Question

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? a) Fee-for-service

b) Health Maintenance Organization (HMO)
c) Preferred Provider Organization (PPO)
d) Point of Service (POS)

Answer 1

The system where doctors and hospitals contract with an insurer to provide prearranged cost services is known as a Health Maintenance Organization (HMO).

Step-by-step explanation:

Under the system where a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured, the correct choice is (b) Health Maintenance Organization (HMO). In an HMO, medical care providers receive reimbursement based on a fixed amount per patient enrolled, as opposed to the services provided.

In contrast, a fee-for-service system would involve payment according to the specific services rendered by healthcare providers. Preferred Provider Organization (PPO) and Point of Service (POS) plans have different arrangements for service and payment.