View source for Health Maintenance Organization Act of 1973

{{Short description|United States law}}
{{Infobox U.S. legislation
| name = Health Maintenance Organization Act of 1973
| fullname = An Act to amend the Public Health Service Act to provide assistance and encouragement for the establishment and expansion of health maintenance organizations, and for other purposes.
| acronym =
| nickname = Commission on Quality Health Care Act
| enacted by = 93rd
| effective date = December 29, 1973
| public law url = http://www.gpo.gov/fdsys/pkg/STATUTE-87/pdf/STATUTE-87-Pg914.pdf
| cite public law = 93-222
| cite statutes at large = {{usstat|87|914}}
| acts amended = [[Public Health Service Act]] of 1944
| title amended = [[Title 42 of the United States Code|42 U.S.C.: Public Health and Social Welfare]]
| sections created = {{Usc-title-chap|42|6A}} § 300e et seq.
| sections amended =
| leghisturl = http://thomas.loc.gov/cgi-bin/bdquery/z?d093:SN00014:@@@R
| introducedin = Senate
| introducedbill = {{USBill|93|S.|14}}
| introducedby = [[Edward M. Kennedy]] ([[Democratic Party (United States)|D]]-[[Massachusetts|MA]])
| introduceddate = January 4, 1973
| committees = [[United States Senate Committee on Health, Education, Labor, and Pensions|Senate Labor and Public Welfare]], [[United States House Committee on Energy and Commerce|House Interstate and Foreign Commerce]]
| passedbody1 = Senate
| passeddate1 = May 15, 1973
| passedvote1 = 69-25
| passedbody2 = House
| passeddate2 = September 12, 1973
| passedvote2 = 369-40, in lieu of {{USBill|93|H.R.|7974}}
| conferencedate = December 12, 1973
| passedbody3 = House
| passeddate3 = December 18, 1973
| passedvote3 = agreed
| passedbody4 = Senate
| passeddate4 = December 19, 1973
| passedvote4 = 83-1
| signedpresident = [[Richard Nixon]]
| signeddate = December 29, 1973
| amendments = [[Health Maintenance Organization Amendments of 1976]], [http://www.gpo.gov/fdsys/pkg/STATUTE-90/pdf/STATUTE-90-Pg1945.pdf P.L. 94-460], {{usstat|90|1945}}<ref>{{cite journal|author2=Shadle, M.|author3=Polich, C. L.|title=From movement to industry: the growth of HMOs|journal=Health Affairs|year=1988|volume=7|issue=3|pages=197–208|doi=10.1377/hlthaff.7.3.197|pmid=3215617|author=L. R. Gruber|doi-access=}}</ref><br />[[Health Maintenance Organization Amendments of 1978]], [http://www.gpo.gov/fdsys/pkg/STATUTE-92/pdf/STATUTE-92-Pg2131.pdf P.L. 95-559], {{usstat|92|2131}}<br />[[Omnibus Budget Reconciliation Act of 1981]], [http://www.gpo.gov/fdsys/pkg/STATUTE-95/pdf/STATUTE-95-Pg357.pdf P.L. 97-35], {{usstat|95|357}}<br />[[Health Maintenance Organization Amendments of 1988]], [http://www.gpo.gov/fdsys/pkg/STATUTE-102/pdf/STATUTE-102-Pg2578.pdf P.L. 100-517], {{usstat|102|2578}}<br/>[[Health Insurance Portability and Accountability Act]] (HIPAA), [http://www.gpo.gov/fdsys/pkg/STATUTE-110/pdf/STATUTE-110-Pg1936.pdf P.L. 104-191], {{USStat|110|1936}}
| SCOTUS cases =
}}
The '''Health Maintenance Organization Act''' of 1973 (Pub. L. 93-222 codified as 42 U.S.C. §300e) is a United States statute enacted on December 29, 1973.  The Health Maintenance Organization Act, informally known as the '''federal HMO Act''', is a [[federal law]] that provides for a trial federal program to promote and encourage the development of [[health maintenance organization]]s (HMOs).  The federal HMO Act amended the [[Public Health Service Act]], which Congress passed in 1944.  The principal sponsor of the federal HMO Act was [[Edward M. Kennedy|Sen. Edward M. Kennedy]] (MA).
== Principles ==
President [[Richard Nixon]] signed bill S.14 into law on December 29, 1973.<ref>{{cite book|title=Health care politics and policy in America|url=https://archive.org/details/healthcarepoliti0000pate|url-access=registration|year=2006|publisher=M.E. Sharpe|location=Armonk, N.Y.|isbn=0-7656-1478-2|author=Kant Patel|edition=3rd|author2=Mark Rushefsky}}</ref>
It included a mandated Dual Choice under Section 1310 of the Act.<ref>{{cite journal|author2=John M. Manders|title=Legislated Market Access: The Historical and Legislative Evolution of the Dual Choice Mandate in the Federal HMO Act|journal=Journal of Insurance Regulation|date=December 1988|volume=7|issue=2|author=Ellen Thrower|page=191|issn=0736-248X}}</ref>
Health Maintenance Organization (HMO) is a term first conceived of by Dr. [[Paul M. Ellwood, Jr.]]<ref>{{cite journal|title=The Federal HMO Assistance Act: Helping Hand or Hurdle?|journal=American Business Law Journal|date=Fall 1975|volume=13|issue=2|author=Arnold J. Rosoff|page=137|issn=0002-7766|doi=10.1111/j.1744-1714.1975.tb00971.x}}</ref>
The concept for the HMO Act began with discussions Ellwood and his Interstudy group members had with Nixon administration advisors<ref name="Nixon Tapes">{{cite web|last1=Nixon|first1=Richard|title=Transcript of taped conversation between President Richard Nixon and John D. Ehrlichman (1971) that led to the HMO act of 1973|url=https://en.wikisource.org/wiki/Transcript_of_taped_conversation_between_President_Richard_Nixon_and_John_D._Ehrlichman_(1971)_that_led_to_the_HMO_act_of_1973:|website=wikisource.org|publisher=Wikisource|accessdate=30 March 2018|ref=Creative Commons}}</ref> who were looking for a way to curb medical inflation.<ref>{{cite journal|title=Ellwood: HMO seer|journal=Modern Healthcare|date=August 7, 2006|page=40}}</ref> Ellwood's work led to the eventual HMO Act of 1973.<ref>{{cite journal|title=Celebrating three visionaries|journal=Modern Healthcare|date=February 14, 2000|author=Charles S. Lauer|page=29}}</ref>
It provided grants and loans to provide, start, or expand a [[Health Maintenance Organization]] (HMO); removed certain state restrictions for federally qualified HMOs; and required employers with 25 or more employees to offer federally certified HMO options IF they offered traditional health insurance to employees. It did not require employers to offer health insurance.  The Act solidified the term ''HMO'' and gave HMOs greater access to the employer-based market. The Dual Choice provision expired in 1995.
=== Benefits offered to Federally qualified HMOs ===
*Money for development
*Override of specific restrictive State laws
*Mandate offered to specific employers to offer an optional HMO plan as part of their employee benefits package
==== Qualifications of a Federally qualified HMO ====
To become federally qualified, the HMO must meet these requirements:
*Deliver a more comprehensive package of benefits;<ref>{{cite journal|title=The Federal HMO Assistance Act: Helping Hand or Hurdle?|journal=American Business Law Journal|date=Fall 1975|volume=13|issue=2|author=Arnold J. Rosoff|page=137|issn=0002-7766|doi=10.1111/j.1744-1714.1975.tb00971.x}}</ref>
*Be made available to more broadly representative population;
*Be offered on a more equitable basis;
*More participation of consumers;
*All at the same or lower price than traditional forms of insurance coverage
== Effects of the act ==
*Federal Financial Assistance for  developing HMOs—Assisted individual HMOs in obtaining endorsement (referred to as qualification) from the federal government<ref>{{cite journal|author2=Ellen M. Bradburn|title=Theorizing Legitimacy or Legitimating Theory?|journal=The Rise of Neoliberalism and Institutional Analysis|year=2001|pages=129–158|author=David Strang|editor1-first=John L.|editor1-last=Campbell|publisher=Princeton University Press|location=Princeton, NJ|isbn=0-691-07086-5}}</ref>
*Marketing Support through Dual Choice Mandate—Required employers to offer coverage from at least one federally qualified HMO to all employees (dual choice).
=== Problem areas ===
*Definition of "Medical Group"<ref>{{cite journal|title=The Federal HMO Assistance Act: Helping Hand or Hurdle?|journal=American Business Law Journal|date=Fall 1975|volume=13|issue=2|author=Arnold J. Rosoff|page=137|issn=0002-7766|doi=10.1111/j.1744-1714.1975.tb00971.x}}</ref>
*Comprehensive Benefits and Limitations on Copays
*Open Enrollment and Community Rating
*Mandatory "Dual Choice"
*Delay in Implementation
== Amendments to the HMO Act of 1973 ==
* October 8, 1976: [[Health Maintenance Organization Amendments of 1976]], [http://www.gpo.gov/fdsys/pkg/STATUTE-90/pdf/STATUTE-90-Pg1945.pdf P.L. 94-460], {{usstat|90|1945}}<ref>{{cite journal|author2=Shadle, M.|author3=Polich, C. L.|title=From movement to industry: the growth of HMOs|journal=Health Affairs|year=1988|volume=7|issue=3|pages=197–208|doi=10.1377/hlthaff.7.3.197|pmid=3215617|author=L. R. Gruber|doi-access=}}</ref>
* November 1, 1978: [[Health Maintenance Organization Amendments of 1978]], [http://www.gpo.gov/fdsys/pkg/STATUTE-92/pdf/STATUTE-92-Pg2131.pdf P.L. 95-559], {{usstat|92|2131}}
* July 10, 1979: [[Joint resolution to amend the Public Health Services Act and related health laws to correct printing and other technical errors]], [http://www.gpo.gov/fdsys/pkg/STATUTE-93/pdf/STATUTE-93-Pg82.pdf P.L. 96-32], {{usstat|93|82}}
* August 13, 1981: [[Omnibus Budget Reconciliation Act of 1981]], [http://www.gpo.gov/fdsys/pkg/STATUTE-95/pdf/STATUTE-95-Pg357.pdf P.L. 97-35], {{usstat|95|357}}
* October 24, 1988: [[Health Maintenance Organization Amendments of 1988]], [http://www.gpo.gov/fdsys/pkg/STATUTE-102/pdf/STATUTE-102-Pg2578.pdf P.L. 100-517], {{usstat|102|2578}}
* August 21, 1996: [[Health Insurance Portability and Accountability Act]] (HIPAA), [http://www.gpo.gov/fdsys/pkg/STATUTE-110/pdf/STATUTE-110-Pg1936.pdf P.L. 104-191], {{USStat|110|1936}}
== Further reading ==
*{{cite book|title=The law of health care finance and regulation|author1=Hall, Mark A.|author2-link=Mary Anne Bobinski|author2=Bobinski, Mary Anne|author3=Orentlicher, David|date=February 20, 2008|pages=648|publisher=Aspen Publishers|location=New York|isbn=978-0-7355-7299-7|oclc=183928753}}
*{{cite book|title=Essentials of the U.S. health care system|year=2010|publisher=Jones and Bartlett Publishers|location=Sudbury, Mass.|isbn=978-0-7637-6380-0|author=Leiyu Shi|edition=2nd|author2=Douglas A. Singh}}
*{{cite journal|title=The Health Maintenance Organization Act of 1973 (P.L. 93-222) and prepaid group practice plans.|journal=Medical Care|date=January 1975|volume=13|issue=1|pages=1–9|pmid=803289|author=J. L. Dorsey|doi=10.1097/00005650-197501000-00001}}
*{{cite web|title=Statement on Signing the Health Maintenance Organization Act of 1973|url=http://www.presidency.ucsb.edu/ws/?pid=4092|publisher=The American Presidency Project|author=Richard M. Nixon|location=Online by Gerhard Peters and John T. Woolley|date=December 29, 1973|access-date=January 12, 2012|archive-date=February 13, 2015|archive-url=https://web.archive.org/web/20150213203509/http://www.presidency.ucsb.edu/ws/?pid=4092|url-status=dead}}
== Definitions ==
A Health Maintenance Organization (HMO) is a managed care plan that incorporates financing and delivery of an inclusive set of health care services to individuals enrolled in a network.<ref>{{cite book|title=The law of health care finance and regulation|year=c. 2008|publisher=Aspen Publishers|location=New York|isbn=978-0-7355-7299-7 |author=Mark A. Hall|author2=Mary Anne Bobinski|author3=David Orentlicher}}
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== References ==
{{Reflist}}
{{Presidency of Richard Nixon}}
{{DEFAULTSORT:Health Maintenance Organization Act Of 1973}}
[[Category:1973 in American law]]
[[Category:Health maintenance organizations|Act]]
[[Category:United States federal health legislation]]