Certified Revenue Cycle Representative (CRCR) Practice Exam

Which term describes payments made by a health insurance provider on behalf of a subscriber?

1. Primary reimbursement

2. Third-party reimbursement

3. Direct compensation

4. Provider payment

The correct answer is: Third-party reimbursement

The term that describes payments made by a health insurance provider on behalf of a subscriber is third-party reimbursement. This concept arises in healthcare when a patient's costs for medical services are paid by an entity other than the patient, typically an insurance company. In this context, the insurance provider acts as a third party that financially supports the healthcare services utilized by the subscriber. The core essence of third-party reimbursement is the involvement of an intermediary (the insurance company) settling the expenses directly with healthcare providers, rather than having the patient pay out-of-pocket first and then seeking reimbursement. While other terms may reference payments in the healthcare system, they do not encapsulate the relationship involving an external entity covering costs incurred by a patient for medical services.