Insurance Policies & Contracts Flashcards

A provider who signs a participation agreement with Medicare must accept assignment, which means they agree to:

Answer: Accept Medicare's allowed amount as payment in full

Accepting assignment means the provider accepts Medicare's approved amount as full payment and cannot bill the patient more than applicable cost-sharing.

The term 'allowed amount' in an insurance contract refers to:

Answer: The maximum the insurer will pay for a specific service

The allowed amount (also called the allowable or fee schedule amount) is the maximum reimbursement the payer will provide for a given service.

Which type of insurance policy requires the insured to choose a primary care physician who manages all care and referrals?

Answer: HMO

Health Maintenance Organizations (HMOs) require members to select a PCP who acts as a gatekeeper and coordinates all referrals.

A payer contract states that the provider cannot bill patients for the difference between the billed amount and the allowed amount. This is known as:

Answer: Balance billing prohibition

A balance billing prohibition in a provider contract prevents the provider from charging patients the difference between billed charges and the payer's allowed amount.

Under a Point-of-Service (POS) plan, a member who sees an out-of-network provider without a referral will typically:

Answer: Pay higher cost-sharing compared to in-network care

POS plans allow out-of-network use but impose higher deductibles, coinsurance, or copays compared to in-network care.

A global period associated with a surgical procedure means that:

Answer: Pre- and post-operative care is bundled into the surgical fee

A surgical global period bundles routine pre-operative and post-operative visits into the single surgical reimbursement, preventing separate billing.

Which document defines the specific benefits, limitations, and exclusions of a group health insurance policy issued to an employer?

Answer: Summary Plan Description

The Summary Plan Description (SPD) is a legally required document that details the benefits, rights, and obligations under an employer-sponsored health plan.