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Creativity, caution needed when negotiating HMO contracts.

Healthcare organizations that opt to enter into contracts with health maintenance organizations (HMOs) should pursue agreements that offer protection against potential HMO insolvencies. Two recent, highly publicized bankruptcies underscore the importance of understanding laws and regulations governing HMOs, advantages and disadvantages of various payment options, and ways to investigate an HMO's quality and stability before a contract is signed.

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