A prepaid health clinic is an organization that delivers basic medical services at a specified location for the members of a group who make regular premium payments in exchange for those services. Basic health services are defined under the law as being restricted to "emergency care, physician care other than hospital inpatient physician services, ambulatory diagnostic treatment and preventive health care services."
Prepaid health clinics are supervised by the Office of Insurance Regulation and are subject to many of the same reporting requirements and rules of conduct applicable to insurers and HMOs.
Prepaid health clinics may not use the word "HMO" or any derivative thereof, or any term such as "insurance, " "surety", "mutual" or "casualty" and should not be confused with an HMO that delivers the full range of services.
(Lesson 12 will discuss the differences between prepaid health clinics and HMOs.)