What does the term "subrogation" refer to in health insurance?

Subrogation in health insurance refers to the process by which an insurance company seeks reimbursement from a third party that caused an insurance loss. This can occur when a policyholder receives medical treatment due to an accident or injury that was caused by someone else's negligence. Once the insurance company pays for the medical expenses, it has the right to pursue the third party for the costs incurred.

This process is important as it helps the insurer recover funds that it has spent on behalf of the insured. It ultimately aims to prevent the insured from receiving double compensation – once from the insurer and again from the third party. This concept reinforces the idea that the liability for the loss lies with the party responsible for the incident, rather than the insurer bearing the full cost of the claim.

In contrast, options related to reimbursement of patients, evaluating health risks, or denying claims do not accurately describe subrogation, as they each pertain to different aspects of insurance practices and do not involve the recovery of funds from a third party responsible for a claim.