Final answer:
CPT codes are assigned a status indicator in the OPPS to denote the reimbursement method for services or procedures. These indicators are vital for fee-for-service payment models, contrasting with patient-based models in HMOs. Adverse selection further complicates insurance market dynamics.
Step-by-step explanation:
The status assigned to Current Procedural Terminology (CPT) codes that indicates whether a service or procedure will be reimbursed under the Outpatient Prospective Payment System (OPPS) is called a status indicator. In the OPPS, each CPT code is assigned a status indicator that tells providers how each service or procedure is paid. This includes the payment methodology such as whether the payment is packaged into another service or paid separately. In fee-for-service systems, this plays an essential role as providers get reimbursed for the cost of services provided. However, in HMOs, reimbursement is instead based on the number of patients. Further complexity arises from issues such as adverse selection, which impacts the insurance market where insurers may misjudge the risk of insuring different parties.