Preferred Provider Organizations (PPOs) date back to 1980 when the first PPO was organized to provide contracted rate medical care to a health plan. For providing “steerage” toward the medical providers in the PPO network, the providers granted discounted rates for their services to the health plan.

Over the years, PPOs have changed and morphed into multiple variations, but the end result is the same – health plan members are steered toward PPO providers for their medical care and given favorable discounted rates.

The advantage of this type of arrangement is very obvious – it’s price.

It can be upsetting to receive an unexpected bill for medical services. Before you panic, do some research. You need to understand what the bill is for and who really has the responsibility for its payment.
 
This is called balance billing. Balance billing occurs after your insurance company has paid everything it’s obligated to pay – but the provider wants more.
 
For example, if your doctor charges $100 for a service, your insurance company might pay them $70. Who is responsible for the other $30? Is it part of your required out-of-pocket costs (copays, deductibles, coinsurance)?