Final answer:
The amount that Dr. X writes off when receiving a lower payment from an insurance carrier than his usual fee is known as a contractual adjustment. Unlike a deductible or balance billing, this cost is not transferred to the patient, as it is an agreement between the provider and the insurance company. Option B is correct answer.
Step-by-step explanation:
The amount written off by Dr. X in the scenario where he charges $100 for a procedure but agrees with insurance carrier XYZ to receive $75, thereby writing off the remaining $25, is known as a contractual adjustment. This is a common practice in healthcare where the contracted rate between the healthcare provider and the insurance company is less than the provider's regular fee.
The difference between the billed amount and the agreed-upon reimbursement rate is not billed to the patient, which is different from a deductible, a non-participating provider fee, or balance billing. A deductible is an amount paid out-of-pocket by the patient before insurance kicks in.
A non-participating provider is a healthcare provider who does not have a contract with the insurance company. Balance billing occurs when a provider bills a patient for the difference between the provider's charge and the amount covered by the patient's insurance.