Entity designed to capture covered lives through the integration of select hospital and physician providers across the entire continuum of care. Capable of accepting global capitation risk for Medicare beneficiaries through a direct contract with HCFA and able to provide 90% of care within the contracted entities. Requires state and/or federal approval similar to HMO licensing requirements. uality – The features of a product or service that are assessed on its ability to satisfy the stated or implied needs of the user, or consumer.

Groups of physicians and/or hospital(s) who organize to coordinate the delivery of a range of health care services to a defined population, or by directly contracting with a self-funded employer group or government program. A PSO may be structured in a variety of forms, including a physician-owned venture, a hospital or hospital system that owns physician practices, or a partnership between physicians and hospitals such as a physician hospital organization (PHO). PSOs are sometimes called provider service networks (PSN).

PSOs are similar to PPOs except that they are operated by a group of physicians and hospitals.