Insurance Terminology Quiz

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Questions and Answers

What is the purpose of coinsurance in an insurance policy?

To provide a fixed percentage of the cost that the patient is responsible for paying (correct)

To ensure the patient receives care only from preferred providers

To limit the number of services the insurance company will cover

To require the patient to pay a fixed dollar amount for each service

How does coinsurance differ from a copayment?

Coinsurance is a percentage, while a copayment is a fixed dollar amount (correct)

Coinsurance is only applicable to managed care plans, while copayments can be used in any type of insurance plan

Coinsurance applies to the total cost of a service, while a copayment applies only to the patient's portion

Coinsurance is paid by the insurance company, while a copayment is paid by the patient

Which of the following is an example of coinsurance?

The insurance company pays 80% of the cost of a service, and the patient pays the remaining 20% (correct)

The insurance company will only cover services provided by doctors in its preferred provider network

The patient must receive prior authorization from the insurance company before receiving certain services

The patient pays a $20 copayment for each doctor's visit

How does coinsurance affect the patient's out-of-pocket costs for medical services?

Coinsurance increases the patient's out-of-pocket costs by requiring them to pay a fixed percentage of the total cost Signup and view all the answers

Which of the following is a key purpose of coinsurance in insurance plans?

To encourage patients to be more cost-conscious consumers of healthcare services Signup and view all the answers

How does coinsurance differ from a deductible in an insurance plan?

Coinsurance is only applicable to managed care plans, while deductibles can be used in any type of insurance plan Signup and view all the answers

What is the purpose of coinsurance in health insurance plans?

To share the cost of covered services between the patient and the insurance provider Signup and view all the answers

How does coinsurance differ from a deductible in health insurance plans?

Coinsurance applies after the deductible has been met, while a deductible applies before any coverage kicks in Signup and view all the answers

If a health insurance plan has an 80/20 coinsurance rate, what does this mean?

The insurance provider pays 80% of covered costs and the patient pays 20% Signup and view all the answers

How does coinsurance affect a patient's out-of-pocket costs for covered healthcare services?

Coinsurance increases the patient's out-of-pocket costs by a percentage of the total cost Signup and view all the answers

What is the purpose of a coinsurance maximum or out-of-pocket maximum in a health insurance plan?

To limit the total amount the patient has to pay in coinsurance costs per year Signup and view all the answers

How does coinsurance apply when a patient receives services from an out-of-network provider?

Coinsurance applies at a higher percentage, requiring the patient to pay a larger share of the costs Signup and view all the answers

What is the role of a medical assistant in preparing health care claims?

All of the above Signup and view all the answers

Which of the following is NOT a basic insurance terminology term?

Deductible Signup and view all the answers

In an insurance contract, who is the 'first party'?

The patient Signup and view all the answers

What is the primary responsibility of a medical assistant regarding health care claims?

Ensuring maximum appropriate payment for services rendered Signup and view all the answers

Which of the following is NOT a participant in an insurance contract?

The government Signup and view all the answers

What is the purpose of a 'lifetime maximum benefit' in an insurance policy?

It sets a limit on the total amount the insurance company will pay for a policyholder's medical expenses over their lifetime Signup and view all the answers

Study Notes

Basic Insurance Terminology

Deductible is met annually
Coinsurance is a fixed percentage
Copayment is associated with managed care plans and preferred provider
Exclusions are part of insurance coverage
Formulary is a list of approved medications

Insurance Participants

Three participants in an insurance contract:
- First party: patient or policy owner
- Second party: healthcare provider (physician or facility)
- Third-party payer: health plan or insurance company

Types of Insurance Plans

Fee-for-service plans
HMOs (Health Maintenance Organizations)
PPOs (Preferred Provider Organizations)

Government Insurance Programs

Medicare
Medicaid
TRICARE
CHAMPVA

Insurance Claim Process

Allowed charge: amount approved by insurance company
Contracted fee: negotiated rate between provider and insurance company
Capitation: fixed payment per patient
RBRVS (Resource-Based Relative Value Scale): formula for determining payment

Insurance Claim Submission

Tasks to obtain information required to produce an insurance claim:
- Review insurance coverage
- Explain fees
- Estimate charges
- Understand payment explanation
- Calculate patient's financial responsibility
Producing a clean CMS-1500 health insurance claim form
Submitting an insurance claim electronically
Understanding information on payer's remittance advice

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Description

Test your knowledge of basic insurance terminology related to deductible, coinsurance, copayment, exclusions, and formulary. Understand concepts like met annually, fixed percentage, managed care plans, and preferred provider.