Certified Nurse Manager and Leader (CNML) Practice Test

What is a characteristic of Preferred Provider Organizations (PPOs)?

1. Limited access to specialists

2. Higher fees when using out-of-network providers

3. Annual enrollment fees

4. Exclusive partnerships with community clinics

The correct answer is: Higher fees when using out-of-network providers

Preferred Provider Organizations (PPOs) are designed to offer more flexible healthcare options compared to other managed care plans. A key characteristic of PPOs is that they allow members to see any healthcare provider, but they will incur higher costs if they choose to use out-of-network providers. This structure encourages members to utilize a network of preferred providers who have agreed to provide services at reduced rates. By doing so, PPOs provide an incentive for members to seek care within the network while still offering the option to see out-of-network providers at a higher cost. In contrast, the other choices present limitations. Limited access to specialists would typically be more characteristic of Health Maintenance Organizations (HMOs), where members must seek referrals from primary care physicians to see specialists. Annual enrollment fees are not a universal feature among PPOs, as membership typically doesn’t require such fees, making this option less representative of their structure. Exclusive partnerships with community clinics are also not a hallmark of PPOs, as they focus on a broader network of providers rather than exclusive agreements with specific clinics.