Which statement describes a typical difference between a PPO and an HMO?

• A. PPOs require referrals for all specialist visits.
• B. PPOs generally allow access to both in-network and out-of-network providers at pre-negotiated rates, with some flexibility.
• C. PPOs provide only in-hospital coverage with no outpatient services.
• D. PPOs do not negotiate any rates with providers.

Answer: (B)

The main idea is that PPOs offer more provider choice and less restrictiveness than HMOs. You can see both in-network and out-of-network providers, and you don’t usually need a referral to see a specialist. In-network care is at pre-negotiated, discounted rates, while out-of-network care is allowed but typically costs more and is less favorable in terms of coverage. The statement that best reflects this typical difference is that PPOs generally provide access to both in-network and out-of-network providers with some flexibility, backed by negotiated rates for those network providers. The other options misstate PPO features: referrals for specialists are not required in a PPO; PPOs aren’t limited to hospital coverage only; and PPOs do negotiate rates with providers, at least for in-network services.