Final answer:
Claims under an HMO policy are often rejected due to the lack of pre-authorization from the provider. HMOs pay providers per patient, not per service, leading to the need for careful management of resources and adherence to insurance protocols.
Step-by-step explanation:
For an HMO policy, claims are often rejected due to pre-authorizations not being obtained by the provider. Health Maintenance Organizations (HMOs) differ from fee-for-service health financing systems in that they reimburse medical care providers based on the number of patients rather than the cost of services. These providers must manage the allocation of resources to patients effectively. However, they must also navigate insurance protocols, such as acquiring pre-authorization for certain treatments to ensure they are covered. Adverse selection occurs when there is an asymmetry of information between insurance buyers and insurance companies, leading to potential mismatches in coverage expectations and actual services provided. Effective policy development must address the balance between the costs of treatments, patient quality of life, and risks to individual privacy.