A health maintenance organization, or HMO, is a type of managed care plan in which a network of health care providers contract with a health plan to provide services to those covered under the plan. Those covered under the HMO select, or are assigned, a primary care physician (PCP) who coordinates all care.

With an HMO plan, the patient must be referred to a specialist by the primary care physician in order for those services to be covered. A visit to a specialist will not be covered by the HMO if the referral is not made by the PCP. Services provided by healthcare providers who are not part of the HMO network will not be covered, unless the service is not available within the HMO.

The providers under an HMO contract agree to a discounted fee for service. In return, the providers typically receive more patients. Because of the discounted fees, premiums tend to be lower for those who select an HMO plan.