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.
Passed the House on September 12, 1973 (369-40, in lieu of H.R. 7974)
Reported by the joint conference committee on December 12, 1973; agreed to by the House on December 18, 1973 (agreed) and by the Senate on December 19, 1973 (83-1)
Signed into law by President Richard Nixon on December 29, 1973
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 organizations (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 Sen. Edward M. Kennedy (MA).
President Richard Nixon signed bill S.14 into law on December 29, 1973.[2]
It included a mandated Dual Choice under Section 1310 of the Act.[3]
Health Maintenance Organization (HMO) is a term first conceived of by Dr. Paul M. Ellwood, Jr.[4]
The concept for the HMO Act began with discussions Ellwood and his Interstudy group members had with Nixon administration advisors[5] who were looking for a way to curb medical inflation.[6] Ellwood's work led to the eventual HMO Act of 1973.[7]
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.
Federal Financial Assistance for developing HMOs—Assisted individual HMOs in obtaining endorsement (referred to as qualification) from the federal government[9]
Marketing Support through Dual Choice Mandate—Required employers to offer coverage from at least one federally qualified HMO to all employees (dual choice).
Leiyu Shi; Douglas A. Singh (2010). Essentials of the U.S. health care system (2nd ed.). Sudbury, Mass.: Jones and Bartlett Publishers. ISBN978-0-7637-6380-0.
J. L. Dorsey (January 1975). "The Health Maintenance Organization Act of 1973 (P.L. 93-222) and prepaid group practice plans". Medical Care. 13 (1): 1–9. doi:10.1097/00005650-197501000-00001. PMID803289.
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.[12]
^L. R. Gruber; Shadle, M.; Polich, C. L. (1988). "From movement to industry: the growth of HMOs". Health Affairs. 7 (3): 197–208. doi:10.1377/hlthaff.7.3.197. PMID3215617.
^Ellen Thrower; John M. Manders (December 1988). "Legislated Market Access: The Historical and Legislative Evolution of the Dual Choice Mandate in the Federal HMO Act". Journal of Insurance Regulation. 7 (2): 191. ISSN0736-248X.
^David Strang; Ellen M. Bradburn (2001). Campbell, John L. (ed.). "Theorizing Legitimacy or Legitimating Theory?". The Rise of Neoliberalism and Institutional Analysis. Princeton, NJ: Princeton University Press: 129–158. ISBN0-691-07086-5.
^L. R. Gruber; Shadle, M.; Polich, C. L. (1988). "From movement to industry: the growth of HMOs". Health Affairs. 7 (3): 197–208. doi:10.1377/hlthaff.7.3.197. PMID3215617.
^Mark A. Hall; Mary Anne Bobinski; David Orentlicher (c. 2008). The law of health care finance and regulation. New York: Aspen Publishers. ISBN978-0-7355-7299-7.