Which of the following is a characteristic of preferred provider organizations (PPO)?

The characteristic of preferred provider organizations (PPO) that states if service is obtained outside the PPO, benefits are reduced and costs increase is correct because PPOs are designed to offer more flexibility in choosing healthcare providers while also incentivizing members to use a network of preferred providers. When services are obtained outside this network, the insurance plan typically pays a smaller portion of the costs, resulting in higher out-of-pocket expenses for the member. This structure encourages members to seek care from in-network providers to benefit from lower costs, thus maintaining the financial viability of the plan while providing choice.

The other choices each present aspects that are not aligned with how PPOs function. For example, stating that all services are covered at 100% does not accurately describe PPOs, as there are usually copayments, deductibles, and coinsurance involved. Additionally, while it is true that PPOs allow patients to see specialists without requiring referrals, saying that members pay higher premiums for in-network services is incorrect; typically, premiums are lower for in-network services compared to out-of-network services. Understanding these distinctions is crucial for navigating the benefits and costs associated with PPO structures.