Health · Chapter 14 · Managed Care Networks
Preferred Provider Organization (PPO)
Definition
A sponsored network of providers contracting at prearranged discounted fee-for-service prices. PPOs finance but do not deliver care, require no gatekeeper referrals, and — unlike HMOs — cover out-of-network care (at higher coinsurance). Cost-sharing uses coinsurance (a percentage), sometimes plus copays.
In plain English
A discount club for doctors: stay in-network for the deal, wander out and pay more — but you're still covered.
Exam tip
HMO = prepaid + delivers care + gatekeeper + no out-of-network. PPO = fee-for-service + finances only + no referrals + out-of-network covered.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms