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Preferred Provider

What is a preferred provider?

A preferred provider is a healthcare provider who is under contract with an individual’s health plan or health insurer. These providers offer medical care at a reduced rate. Sometimes, health plans and health insurers have tiered networks, meaning some providers cost more than others to see.  

Preferred providers are integral to preferred provider organizations (PPOs).  

Why are preferred providers important to healthcare?

Preferred providers are important to healthcare because they offer patients more options when selecting a provider while bolstering provider-payor relationships. Having a network of providers from a health plan or health insurer also reduces the cost of care for patients. In addition, providers under contract with plans and insurers may benefit from access to a higher volume of patients, which helps them keep their service costs lower.