What does the acronym PPO stand for in healthcare?

The acronym PPO stands for Preferred Provider Organization. This type of health insurance plan allows members to choose healthcare providers from a network of pre-selected doctors, hospitals, and other healthcare facilities. The major advantage of a PPO is that members can receive care from both in-network and out-of-network providers, though they typically pay lower out-of-pocket costs when utilizing in-network services.

Understanding the structure of a PPO is important in medical coding and billing because it influences how services are billed, the reimbursement rates, and the necessity for prior authorizations for certain procedures. Each healthcare plan has different rules regarding which services require referrals and how much members are responsible for financially, which can impact the coding and billing processes.

The other options do not accurately define the terminology used in healthcare settings. Knowledge of the correct terminology, such as PPO, is essential for effective communication within healthcare and for ensuring that coding and billing processes are handled correctly.