Which of the following is a characteristic of a preferred provider organization (PPO)?

• A. Discounted fees for patients
• B. No network restrictions
• C. Mandatory primary care physician referral
• D. Higher premiums only

Answer: (A)

Discounted fees with a network of providers is a hallmark of a PPO. In a PPO, providers agree to lower negotiated rates for members, and the plan passes those savings on when you use in-network doctors and facilities. That makes in-network care less expensive, which is why this option best describes a PPO. You typically can still see out-of-network providers, but at higher out-of-pocket costs, and you don’t usually need a referral to see a specialist. The idea of no network restrictions isn’t accurate because there is a network you get discount benefits from, just with some flexibility to go outside it. The notion of mandatory primary care physician referrals aligns more with an HMO, not a PPO. And while premiums can be higher for PPOs due to the broader freedom and access, describing it as “higher premiums only” misses the key point about discounted in-network fees.