Final answer:
Health care providers are paid based on the submitted codes for services provided to patients. In fee-for-service systems, reimbursements are made according to the cost of services, while HMOs reimburse based on patient numbers. Adverse selection can affect the balance of insurance participants.
Step-by-step explanation:
Providers of health care are paid based on the codes submitted for services or procedures provided to the patient. In fee-for-service health financing systems, medical care providers receive reimbursement according to the cost of services they've provided. Conversely, in health maintenance organizations (HMOs), providers are reimbursed based on the number of patients they handle, requiring them to manage resources efficiently among patients. Another insurance term, adverse selection, refers to the scenario in insurance markets where buyers have more knowledge about their risks than the insurance provider, leading to a disproportionate number of high-risk individuals utilizing the insurance plan.
For instance, when coding for medical services, ICD codes are used to identify various treatments and procedures. This standardized coding system allows for the medical coders and billers to accurately process claims for insurers. Deductibles, copayments, and fee-for-service payments are part of the monetary aspects of health care requiring a comprehensive understanding from providers and patients alike.