Certified Revenue Cycle Representative (CRCR) Practice Exam

What type of insurance is characterized by negotiated healthcare coverage within a framework of fee schedules, limitations, and exclusions?

1. Indemnity insurance

2. Preferred provider organization

3. Health maintenance organization

4. Point of service plan

The correct answer is: Indemnity insurance

The type of insurance that is characterized by negotiated healthcare coverage within a framework of fee schedules, limitations, and exclusions is known as a preferred provider organization (PPO). This model relies on a network of healthcare providers who agree to provide services at reduced fees for customers enrolled in the plan. PPOs are designed to offer flexibility in choosing providers while also managing costs through negotiated rates. Members have the option to see any healthcare provider, but they will incur lower out-of-pocket costs when they utilize the providers within the network. The presence of fee schedules and the ability to see both in-network and out-of-network providers characterize this model. While indemnity insurance provides more flexibility and choice without a network structure, it typically does not involve the same level of negotiated fee schedules and limitations found in a PPO. Health maintenance organizations (HMOs) and point of service (POS) plans also have specific network requirements but are structured differently in terms of provider access and care management.