Which of the following statements is INCORRECT regarding a PPO?

The statement that is incorrect regarding a PPO is that PPOs require referrals for specialists. One of the defining characteristics of Preferred Provider Organizations (PPOs) is that they offer a more flexible approach to receiving care compared to other managed care plans, such as Health Maintenance Organizations (HMOs). In a PPO, members have the freedom to see any healthcare provider within the network without needing a referral from a primary care physician.

This flexibility is one of the main attractions of PPOs, allowing members to access specialists directly. Consequently, members can avoid potential delays in receiving care, which may be necessary in plans that do require referrals.

In contrast, the other statements accurately reflect key features of PPOs. They are indeed a type of managed care system, they provide a network of participating providers, and while they generally offer some cost-saving advantages, members can experience higher out-of-pocket costs if they choose to see non-network providers or if they do not meet certain cost-saving criteria. Overall, understanding this aspect of PPOs helps clarify why referrals for specialists are not a requirement.