What Does PPO Mean on Medical Insurance?


A preferred provider organization (PPO) is a type of health or medical insurance. It is a group of physicians, clinics and hospitals who have entered into an agreement to provide health care at a discounted rate.

Organized by Groups

  • PPOs are organized by different groups within the health care service provider field. These groups typically include, but are not limited to, insurance companies, hospitals, doctors, dentists and large employers.


  • PPO participants are paid on a fee-for-service basis. This fee is a predetermined amount paid for a particular service.


  • PPOs offer a wider range of options in service providers than HMOs.

Discounted Rate

  • Services are offered at a discounted rate and the insured may choose the provider they want to use within the network.


  • The PPO does not maintain facilities. The services are provided in the practitioner's facility.

Co-Payments and Deductibles

  • A PPO generally charges co-payments and deductibles to the insured.

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