What distinguishes a "preferred provider organization" (PPO) from an HMO?

The distinguishing feature of a preferred provider organization (PPO) compared to a health maintenance organization (HMO) is that PPOs have no restrictions on accessing specialists. In a PPO, members can see any healthcare provider without needing a referral, which allows for greater flexibility in choosing specialists and receiving care.

This structure appeals to individuals who may want more freedom in their healthcare decisions and prefer to consult specialists directly rather than going through a primary care physician first, which is typically required by HMOs. In contrast, HMOs are designed to coordinate care more closely through a primary care physician, who serves as the gatekeeper for referrals to specialists.

The other options do not accurately reflect the core distinctions between PPOs and HMOs. For example, PPOs do not require members to select a primary care physician, they do not typically provide a flat rate for all services (rather, they often use a cost-sharing model), and both types of plans can emphasize preventive care, although they may do so in different ways.