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A Preferred Provider Organization, or PPO, is a medical plan that offers the insured the ability to choose their physician from a list of network providers. Unlike a point of service (POS) or health maintenance organization (HMO), a preferred provider organization does not require the insured to select a primary care physician.
Preferred provider organizations offer the same level of services as other managed care plans, including general, preventative, and wellness care.
In a preferred provider organization, the employee has the option to seek medical assistance outside the PPO network of physicians. When going out-of-network, the insured is usually responsible for paying both a deductible and a larger percentage of the medical services rendered or coinsurance payment. For example, if the medical services outside of network were $2,000, and the deductible was $1,000 and the coinsurance level was 30%, the patient would be responsible for $1,000 + $1,000 x 30% or $1,300.
The added flexibility of not choosing a primary care physician, and the ability to go out-of-network, makes the cost of a PPO higher relative to a POS or HMO. |
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