Preferred provider organization
Meaning & Definition
A Preferred Provider Organization (PPO) is a health insurance plan that offers the members a network of preferred doctors, hospitals, and other healthcare providers. PPOs offer members lower costs when they use in-network providers but may also reimburse for out-of-network care at a higher level.
Importance of Preferred Provider Organization
- Wellness program identification from a network of providers.
- Usually offers lower costs for in-network services.
- May permit individuals to see specialists without a referral.
- Provides flexibility to use out-of-network providers.
- Can be provided under programs to provide health benefits for employees.
- Gives employees greater choice in healthcare services.
Legal Compliance / Applicable Rules & Policies
A PPO is an insurance and health benefit scheme and not an HR and employment benefit scheme. In India, health insurance schemes and insurers are regulated by the Insurance Regulatory and Development Authority of India (IRDAI).
The precise details of the coverage, discounts, exclusions, network structure, claim procedures, and member obligations are determined by the particular insurance policy and by law. Employers providing new health benefits based on a PPO plan need to tell employees what the policy covers.
