American Academy of Professional Coders (AAPC) Practice Exam

Which entity falls under the "Health plan covered entity" category?

1. Private Practices

2. Health Maintenance Organizations (HMO)

3. Urgent Care Facilities

4. Independent Laboratories

The correct answer is: Health Maintenance Organizations (HMO)

The correct response identifies Health Maintenance Organizations (HMO) as a type of entity classified under "Health plan covered entity." HMOs are organizations that provide health insurance coverage to their members through a network of healthcare providers. They are responsible for managing the quality and cost of care while ensuring that their members have access to necessary health services. This classification as a health plan covered entity means that HMOs must comply with regulations established under HIPAA (Health Insurance Portability and Accountability Act) concerning the protection and confidentiality of patient information. Unlike private practices, urgent care facilities, and independent laboratories, which are primarily healthcare providers rather than payors, HMOs directly manage health care finances and deal with claims payments and reimbursement, fitting the definition of a health plan. Understanding the different roles of these entities helps clarify their relationship to health care coverage and the regulations they must follow.