Life License Qualification Program (LLQP) Practice Exam

What type of system involves a group of doctors and hospitals contracting with an insurer to provide services at a prearranged cost?

1. HMO

2. PPO

3. EPO

4. PLHSO

The correct answer is: PPO

The type of system described involves a group of doctors and hospitals working together under a contract with an insurer to provide health care services at a prearranged cost. This is characteristic of a Preferred Provider Organization (PPO). In a PPO, the insurer negotiates rates with a network of providers, allowing members to choose from a list of preferred providers while still offering the flexibility to see out-of-network providers, though at a higher cost. This arrangement allows for access to a wider range of healthcare services while keeping costs manageable. In contrast to PPOs, Health Maintenance Organizations (HMOs) typically require members to choose a primary care physician and get referrals for specialized services, while Exclusive Provider Organizations (EPOs) are similar but do not cover any out-of-network care. PLHSOs, which stand for Publicly Licensed Health Service Organizations, are less common and generally do not fit the structure described in this scenario. Thus, the attributes of the PPO best match the arrangement mentioned in the question.