Health and Life Insurance

Answer: A - A provider might agree to be part of a preferred provider organization because of the guaranteed payments and the potential increase in patients. As part of a preferred provider organization, a selected group of independent hospitals and medical practitioners agree to provide a range of services for a particular area at a prearranged cost. Charges for medical services are agreed upon and are generally less than the provider would charge non-PPO patients. Providers that are part of a PPO are paid as fee-for-service.

Theory