Which statement describes Preferred Provider Organization (PPO)?

Which statement describes Preferred Provider Organization (PPO)?

• A. A prepaid plan requiring a PCP.
• B. A system with government financing.
• C. A plan that offers a network of providers with lower in-network costs and allows out-of-network access at higher costs.
• D. A plan that reimburses per service performed.

Answer: (C)

Preferred Provider Organization describes a health plan that contracts with a wide network of providers to offer discounted rates for members who stay in-network. You still have the option to see providers outside the network, but you’ll pay higher out-of-pocket costs and often face less favorable reimbursement. This mix of in-network savings and out-of-network flexibility is what characterizes a PPO. In other options, one describes a plan that requires a primary care physician and gatekeeping (an HMO-like model), another refers to government-financed programs, and another describes a pure fee-for-service reimbursement structure.

Preferred Provider Organization describes a health plan that contracts with a wide network of providers to offer discounted rates for members who stay in-network. You still have the option to see providers outside the network, but you’ll pay higher out-of-pocket costs and often face less favorable reimbursement. This mix of in-network savings and out-of-network flexibility is what characterizes a PPO. In other options, one describes a plan that requires a primary care physician and gatekeeping (an HMO-like model), another refers to government-financed programs, and another describes a pure fee-for-service reimbursement structure.