Chap 3

Question 1

indemnification for losses

Answer 1

The agreement to pay for losses incurred by another party.

Question 2

Adverse selection

Answer 2

means that individuals most likely to need healthcare services are most likely to buy health insurance

Question 3

Moral hazard

Answer 3

risk to an insurer that excess healthcare services are being consumed because individuals do not bear the full cost of the services provided

Question 4

coinsurance

Answer 4

sharing of costs between the patient and the insurer

Question 5

Medicare Advantage plan

Answer 5

Managed care plan coverage offered to Medicare beneficiaries that replaces Parts A and B coverage

Question 6

Managed care organizations (MCOs

Answer 6

combine insurer and provider functions into a single administrative organization

Question 7

prospective payment

Answer 7

A reimbursement system meant to cover expected costs as opposed to historical (retrospective) costs

Question 8

ICD codes

Answer 8

standard alphanumeric designations used by hospitals and other organizations to specify patient diagnoses

Question 9

CPT codes

Answer 9

American Medical Association that are used by clinicians to specify procedures performed on patients.

Question 10

accountable care organization (ACO

Answer 10

An organization that integrates physicians and other healthcare providers with the goal of controlling costs and improving quality.