As related to health insurance, a PPO is a preferred provider organization, which is a managed care organization of health care providers, including doctors and hospitals, that provide care within that specific group.
Preferred provider organizations may also be identified as participating provider organizations or a preferred provider option.
A PPO works as a subscription medical care system. Membership to such a system provides discounted rates by negotiated fees and work to negotiate disputes between providers and patients.
One of the main features of PPOs is that a pre-requirement is prevalent for non-emergency types of care, including hospital admissions and certain types of surgeries.
It may be difficult to compare and analyze the different types of PPO’s available to patents, but certain states and agencies have worked to compile health insurance ratings and ratings on health care providers so patients can make more informed decisions.
Typically PPOs come with higher costs and are more complex than health maintenance organizations (HMOs). Although PPOs allow patients to see providers outside their network, it is more costly and requires increased paperwork.