Question

Concerning PPOs, which is a true statement?

a. The insured may only utilize providers contracted with the insurer
b. PPOs provide all services at one location
c. The insured has a financial incentive to use providers who have agreed to predetermined reimbursements for medical services rendered
d. PPOs are typically not for profit

Answer 1

The correct statement about PPOs is that insured individuals have a financial incentive to use in-network providers. PPOs offer a network with reduced rates, and while out-of-network visits are permitted, they are more costly.

Step-by-step explanation:

Concerning Preferred Provider Organizations (PPOs), the true statement is: c. The insured has a financial incentive to use providers who have agreed to predetermined reimbursements for medical services rendered. PPOs offer a network of selected healthcare providers to their members, and these providers have agreed to charge lower fees. This translates into cost savings for the insurance company and often lower out-of-pocket costs for the insured. Unlike HMOs (Health Maintenance Organizations), PPOs allow patients to visit providers outside of the network, though at a higher cost.

Moreover, PPOs are not necessarily not-for-profit and services are not restricted to one location. They function within a reimbursement system that encourages members to use the network of preferred providers through financial incentives, reducing costs for both the insurance company and the members themselves.