Question

A medical assistant is reviewing charges for an in office procedure, which of the following terms describes the maximum reimbursement a third-party payer will provide?

1) Deductible
2) Co-payment
3) Out-of-pocket maximum
4) Allowable charge

Answer 1

The maximum reimbursement a third-party payer will provide is known as the allowable charge. This is distinct from a deductible, copayment, or coinsurance, all of which involve the policyholder sharing the costs with the insurance company to reduce moral hazard.

Step-by-step explanation:

The term that describes the maximum reimbursement a third-party payer will provide for an in office procedure is known as the allowable charge. This is different from a deductible, which is the amount the policyholder must pay out-of-pocket before the insurance company starts to pay their share. A copayment is a fixed fee paid by the policyholder for services received, and coinsurance is a percentage of the total bill that the policyholder pays.

Deductibles, copayments, and coinsurance are methods used by insurance companies to share costs with policyholders and to reduce moral hazard, which is the risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.