All PPOs are direct contracted, meaning that some entity has a direct contract with the provider.  Most payers use a direct-contracted PPO as their primary provider network to which covered plan participants are steered.  Industry experts agree that direct-contracted PPOs are the most legitimate type of PPO, as a bona fide, deliberate and legal two-way relationship exists between the provider network and the provider that is supported by a written contract between the parties.

Essentially, as an intermediary, the intrinsic value of a PPO is its business relationships with both the provider and the payer.  The strength of the explicit contracts it establishes with both parties, and its ability to legitimately enforce the terms of the contract and require each party to fulfill its obligations. Direct-contracted PPO networks have fewer problems in their dealings.  The integrity of the provider relationship is solid and there is never a dispute about the legitimacy of accessing the provider discount rendered.  Moreover, evidence exists that the discounts obtained from direct-contracted networks are greater as there is more leverage realized by dealing with providers directly.