What describes a Preferred Provider Organization (PPO)?

A Preferred Provider Organization (PPO) is best described as a group of doctors and hospitals that have agreed on rates to provide services to members of the health plan. This arrangement allows PPO members the flexibility to choose healthcare providers, often without needing a referral from a primary care physician. Providers in the PPO network have negotiated rates with the organization, which typically results in lower out-of-pocket costs for members when they use these preferred providers.

This structure encourages members to use in-network resources while still offering the flexibility to go outside of the network, potentially at a higher cost. The essence of a PPO is the established relationships and agreements on pricing between healthcare providers and the organization, which ultimately benefits members through accessible and affordable healthcare options. This makes option B the most accurate description of a PPO in comparison to the other choices provided.