What Is An HMO In A Pharmacy?

The abbreviation “HMO” means Health Maintenance Organization. Health Maintenance Organizations have a network of hospitals, doctors, and healthcare providers of their own who have made an agreement to accept payments at a set level for the services that they provide. As a result, the HMO is able to keep its members’ costs down.

When it comes to pharmacies, HMOs are especially relevant. A community pharmacist is able to supply pharmaceutical services to patients who are HMO members on a competitive and cost-effective basis.

The reimbursement that is based on customary and usual fees has proved to be one of the most attractive payment methods not just for pharmacists participating in the scheme, but also to the HMO’s administration.

An HMO’s pharmaceutical components can be monitored, administered, and developed with state pharmaceutical associations playing a vital role, and since the financial risks are shared, pharmacists are encouraged to purchase drug products that they dispense to their HMO patients in a prudent manner.

How Do HMOs Work?

HMOs differ from other kinds of healthcare plan in two significant ways that affect the patient – choice and cost.

As the payment level has already been set, HMOs typically offer their members lower premiums each month when compared to other kinds of insurance plan. Their coinsurance and copays are also typically lower making them considerably more affordable.

Essentially, they’re a good choice for those who generally require nothing more than just basic immunizations, annual check-ups, and simple medical care. It’s important to note, though, that an HMO covers no out-of-network care unless there is a genuine emergency.

HMOs require the patient to choose their PCP (Primary Care Physician) from their local healthcare provider network. As this doctor is the one the patient sees every time they require medical care they take responsibility for coordinating the patient’s additional care as required, for example, by referring the patient to one of the HMO network specialists as necessary.

When an HMO patient requires medication, they can obtain it from one of the HMO’s network of providers i.e. the community pharmacy. Therefore, community pharmacists have a key role to play in helping HMO members to gain access to the drugs they require at a price that they can afford while also working to save the HMO itself money.

The Negative Implications Of HMOs For Community Pharmacists

While community pharmacists that supply their services to HMO members can benefit from these insurance plans, those who do not can experience negative consequences. New HMOs are arising all the time, and pharmacists often find out about new ones from one of their patients who inform them they can no longer use their pharmacy to fill their prescriptions due to becoming an HMO member.

Since many employers now offer HMO plans to their workforces, the impact in certain areas where pharmacists primarily service patients from one major local employer can be severe, with up to 50% of the pharmacy’s patient base being lost to health maintenance organization plans.

Should you be an independent pharmacy, starting your own independent pharmacy, or act as a pharmacy delivery service, speak to RxMile to see how we can help you combine telehealth and medication delivery to give patients the best possible healthcare.