Final answer:
The term SIGNATURE ON FILE in Block 12 of the CMS-1500 claim form indicates that the patient has signed an authorization allowing the release of medical information to the payer.
Step-by-step explanation:
Entering SIGNATURE ON FILE in Block 12 of the CMS-1500 claim form means that, in order to release medical information to the payer, the patient has signed a(n) authorization. This authorization allows the healthcare provider to release information to the insurance company for the purpose of claim investigation and payment. It is different from an assignment of benefits, which is when a patient agrees to have their insurance payments sent directly to the provider, an encounter form, which documents a patient's visit and services provided, or a source document, which refers to the original documentation that shows a patient's medical history and personal information.