Certified Revenue Cycle Representative (CRCR) Practice Exam

Which concept is NOT a contracted payment model?

1. Stop-Loss Provision

2. Percentage Discount

3. Per Diem Payment

4. Capitation

The correct answer is: Stop-Loss Provision

The concept that is not classified as a contracted payment model is a stop-loss provision. A stop-loss provision is a measure that limits the amount of financial risk a healthcare provider or insurance company might face by setting a cap on the losses that could be incurred in a particular situation, such as high-cost patients or unexpected expenses. This means that once the costs reach a certain limit, the losses are "stopped" or covered by a reinsurance policy or other means. In contrast, percentage discount, per diem payment, and capitation are all recognized contracted payment models wherein providers are compensated based on predetermined criteria. For example, percentage discount arrangements involve discounts off billed charges and are negotiated between payers and providers. Per diem payment refers to a set fee for each day a patient is hospitalized, allowing providers to capture costs based on daily care. Capitation involves a fixed amount paid per patient for a defined period, regardless of the number of services provided. These models are designed to manage healthcare costs and align payment with the value of services rendered, while the stop-loss provision serves as a protective mechanism rather than a payment approach.