Certified Financial Consultant (CFC) Practice Exam

Which health insurance model requires a primary care physician's referral for specialist visits?

1. Preferred Provider Organization (PPO)

2. Health Maintenance Organization (HMO)

3. Exclusive Provider Organization (EPO)

4. Point of Service (POS)

The correct answer is: Health Maintenance Organization (HMO)

The Health Maintenance Organization (HMO) model is designed around the concept of coordinated care. In this structure, individuals typically select a primary care physician (PCP) who serves as the first point of contact for their healthcare needs. One of the hallmark features of HMO plans is the requirement for beneficiaries to obtain a referral from their PCP before seeing a specialist. This system is intended to streamline patient care, ensure that patients are directed to the appropriate specialists for their conditions, and manage healthcare costs more effectively. This emphasis on primary care and referrals helps ensure that healthcare management is centralized, preventing unnecessary visits to specialists and promoting preventive care practices. Moreover, HMO plans often provide lower out-of-pocket costs, incentivizing patients to utilize in-network services and reinforcing the necessity of referrals. In contrast, other models such as Preferred Provider Organizations (PPO) and Exclusive Provider Organizations (EPO) typically allow more flexibility in seeking care directly from specialists without needing a referral. The Point of Service (POS) model combines elements of both HMO and PPO approaches but often still requires referrals like an HMO does, distinguishing it from more flexible models that do not have the same primary care referral requirement.