need to see a specialist outside of my HMO's network?
In most circumstances you must obtain your HMO's prior approval to obtain coverage for health services provided by a non-contracted specialist. Some HMOs may cover health services provided by a non-contracted specialist. Always review your HMO's certificate of coverage and discuss your needs to see a non-contracted specialist with your HMO prior to obtaining services.

Am I required to use in-network hospitals in an emergency?
No. You are not required to use the HMO's network hospitals, providers or facilities in the case of a medical emergency. However, if your HMO determines your condition was not an emergency, it could refuse to pay the emergency room charges.

An HMO is required to provide coverage for medically necessary emergency health care services provided to an enrollee for the sudden onset of a medical condition that includes signs and symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in the following:

• Serious jeopardy to the individual's health
• Serious impairment to bodily functions
• Serious dysfunction of any bodily organ or part.

An HMO cannot require a physician to transfer a patient before the physician determines that the enrollee has reached the point of stabilization. An HMO cannot deny payment for emergency health services up to the point of stabilization provided to a patient because of either of the following:

• The final diagnosis
• The HMO did not give prior authorization before emergency health care services were provided

What if I need emergency care and I am outside of the HMO's service area?HMOs are required to provide coverage for medically necessary emergency care outside of its service area. If you receive emergency care outside of the HMO's service area you should contact your HMO within 48 hours.

Are prescription drugs covered under my HMO contract?
In Michigan, HMOs are not required to cover prescriptions. However, HMOs that do provide prescription coverage may have a list of drugs it will pay for. This list is called a formulary. Michigan law requires HMOs to follow the formulary guidelines below when they provide coverage for prescription drugs:

• Any formulary must be developed with participation of network physicians, dentists and pharmacists.
• Disclose to health care providers and upon request to enrollees the nature of the formulary restrictions.
• Provide for exceptions from the formulary when a non-formulary alternative is medically necessary and an appropriate alternative.

How much will it cost me for medical services?
You may be required to make a co-payment whenever you use services within the network. If you follow the HMO's rules, billing disputes are strictly between the network provider and the HMO. Under Michigan law, you are "HELD HARMLESS," and you aren't responsible for charges that are greater than the amount paid to the network provider by the HMO.

Co-payments under an HMO contract are required to be a nominal amount. Co-payments shall not be more than 50 percent of the HMO's reimbursement to a network provider for providing the health care service. Co-payments shall not be based on the provider's standard charge for the service.

Once you've made the co-payment, the HMO will pay the balance of the bill directly to the network provider.

What are deductibles and co-payments?
In addition to your monthly premium payments, most HMOs require you to pay some share of the cost for covered health care expenses.

• Deductible: A set amount that you have to pay toward covered expenses before the HMO contract starts to pay.
  
• Co-payment/Co-insurance: A specified dollar amount or percentage of covered expenses, which an HMO requires a covered person to pay toward eligible medical bills.

Important: Deductibles and co-payments are separate items. Services and costs not covered by the HMO contract do not satisfy deductibles or out-of-pocket maximums.

What steps should I take when filing a claim?
If your health care coverage is through an HMO, the HMO pays its network providers directly. As long as you use network providers, you will not have to file claims.

Can a network provider bill me if my HMO has not promptly paid a claim?
If a network provider has a contract with your HMO, the provider is prohibited from seeking payment from you for rendered covered services. The only exception is that network providers are allowed to collect co-payments or deductibles in accordance with your coverage. If you are being billed by a network provider and believe the claim should be paid by your HMO, you may want to contact the HMO's member services department. If you receive health care services from a non-network provider you may be responsible for any unpaid portion of the claim or the full amount.

Does health care coverage through an HMO cover all members of my household?
If you belong to an HMO, and have dependent coverage your HMO shall cover eligible family members (dependents) in accordance with the HMO's eligibility policies. Check with the HMO to determine if your dependents are eligible for coverage.

How do I add a new dependent to my HMO coverage ?
New dependents receive health care coverage at the moment of birth, adoption or marriage. However, you will need to notify your HMO within 31days of the change to have the dependent added to your coverage. You may be required to pay additional premiums.

New additions have the same coverage as the subscriber and current dependents.

If both parents have health care coverage through their employer, which plan covers them and their dependents?
If you and your spouse both work and have health care coverage through your employers, you and your dependents may be covered by both plans.

The HMO must follow Michigan's coordination of benefits (COB) rule to decide which plan is primary, which one is secondary, and how much each of the plans must pay.

How do I know which plan is primary or secondary?
When you are the patient, your employer's health coverage is always primary and your spouse's plan is secondary. When your child is the patient, the plans follow the birthday rule. The spouse with the first birthday in the calendar year is the primary plan. If you are divorced or legally separated, the court decree is followed. If the decree doesn't designate which parent is responsible for the children's health care, the plan that covers the parent with physical custody is the source of primary coverage.

• Primary plan: This is the plan that pays first.
• Secondary plan: After the primary plan has paid its part, the secondary plan pays its appropriate portion.

There are many different possible situations and Michigan's COB rules cover most of them. The Michigan rules should be described in your HMO contract.

Do HMOs have waiting periods for pre-existing conditions?
No. If your health care coverage is provided through your employer HMOs cannot make you wait before covering a pre-existing condition. If you individually purchase your health care coverage through an HMO, it may exclude or limit coverage for a condition for a period not to exceed six months after the effective date of coverage.

Is the underwriting process different for HMOs?
Yes! In a group plan, the HMO cannot reject individual members. If an HMO accepts a group, the entire group must be covered. Under Michigan Law and the federal Health Insurance Portability and Accountability Act (HIPAA), an HMO must continue to renew a group policy once it accepts the group. HMOs may use underwriting to reject an individual applicant, except during open enrollment.

How do I file a complaint/grievance with an HMO?
Each HMO is required by law to have an internal complaint/grievance process available to it members to address problems regarding a health care service. Information regarding the HMO's complaint/grievance process is contained in its member handbook and/or certificate of coverage. You should contact your HMO to begin the internal complaint/grievance process.

Once the HMO receives your written grievance, they must contact you in writing with its final determination within 35 calendar days. The HMO can request up to an additional 10 business days to obtain necessary medical information. The HMO must advise you of your right to an external review with the Office of Financial and Insurance Regulation and provide you with the proper form to request an external review when it advises you of its final determination. You must exhaust the internal grievance process of the HMO before you can request an external review. The Health Care Request for External Review form and instructions can be obtained at http://www.michigan.gov/documents/cis_ofis_fis_0018_25078_7.pdf.

Further information about the internal grievance process and the external review process is available at http://www.michigan.gov/cis/0,1607,7-154-10555_12902_35510_35694---,00.html.

I am a medical provider who has not received payment from a Medicaid HMO for services I provided to one of the HMO's members. How can I file a complaint?
In 2000, the Michigan Legislature enacted MCL 400.111i to allow Medicaid providers to file clean claims with the Commissioner against Medicaid HMOs for timely payment. Ordinarily a clean claim must be paid within 45 days after receipt of the claim by the qualified health plan. A "clean claim" must meet certain criteria set forth in the legislation and must be submitted on form FIS 278 which can be accessed through the website for DLEG's Office of Financial and Insurance Regulation (OFIR). Additional information on clean claims is available at http://www.michigan.gov/cis/0,1607,7-154-10555_12902_35510_36782---,00.html.

Who regulates HMOs?
The Office of Financial and Insurance Regulation (OFIR) regulates HMOs by state law.

Office of Financial and Insurance Regulation
611 W. Ottawa
P.O. Box 30220
Lansing, MI 48909-7720
1-877-999-6442

Additional information regarding HMOs
Links to additional HMO information on the OFIR web site:

OFIR HMO Consumer Guide
HMO Financial Information
HMO Service Areas
HMO Enrollment Information
HMO Accreditation Information
Michigan Medicare Advantage Plus HMOs
Mandatory Health Coverage
HMO Complaint Information
Other HMO Related Information

Links to HMO regulations

Chapter 35 of the Michigan Insurance Code, Public Act 218 of 1956
Patient's Right to Independent Review Act, Public Act 251 of 2000