Question

The process whereby the patient allows the payer to directly reimburse the provider is called:

1) Accepting assignment
2) Authorization to release information
3) Coordination of benefits
4) Assignment of benefits

Answer 1

The process where a patient authorizes an insurance company to pay the healthcare provider directly is known as Assignment of benefits. This term is part of the broader healthcare financing systems and insurance mechanisms designed to promote fair cost-sharing and minimize moral hazard.

Step-by-step explanation:

The process whereby the patient allows the payer to directly reimburse the provider is called Assignment of benefits. This term refers to the arrangement where a patient authorizes their insurance company to pay their healthcare provider directly for medical services received.

In the context of healthcare financing, a fee-for-service system involves healthcare providers receiving payment based on the specific services they perform. On the contrary, health maintenance organizations (HMOs) reimburse providers with a fixed amount per patient, regardless of the individual services delivered. Insurance terms like deductibles, copayments, and coinsurance refer to the different types of cost-sharing mechanisms which require policyholders to pay certain amounts before the insurance benefits kick in. These mechanisms are designed to reduce the moral hazard, making insured parties partly responsible for the costs of their care.