What Does PPO Stand For? Preferred Provider Organization

What does PPO stand for? On an insurance card or a benefits form, PPO stands for preferred provider organization, a type of health plan that has a network of doctors, hospitals and other providers who agree to set rates. You pay less when you use those "preferred" providers, but the plan still pays part of the bill if you go outside the network.

The big draw of a PPO is freedom. Most PPOs skip the rule that you name one main doctor, and specialists are often open to you without a referral. In exchange, PPO plans tend to cost more each month than tighter plans such as an HMO.

Quick facts

Stands for
Preferred provider organization
Type
Initialism, said P P O
What it is
A health or dental plan with a provider network
Out of network
Usually covered, at a higher cost to you
Referrals
Usually not needed for specialists
Compare with
HMO, EPO, POS plans
Seen on
Insurance cards, open enrollment forms, dental plans

What does PPO stand for, word by word?

Preferred: some providers get a favored status in the plan.
Provider: anyone who gives care, such as doctors, hospitals, labs and therapists.
Organization: the network and the agreements that hold it together.

The preferred providers have signed contracts with the insurer to accept discounted rates. When you visit them, you are "in network." When you see someone without a contract, you are "out of network," and the plan pays a smaller share, if the plan includes that coverage at all. Seeing PPO on your card tells the doctor's office how to bill and roughly what kind of coverage you have.

How a PPO plan works day to day

You pay a monthly premium, often through payroll at work.
You meet a deductible, the amount you pay each year before the plan shares most costs. Some services, like preventive checkups, may be covered before it.
You share costs after that through copays (flat amounts per visit) and coinsurance (a percentage of the bill).
Out of network costs more. There may be a separate, higher deductible, and you may be billed the gap between the provider's charge and what the plan allows.
An out-of-pocket maximum caps what you pay in covered costs for the year.

At the front desk: "We are in network with your PPO, so today is just your specialist copay." Because the clinic has a contract with the plan, the patient pays the set copay instead of a larger out of network share.

PPO vs HMO and other plan types

Common health plan types compared
Plan	Stands for	Out of network	Referrals
PPO	Preferred provider organization	Yes, but you pay a bigger share	Rarely required
HMO	Health maintenance organization	Emergencies only, in most plans	Typically required
EPO	Exclusive provider organization	Emergencies only, in most plans	Often skipped
POS	Point of service	Yes, at a larger share	Typically required

These are general patterns, and each plan writes its own rules. A PPO can also be paired with a high deductible, which may make it eligible for an HSA, a tax-advantaged health savings account. Plans sold on the public marketplace created under the ACA come in many of these types.

Dental PPOs and other places you see the letters

Dental insurance often uses the PPO model too. A dental PPO has a network of dentists with set fees, and you can usually see others for less coverage. Vision plans sometimes work the same way.

In some court systems, PPO has an unrelated meaning: personal protection order, a court order that limits contact between people, used in Michigan and a few other places. Outside a courthouse or legal letter, PPO almost always refers to insurance. More everyday letters are explained in the famous acronyms list.

This page is general information about health plan terms, not advice on choosing coverage. Plan rules, networks and costs differ, so read your plan's summary of benefits and check with your insurer, employer benefits office or a licensed insurance professional for your own situation.

Saying PPO and using it in sentences

PPO is an initialism, said "P P O." All three letters are capitals with no dots, and "a" is the article to use: "a PPO plan." The plural is PPOs.

"I switched to the PPO so I could keep my current doctor."
"Is this lab in network for my PPO?"
"Our company offers an HMO and a PPO during open enrollment."
"The dental PPO covers two cleanings a year."

Quick tips before you pick or use a PPO

Check that your doctors, hospital and pharmacy are in network before you enroll.
Ask the office to confirm network status before a planned procedure.
Compare yearly totals, not just premiums: premium, deductible and likely visits together.
Keep your card handy; the plan name and network name are often printed on it.
Learn more about the letters on health papers, such as PHI and HIPAA.

Questions people ask

What does PPO stand for in health insurance?

Preferred provider organization. It is a plan with a network of providers at lower rates, plus partial coverage when you go outside the network.

Is a PPO better than an HMO?

Neither is better for everyone. A PPO usually gives more choice and fewer referral steps but costs more, while an HMO usually costs less but keeps you inside its network. The right one depends on your doctors, budget and health needs.

Do I need a referral with a PPO?

Most PPO plans let you see specialists without a referral. Some services still need prior approval from the insurer, so check your plan documents.

Can I see any doctor with a PPO?

You can usually see doctors outside the network, but you will pay more and may get a bill for the difference. In-network doctors cost the least.

What does PPO mean on a dental plan?

It means the same type of arrangement: a network of dentists who accept set fees, with lower coverage if you use a dentist outside the network.