How to identify HMO plans in eligibility responses

For providers, knowing whether a patient is on an HMO plan can mean the difference between a paid claim and a denied one.

HMO plans often require referrals for specialist visits. And most HMO plans only cover in-network providers. If those requirements aren’t met, the claim may be denied, meaning lost revenue for the provider.

In many cases, providers can use eligibility checks before a visit to determine if a patient’s health insurance plan is an HMO. But it’s not guaranteed, and there’s some nuance involved in interpreting the eligibility response.

This guide covers how to identify HMO plans in eligibility responses using Stedi’s JSON eligibility API.

What is an HMO?

A Health Maintenance Organization (HMO) is a type of health insurance plan that generally limits member coverage to providers who have contracts with the payer, known as in-network providers.

HMO members must typically:

• Have a designated primary care provider.

• Get referrals from their primary care provider to see specialists.

• Only use in-network providers.

In most cases, HMO members have no coverage for out-of-network providers, except for emergency care.

HMO plans are common among commercial payers. Many employer-sponsored plans use an HMO structure.

Some Medicare Advantage and Medicaid Managed Care plans are also structured as HMOs.

Comparison with PPO plans
HMOs are often compared to Preferred Provider Organization (PPO) plans, which usually allow members to see specialists without a referral and may cover out-of-network care at a higher cost.

Comparison with EPO plans
Exclusive Provider Organization (EPO) plans also restrict coverage to in-network providers. Like HMOs, EPO plans generally don’t cover out-of-network care except in emergencies.

Unlike HMOs, EPO plans usually don’t require members to choose a primary care provider or obtain referrals for specialist visits.

How HMO indicators show up in eligibility responses

Payers aren’t required to identify HMO plans in eligibility responses. Many do, but there’s no single field in the response that reliably identifies an HMO plan across all payers. Instead, you have to check a few commonly used fields and determine which fields each payer might use.

Stedi’s JSON Eligibility API lets you run eligibility checks using JSON. The examples below use Stedi's JSON eligibility responses and contain benefitsInformation objects. These objects contain most of the benefits information for a patient.

Insurance type code

Start with the response’s insuranceTypeCode field. If the value is HM (HMO) or HN (HMO – Medicare Risk), the plan is an HMO. For example:

{
  "code": "1",
  "coverageLevel": "Individual",
  "insuranceTypeCode": "HM",  // Health Maintenance Organization (HMO)
  ...
}

When present, the insuranceTypeCode field is the most structured and reliable signal for HMO plans. However, it’s not 100% reliable. Some payers may return different values in this field, like C1 (Commercial) – even if the member’s plan is an HMO.

Other places to look

If the insuranceTypeCode field is missing or contains a value other than HM or HN, look for the HMO substring in the following field values:

• planCoverage, which contains the plan name

• benefitsAdditionalInformation.planDescription, which may also contain the plan name

• additionalInformation.description, which contains free-text messages

For example, in the plan name:

{
  "code": "G",
  "coverageLevel": "Individual",
  "planCoverage": "SIGNATUREVALUE HARMONY HMO",  // Plan name indicates it's an HMO.
  ...
}

Some payers return HMO information only in free-text fields:

{
  "code": "C",
  "benefitAmount": "1000",
  "additionalInformation": [
    {
      "description": "Includes services within HMO network" // Free-text indicates an HMO plan
    },
  ],
  ...
}

Run eligibility checks with Stedi

If you’re new to Stedi, you can try out eligibility checks on our Basic plan for free. You get 100 free checks each month along with access to mock requests and responses.

Signup takes less than two minutes. No credit card needed.