What is the primary feature of a Preferred Provider Organization (PPO)?

The primary feature of a Preferred Provider Organization (PPO) is the discounted fees that members can access when they use healthcare providers that are part of the network. PPOs operate through agreements with a network of healthcare providers who offer services at reduced rates to the organization's members. This structure encourages members to seek care from network providers, thus benefiting from lower out-of-pocket costs.

PPOs provide flexibility; members can also seek care from out-of-network providers, though they will incur higher costs in doing so. This flexibility in choosing providers, coupled with negotiated discounts, distinguishes PPOs from other plan types that may impose stricter limitations or referral requirements.

While fixed monthly premiums can be a characteristic of many health plans, they do not specifically define the PPO model. Limitations on provider choice and mandatory referrals typically characterize other types of managed care plans, such as Health Maintenance Organizations (HMOs), which require members to seek care from designated providers and often necessitate referrals for specialist care. This reinforces that the hallmark feature of a PPO is its emphasis on discounted fees while maintaining a broader choice of providers.