Which term describes a network where providers contract with insurers to render care at discounted rates?

• A. Preferred provider organization
• B. Health maintenance organization
• C. Capitation plan
• D. Point of service

Answer: (A)

This question centers on how care networks negotiate discounts with insurers. A preferred provider organization is defined by providers signing agreements with insurers to accept discounted rates for services when patients stay within the network. Because of these negotiated rates, patients save money by using in-network clinicians, while still having the option to see out-of-network providers at higher costs if they choose.

Understanding the other options helps see why this fits best. A health maintenance organization emphasizes a primary care physician who coordinates and restricts referrals within a fixed network, usually with prepaid arrangements. A capitation plan refers to how providers are paid (a set amount per patient per period) rather than how the network itself is structured. A point of service blends features of HMO and PPO plans, offering some out-of-network access but typically with more restrictions and cost-sharing than a pure PPO.