PPO stands for a group that is formed to reduce medical costs. Which option correctly describes it?

• A. A selected group of hospitals and medical practitioners in a given area who have joined together to reduce medical costs.
• B. A nationwide network of auto repair shops.
• C. A type of life insurance policy.
• D. A single hospital providing care.

Answer: (A)

A PPO is a network of healthcare providers who contract with insurers to offer discounted rates for services to plan members. The description that best fits this idea is a selected group of hospitals and medical practitioners in a given area who have joined together to reduce medical costs, because it highlights a regional network formed to negotiate lower prices for care. In a PPO, members typically pay less when they see in-network providers, though they can choose out-of-network providers with higher out-of-pocket costs. The other descriptions describe unrelated concepts: a network of auto repair shops, a life insurance policy, or a single hospital.