Question

Define major insurance, billing, and patient service process risk in a 1 page paper with references

Answer 1

Ans.

To begin answering this question, let us first get to know this basic understanding of what exactly risk is. So, risk is basically anything that has an uncertainty regarding loss due to any unexpected situations.

- Thus, major insurance, billing and patient service process risk comes into picture.

Definition: Process risk is also called as diversifiable risk and it is defined as the potential losses related to any business process. It is considered to be the operational risk as it related to the operations on a daily basis. Since all of these are inter relatable, let me explain about the major process risk based on these (insurance, billing and patient service).

- Process risk commands a price, as the insurance managers incur costs to reduce process risk and alongside pass to the policy holder be it an individual or a firm (organization).

As per the research, three major methods for managing these process risks reinsurance, maintain adequate funds and diversification in all of these.

But, most of these process risks facing an insurer states that the               diversification of products or services reduces firm’s total risk enormously compared to standalone risk of reinsurance or the adequate funds risk at the individual policy level.

Reference:

The U. S. proposal is the Financial Accounting Standards Board, Preliminary Views document titled

"Reporting Financial Instruments and Certain Related Assets and Liabilities at Fair Value", dated

December 14, 1999. Also, a parallel international proposal is the International Accounting Standards

Committee, Insurance Issues Paper, released in November 1999.