What’s the difference between health maintenance organizations and preferred provider organizations

To start, HMO stands for Health Maintenance Organization, and the coverage restricts patients to a particular group of physicians called a network. PPO is short for Preferred Provider Organization and allows patients to choose any physician they wish, either inside or outside of their network.

HMO restricts coverage to those medical facilities or providers that are in a contractual agreement with the insurance company, a PPO is a preferred provider organization and a participant receives a better rate if he uses a provider that has a contract with the insurance, the patient is not required to stay within network but the services will be paid at a higher rate of reimbursement.

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