Preferred Provider Organization (PPO) Law and Legal Definition

A preferred provider organization (PPO) is a is a managed care organization that allows a beneficiary to visit whatever in-network physician or healthcare provider s/he wishes without first requiring a referral from a primary care physician. A PPO is basically an organization consisting of medical doctors, hospitals, and other health care providers who have entered into a contract with an insurer or a third-party administrator to provide health care at reduced rates to the insurer's or administrator's clients. A PPO offers higher benefit level services and the beneficiary can self refer to specialists of their choice.

A member of a PPO plan must make co-payments, coinsurance, and an annual deductible before coverage begins. In the U.S., a PPO is also referred to as a participating provider organization or preferred provider option.