Preferred Provider Organization

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Preferred Provider Organization

A health insurance plan in which the policyholder receives a discount from the full price if he/she receives medical services from a participating doctor, hospital, or other medical organization. In many ways, a PPO operates like other insurance policies: the policyholder pays a premium each month and, in exchange, the insurance company pays for the cost of medical care, after a deductible and co-insurance. What distinguishes a PPO from other policies is the fact that a group of doctors or hospitals may negotiate a discounted rate with the insurance company. This provides the policyholder with an incentive to receive care from this group. However, medicals services provided by organizations outside the group are also covered. See also: Health maintenance organization.

Preferred Provider Organization (PPO).

A preferred provider organization (PPO) is a network of doctors and other healthcare providers that offers discounted care to members of a sponsoring organization, usually an employer or union.

You may also arrange private insurance coverage through a PPO.

If you're insured through a PPO, you make a copayment for each visit to a healthcare provider, though certain diagnostic tests may not require copayment.

You typically have the option to go to a doctor or other provider outside the network, but you pay a larger percentage of the cost, called coinsurance, than if you used a network doctor.