Preferred Provider Organization (PPO)

A Preferred Provider Organization (PPO) is a type of managed care organization of doctors, hospitals and other health care providers created by a private insurance company.  In a PPO, Medicare contracts with a third-party administrator to provide Medicare Advantage or Medicare Part C health care benefits. Unlike a Health Maintenance Organization, a Preferred Provider Organization usually does not require a patient to have a primary care physician and the patient is free to go to any doctor or medical facility within the PPO network of contracted providers without a referral. Patients are encouraged to use providers that belong to the plan’s network, however, they may use doctors, hospitals and other health care providers outside the plans network but at a higher cost. Many PPO plans offer prescription drug coverage. PPO plans often come with extra benefits, but you may have to pay for these extras.

An important caveat: be sure to inquire if your HMO includes prescription drug coverage. HMOs are not required to offer Medicare prescription drug coverage, but they often do. If you are covered by an HMO, you ARE NOT ELIGIBLE to join a Medicare Part D Prescription Drug Plan.