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Medicaid uses an HMO plan, where the Department of Health Care Services pays Health Net a monthly premium to offer prepaid basic and supplemental health services to members and eligible dependents.

Click each model to find out more.

Group Model

Two Models of HMO's

Network Model


The Group Model consists of contracts with physicians in a multi-specialty medical group organized as a partnership or professional corporation. The state compensates the medical group directly for contracted services at a negotiated rate and that medical group is responsible for compensating its physicians and contracting with hospitals for care of their patients. One example of a group model is Kaiser Permanente.



The Network Model involves contracts with various healthcare providers, such as physician groups, single physicians and multi-specialty groups. The health plan compensates the primary medical group (PPG) at negotiated rates for services and the PPG is then responsible for compensating its physicians and arranging hospital care for patients.Physicians may operate from individual offices, but if affiliated with a medical group, authorization requests are typically approved by the group. Examples of health plans using the Network Model include Health Net, Blue Shield, Molina, CalOptima, and Aetna.