87. Which of the following is described when a selected group of practitioners, in a certain area, agrees to provide services at a pre-arranged cost on a fee-for-service basis?
Answer: A
Preferred provider organization is the correct term for the described arrangement.
A preferred provider organization (PPO) is characterized by a network of selected practitioners who agree to provide services at pre-arranged costs on a fee-for-service basis, which aligns perfectly with the question.
A) preferred provider organization
This option accurately describes the scenario presented in the question. A preferred provider organization is a managed care network of medical providers that have agreed to provide services to plan members at reduced fees. Patients usually have the flexibility to choose providers and receive services at a lower cost if they use those within the PPO network.
B) indemnity organization
An indemnity organization refers to a type of insurance that allows participants to choose any healthcare provider without a network restriction. While it provides a level of freedom in provider choice, it does not involve the pre-arranged cost agreements that characterize a preferred provider organization, making it an incorrect choice.
C) risk purchasing group
A risk purchasing group is a collective of businesses that come together to purchase insurance at a lower cost due to their combined purchasing power. This term does not pertain to the arrangement of healthcare services at pre-arranged costs on a fee-for-service basis, thus it is not applicable to the scenario described in the question.
D) coalition group
A coalition group typically refers to an alliance formed by various organizations to achieve a common goal, often in advocacy or policy change. It does not specifically pertain to a structured agreement for providing healthcare services at pre-arranged fees, making this option incorrect.
Conclusion
The preferred provider organization (PPO) is the only option that directly matches the description of a group of practitioners agreeing to provide services at pre-arranged costs on a fee-for-service basis. Other options such as indemnity organizations, risk purchasing groups, and coalition groups do not accurately reflect this specific arrangement, confirming that A is the definitive correct answer.