How are PPOs typically reimbursed?

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Multiple Choice

How are PPOs typically reimbursed?

Explanation:
Discounted fee-for-service is how PPOs are typically reimbursed. In this setup, providers agree to accept a negotiated, reduced charge for each service when they’re in-network with the PPO. The insurer pays the provider the discounted amount for every service, and the patient covers any deductible, copay, or coinsurance. This preserves greater provider choice for the patient compared with stricter models, while giving the insurer predictable costs through negotiated rates. Other models—capitation, where a fixed amount is paid per enrolled member regardless of services; salary, where a physician is paid a set salary; and global budgets, which cap total expenditures for a system—are not the standard for PPO reimbursement.

Discounted fee-for-service is how PPOs are typically reimbursed. In this setup, providers agree to accept a negotiated, reduced charge for each service when they’re in-network with the PPO. The insurer pays the provider the discounted amount for every service, and the patient covers any deductible, copay, or coinsurance. This preserves greater provider choice for the patient compared with stricter models, while giving the insurer predictable costs through negotiated rates. Other models—capitation, where a fixed amount is paid per enrolled member regardless of services; salary, where a physician is paid a set salary; and global budgets, which cap total expenditures for a system—are not the standard for PPO reimbursement.

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