Which of the following describes a "Preferred Provider Organization" (PPO)?

A "Preferred Provider Organization" (PPO) is characterized by its flexibility in choosing healthcare providers and the financial incentives it offers for using network providers. Members of a PPO have the option to select healthcare services from a broad network of physicians and facilities, which provides them with greater choice compared to more restrictive plans, such as Health Maintenance Organizations (HMOs).

PPOs typically allow members to see any doctor or specialist without needing a referral, although choosing a provider within the network usually results in lower out-of-pocket costs. This structure encourages members to utilize the network's providers—those who have agreed to provide services at negotiated rates—by offering lower copayments or coinsurance for these in-network services. Thus, the PPO model balances flexibility for the insured while also promoting cost-effective healthcare delivery.

The other options do not accurately represent the features of a PPO. For instance, options that describe restrictive plans or require primary care physician referrals fail to capture the fundamental flexibility that defines a PPO's structure and advantages.