Preferred Provider Organizations (PPOs)

Preferred Provider Organizations are very similar to HMOs in concept.  PPOs are goups of physicians and hospitals that contract with Employers, insurance companies, or TPAs (third party administrations like OneSource) to provide health care services at reduced fees.  Like HMOs, they may be structured as group or individual practices. 

The Primary differences between HMOs and PPOs are:

PPOs DO NOT provide benefits on a PREPAID basis but on a FEE FOR SERVICE basis as services are rendered

Fees are usually subject to a schedule used by all PPO participants

Plan participants do not have to use the PPO physcians or facilities.  They can make a choice each time health care is necessary.  However, PPOs usually have lower deductibles and lower co-payments