Glossary

preferred provider organization (PPO)

A health care delivery system through which a number of providers contract to serve health plan enrollees on a fee-for-service basis at discounted fees. Providers agree to PPO discounts in the hope of gaining more patients. Patients may use any provider without a referral, in network or out, but have a financial incentive — for example, lower coinsurance payments — to use doctors on the preferred list.