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Preferred Provider Organizations (PPOs)

August 22, 2011

Preferred Provider Organizations (PPOs)

 

Definition

A PPO is a group of doctors and/or hospitals that provides medical service only to a specific group or association. PPO physicians provide medical services to PPO members at discounted rates and may set up utilization control programs to help reduce the cost of medical care. Unlike an HMO, PPO members retain complete freedom of choice with regard to their health-care provider. However, treatment provided by a non-PPO physician is generally covered at a lesser level than treatment provided by a physician within the PPO network.

Prerequisites 

  • You want to manage your health-care costs, and you have access to PPO coverage

Key Strengths

  • Choice of health-care provider not restricted to network physicians
  • Wide range of services and specialties generally available
  • Members not required to consult primary care physician before seeing a specialist
  • Emergency care generally covered regardless of provider
  • Out-of-pocket costs are generally limited

Key Tradeoffs 

  • Less coverage for treatment provided by non-network providers
  • More paperwork and out-of-pocket expenses than HMO coverage
  • Typically must meet specified deductible before coverage begins

Variations from State to State 

  • Generally none, although state laws and regulations may govern some aspects of PPO coverage

How Difficult Is It to Implement? 

  • Simply sign up for PPO coverage if offered by your employer, insurance company, or a group to which you belong
  • Contact your state’s department of insurance for a list of approved providers

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

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