Final answer:
A payment from Medicare before the primary payer's payment, when Medicare is secondary and it is suspected that the primary will not pay promptly, is called a Conditional Payment. This system works within the broader context of healthcare reimbursement models, addressing the financial risk providers face due to insurance market complexities like adverse selection.
Step-by-step explanation:
A payment requested from Medicare before a primary payer's payment is received when Medicare is the secondary payer, and the provider believes that the primary payer will not pay within 120 days is called a Conditional Payment. This occurs within the health insurance context, where Medicare acts as a secondary coverage to a primary insurance. Under a fee-for-service health financing system, providers are usually compensated based on the services rendered, however, in cases where Medicare is secondary, it might issue a conditional payment to cover the costs until the primary insurer pays.
Conditional payments can help to address the issue of adverse selection, which is a risk that occurs when there is an imbalance in information between insurance buyers and insurers about the risks involved. The conditional payments ensure that the provider is reimbursed for their services even when there is uncertainty about the primary payer's timely payment.