Final answer:
Assignment of benefits is the process where a patient allows the insurer to pay the healthcare provider directly. This is common in fee-for-service and managed care systems, relating to larger concepts of moral hazard and adverse selection in health insurance. Deductibles, copayments, and coinsurance are strategies to counteract these issues.
Step-by-step explanation:
The process whereby the patient allows the payer to directly reimburse the provider is called assignment of benefits. This is an arrangement by which a patient requests that their health benefit payments be made directly to a designated person or facility, such as a physician or hospital. Under this agreement, the provider typically accepts the payment amount as the full payment for the service rendered, understanding that it may be less than the billed amount due to contracted rates with the insurance payer. This is part of the broader health insurance operations within fee-for-service and managed care systems like HMOs. Health finance mechanisms such as deductibles, copayments, and coinsurance are used to manage moral hazard and adverse selection in the insurance market.