A contractual agreement between a hospital and a corporation to pay th

A contractual agreement between a hospital and a corporation to pay the health care expenses of the corporation’s employees is an example of a(n):

1. PPO
2. HMO
3. Private insurance
4. Third-party payment

ANSWER

ANS: 1
A preferred provider organization (PPO) is characterized by a contractual agreement between a set of providers (e.g., hospitals, physicians, or clinics) and a purchaser (e.g., the corporation’s in-surance plan). Comprehensive health services are provided at a discount to the companies under contract. Enrollees are limited to a list of “preferred” hospitals, physicians, and providers. An enrollee pays more out-of-pocket expenses for using a provider not on the list.
A Medicare HMO is the same as a managed care organization (all care provided by a primary care physician) but designed to cover costs of senior citizens.
Private insurance is the traditional fee-for-service plan where payment is computed after services are provided based on the number of services used.
Third-party payment is when an entity (other than the client or health care provider) reimburses health care expenses. Third-party payers include insurance companies, governmental agencies, and employers.