In a staff-based HMO, which statement best describes how physicians are compensated?

• A. Independent contractors
• B. Employees
• C. Volunteers
• D. Outsourced consultants

Answer: (B)

In a staff-based HMO, physicians are employees of the organization. This means the HMO directly hires and pays the doctors a salary (often with benefits and possibly incentive pay tied to performance or utilization), rather than doctors operating as separate contractors, volunteers, or external consultants. The salary arrangement gives the HMO greater control over scheduling, practice patterns, and care standards to support coordinated, cost-conscious care. That direct employer relationship is what sets staff-based HMOs apart from other models where physicians might be independent contractors or act as outside consultants.