Which statement describes a PPO?

• A. May be in or out of network and paid on a fee-for-service basis
• B. All services must be prepaid
• C. Only hospital services are covered
• D. Premiums do not vary with provider network

Answer: (A)

PPOs give you choice and pay on a fee-for-service basis. In a PPO you can receive care from in-network providers who have negotiated discounts, or from out-of-network providers at higher out-of-pocket costs, with the plan reimbursing on a per-service basis. This flexibility—being able to choose either network option and paying per service rather than through a prepaid plan—best matches the statement described. The other options reflect different plan structures: prepaid-only describes an HMO setup; restricting coverage to hospital services isn’t how a PPO works; and premiums are typically fixed while the cost you pay at the point of service varies with whether you stay in-network.