As we have seen, there are many different forms of MCOs. Under the Federal HMO Act, an entity must have three characteristics to call itself an HMO: 1. An organized system for providing health care or otherwise assuring health care delivery in a geographic area; 2.An agreed-upon set of basic and supplemental health maintenance and treatment services; and 3. A voluntarily enrolled group of people. May & Shaeffer, (1995) in Nurses Mastery of the Managed Care Environment describe several of these forms:

There are four basic models of HMO's: group model, individual group association, network model and staff model. Recent changes in the marketplace have blurred the distinctions among these models, but they help illustrate the structure and incentives in managed care. Currently there are more than 500 HMOs in the United States:

1. Staff model. This form is the most rigid. Physicians are on staff with some sort of salaried arrangement, often with bonuses. Early staff model HMOs also owned their own hospitals. More recently, new staff plans have contracted for hospital beds rather than building new hospitals.
2. Group practice. Group practice HMO use an administrative structure to contract with organized groups of physicians and hospitals to create a plan of care. In some HMOs, the physicians' group continues to have a separate identity rather than operating as employees of the plan. Many of these group practice plans serve only the HMO membership, and have no outside practice. Group forms will include office space identified as the HMO.
3. Networks. This is the fastest growing form of managed care. Networks have a more flexible organizational form. The plan contracts with a variety of groups of physicians and other providers in a network of care with organized referral patterns. Networks typically allow providers to practice outside the HMO with little formal identification.
4. Independent Practice Associations (IPAs). IPAs have the most flexible organizational form. As the name suggests, these plans provide a listing of associated physicians with only a bookkeeping connection to each other. The patient has restricted choice. However, no formal referral network exists. Doctors and patients choose specialist care together. IPA physician lists may change frequently. Although easier to establish, such plans have been much less successful in controlling costs.
5. Preferred Provider Organizations (PPOs) are types of managed care plans that contract with independent providers for negotiated discounted fees-for-services provided to members. Usually, the contract provides significantly better benefits (e.g., prevention services and minimal co-pays and deductibles) for services received from preferred providers, thus encouraging utilization of these providers. Covered persons are generally allowed benefits for nonparticipating provider services, usually on an indemnity basis with significant co-payments. There are currently more than 900 PPOs operating nationwide.
6. Point-of-Service Option Plans (POSs) also known as H= MO-PPO hybrids or open-ended HMOs. POSs provide a set of health care benefits and offer a range of health services; however, the members are given a choice to use either the managed care program and network, or use out-of-plan services. This option is available each time the member seeks care. Members usually pay substantially higher costs in terms of increased premiums, deductibles, and coinsurance if they select a provider outside the panel of participating providers.

Newer forms of managed care include Physician-Hospital Organizations (PHOs) and Integrated Delivery Networks (IDNs).