What is a characteristic of Preferred Provider Organizations (PPOs)?

Preferred Provider Organizations (PPOs) are designed to allow more flexibility in choosing healthcare providers. A key characteristic of PPOs is that they offer discounted fees to patients who use the plan's network of preferred providers. This means that when a member receives care from these preferred providers, they benefit from lower out-of-pocket costs.

While PPOs do allow out-of-network services, choosing providers outside of the network typically results in higher costs for the patient. This aspect differentiates PPOs from other managed care plans, such as Health Maintenance Organizations (HMOs), which usually require members to stay within a specific network for their care. In summary, PPOs provide a structure that incentivizes using in-network providers through discounted fees, making it advantageous for individuals to seek care within the network whenever possible.