What does a 'Closed panel' indicate in relation to HMOs?

A 'Closed panel' indicates that HMO physicians are salaried employees at HMO facilities. This means that the health maintenance organization (HMO) has a specific network of healthcare providers who are employed directly by the HMO or who have contracted to provide services exclusively within that network. Physicians in a closed panel typically operate under a model where they are not allowed to see patients outside of the HMO’s network, which promotes cost-control and coordinated care.

This structure generally leads to lower healthcare costs for both the HMO and its members, as all services are managed within the system. Since the HMO provides compensation directly to its employed physicians, it can ensure adherence to specific protocols and guidelines, contributing to a more streamlined process for patient care and billing. In contrast, having independent physicians or multiple hospitals without a defined relationship does not align with the closed panel concept.