What is a preferred provider organization (PPO)?
A. A preferred provider organization (PPO) is a network of physicians and/or hospitals that contracts with a health insurer or employer to provide health care to employees at predetermined discounted rates. PPOs offer a broad choice of health care providers. Because of the broader choice of providers, PPOs are more expensive than HMOs. Although there is no requirement for employees to use the PPO providers, there are strong financial reasons to do so. PPOs may have less comprehensive benefits than HMOs, but the benefits usually can meet almost any need. Furthermore, PPO providers usually collect payments directly from insurers.
