Contemporary Issues in Nursing Related

Review Contemporary Issues in Nursing related questions and content

A contractual agreement between the insurer and the provider in which covered members are encouraged to use specific health care providers in return for reduced rates is which type of arrangement?

  • A. Health maintenance organization
  • B. Preferred provider organization
  • C. Fee-for-service arrangement
  • D. Philanthropic agency
Correct Answer: B

Rationale: The correct answer is B: Preferred provider organization (PPO). PPOs offer reduced rates to covered members who use specific healthcare providers within their network. This arrangement incentivizes members to choose in-network providers, resulting in cost savings for both the insurer and the member. In contrast, A (Health maintenance organization) focuses on preventive care and requires members to select a primary care physician, C (Fee-for-service arrangement) allows members to choose any provider with varying reimbursement rates, and D (Philanthropic agency) is not related to health insurance arrangements.