Final answer:
The document sent by insurance companies explaining charges, reimbursements, and patient responsibilities is known as an Explanation of Benefits (EOB). It includes details about the allowed charge, amount reimbursed, and the deductible or copayment due by the patient.
Step-by-step explanation:
When it comes to understanding health insurance documents, it's important to know the terminology used by insurance companies and health care providers. A document that is commonly sent by insurance companies is the Explanation of Benefits (EOB), which details the costs and payments for medical services rendered. It lists the allowed charge (the amount insurers agree to pay for a service), the amount reimbursed, and outlines the policyholder's financial responsibilities, including deductibles, copayments, or coinsurance.
These various terms can be described as follows: A deductible is an amount that must be paid out-of-pocket by the policyholder before the insurance begins to pay for services. Fee-for-service is a system in which health care providers are paid per service they deliver.
A Health Maintenance Organization (HMO) is a group that provides health care to enrolled individuals for a fixed fee, regardless of the services used, which might be an alternative to the fee-for-service approach. Each of these elements plays a part in reducing moral hazard by ensuring that insured individuals share in the cost of their healthcare, thus preventing overutilization or unnecessary medical procedures.
The correct answer to the student's question is A) EOB, which stands for Explanation of Benefits, the document that includes all the necessary details of a medical transaction as explained above.