Preferred provider organizations (PPOs) are “groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee. Unlike HMOs, PPOs let employees select providers (such as doctors) from a relatively wide list, and see them in their offices, often without gatekeeper doctor approval. The providers agree to provide discounts and submit to certain utilization controls, such as on the number of diagnostic tests they can order.
Definition