A selected group of hospitals and doctors in a given area who have joined together to reduce medical costs is:

• A. A Professional Practitioner Group
• B. An HMO
• C. A Health Managed Hospital
• D. A PPO

Answer: (D)

The concept here is a provider network formed to lower costs by negotiating with a group of local doctors and hospitals. A Preferred Provider Organization (PPO) is exactly that: insurers contract with a network of providers to offer services at discounted rates. Patients save money by using in-network providers, but they can also see out-of-network providers if they choose, albeit at higher costs. This balance of cost savings and flexibility fits the description, whereas HMOs typically require strict network use with referrals and less out-of-network coverage, and the other terms aren’t standard descriptions of this arrangement.