A preferred provider organization (PPO) is a Medicare Advantage plan which gives policy holders an incentive use the providers (doctors, hospitals) within the plan’s network of service providers. In return, the plan pays a higher percentage of your health care expenses.
But out-of-network care is also covered, albeit with higher out-of-pocket costs (this is in contrast to a plan like an HMO, which generally won’t cover out-of-network costs at all).