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HMOs, PPOs and govenment

How has the relationship between the government and HMOs changed over the past seven years?

How do HMO plans differ from PPO plans?

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The government relation with the HMOs was broaden by the Balanced Budget Act (BBA) of 1997 when it opened Medicare health plan options to enrollees by adding Medicare-contracting HMOs to the Medicare fee for services standard option. Later the BBA was amended to provide the option to the states to contract "on a risk basis with "any public or private organization," including a health maintenance organization [HMO]" (, 1997, para. 3) to provide services for Medicaid. The government contractual relationship with HMOs has been progressively increasing the last five years. A report on the plan enrollment patterns and trends of Medicare Advantage in 2010 stated that 65% of the enrollees in 2010 were in HMO ...

Solution Summary

The solution involves an explanation of how an HMO differs from a PPO plan as well as the change in the relationship that the government had in the last seven years due to the Balance Budget Act of 1997.