NHA Medical Billing & Coding (CBCS) — All Questions

An Accountable Care Organization (ACO) is a group of providers that:

• a.Shares responsibility for the cost and quality of care✓
• b.Sells insurance policies directly to patients
• c.Processes and forwards electronic claims as a clearinghouse
• d.Sets the national Medicare conversion factor

An ACO coordinates care for an assigned population and may share in savings when it meets cost and quality targets. It is a value-based arrangement rather than an insurer or clearinghouse. Shared accountability aligns incentives toward efficiency.

A 'per diem' reimbursement arrangement pays a facility:

• a.A percentage of the physician's professional fee
• b.An amount based solely on the patient's deductible
• c.One flat fee for the entire admission regardless of length of stay
• d.A fixed amount for each day the patient is hospitalized✓

Per diem pays a set rate for each inpatient day, so total payment scales with length of stay. It differs from a DRG, which pays one amount per discharge, and from fee-for-service. Payers use per diem in some facility contracts.

When a patient has primary and secondary insurance, the secondary payer generally:

• a.Pays first, before the primary payer processes the claim
• b.Refuses to process the claim at all
• c.Automatically pays the full billed charge
• d.Considers the balance after the primary pays✓

The primary payer adjudicates first, and the secondary then considers remaining patient responsibility within its own rules and allowed amount. Coordination of benefits prevents total payment above the allowed charge. Correct order avoids denials and overpayment.

When a patient has both Medicaid and other coverage, Medicaid is generally:

• a.Always the primary payer on every claim
• b.Prohibited from paying anything at all
• c.The payer of last resort✓
• d.Responsible for the full billed charge first

By law Medicaid pays last, so all other liable payers are billed before Medicaid. Billing Medicaid before other coverage causes denials or recoupment. This 'payer of last resort' rule protects Medicaid funds.CMS

For an employed Medicare beneficiary age 65 or older who is covered by a large employer's group health plan, the primary payer is usually:

• a.The patient, who must pay the full amount first
• b.The employer group health plan, with Medicare paying secondary✓
• c.Medicare, which always pays first for beneficiaries over 65
• d.Medicaid, acting as the payer of last resort

Under the Medicare Secondary Payer 'working aged' rule, a large-employer group health plan is primary and Medicare is secondary. Billing Medicare first in this situation is improper. Verifying other coverage prevents MSP errors.CMS

A claim has an allowed amount of $200. The primary payer paid $120 and applied $80 to patient coinsurance. If the secondary plan also allows $200 and covers coinsurance, the secondary generally pays up to:

• a.$200, paying the full allowed amount a second time
• b.$80, the remaining patient responsibility✓
• c.$0, because a primary payer already paid something
• d.$120, exactly matching the primary payment

The secondary considers the $80 left as patient responsibility, subject to its own rules, so combined payments do not exceed the allowed amount. This is how coordination of benefits prevents overpayment. The patient may owe nothing if the secondary covers the balance.

The main purpose of coordination of benefits is to:

• a.Ensure total payments do not exceed the allowed charge✓
• b.Increase the provider's contracted fee schedule
• c.Let the patient select any diagnosis they prefer
• d.Guarantee the provider is paid twice for one service

Coordination of benefits establishes payment order and limits total reimbursement to the allowed amount. It prevents duplicate payment when a patient has more than one policy. Accurate COB reduces overpayments and refunds.

In a family health plan, the 'family deductible' is:

• a.The same figure as each member's flat copay
• b.A fee charged only to the youngest dependent
• c.A combined threshold after which the plan pays for the family✓
• d.The amount the provider is required to write off at each visit

Many plans include both individual and family deductibles; once the family deductible is met, cost-sharing begins for all members even if some never met their individual deductible. Knowing which deductible applies helps collect the right amount. It differs from copays and coinsurance.

If a service is specifically excluded (non-covered) under the patient's plan, the patient is generally:

• a.Entitled to have the provider write off the entire charge
• b.Covered at the standard in-network rate
• c.Not responsible for any part of the payment
• d.Responsible for the full charge, since the plan pays nothing✓

A non-covered (excluded) service is not a plan benefit, so the patient owes the full amount. This differs from a covered service that is denied for other reasons. Informing the patient in advance supports collection and transparency.

The most effective time to collect a patient copayment is:

• a.When the account has already reached collections
• b.At the time of service, during check-in or checkout✓
• c.Solely after the deductible is fully satisfied
• d.Only after the claim has been denied

Copays are due at the time of service, and collecting then improves cash flow and lowers bad debt. Waiting until after billing makes collection harder and costlier. Point-of-service collection is a revenue-cycle best practice.

Collecting known patient responsibility at the point of service primarily helps the practice by:

• a.Increasing the Medicare conversion factor
• b.Eliminating the need to file any claim
• c.Reducing bad debt and the cost of billing patients later✓
• d.Raising the payer's contracted allowed amount for the services

Point-of-service collection captures money while the patient is present, cutting later statement and collection costs. Balances left to bill after the visit are harder to collect. It lowers accounts receivable and bad debt.

A patient has $200 left on the deductible. A service has an allowed amount of $700 with 20% coinsurance applied after the deductible. Total patient responsibility is:

• a.$700
• b.$140
• c.$200
• d.$300✓

The patient first pays the $200 deductible, leaving $500 of the allowed amount subject to coinsurance. Twenty percent of $500 is $100, so total responsibility is $200 + $100 = $300. The payer pays the remaining $400.

A service has an allowed amount of $450, the deductible is already met, and coinsurance is 30%. The patient owes:

• a.$135✓
• b.$150
• c.$315
• d.$450

Coinsurance is calculated on the allowed amount, so 0.30 x $450 = $135. The payer covers the remaining 70 percent, or $315. Coinsurance is always a percentage of the allowed amount, not the billed charge.

A participating provider bills $1,500 and the payer's allowed amount is $900. The contractual write-off is:

• a.$600✓
• b.$1,500
• c.$900
• d.$300

A participating provider accepts the allowed amount as payment in full, so the write-off is $1,500 - $900 = $600. That contractual adjustment cannot be billed to the patient. Only cost-sharing based on the $900 allowed amount is collectible.

Two procedures are performed in one session. The primary is allowed at $1,000 (100%) and the second is subject to a 50% multiple-procedure reduction on its $600 allowed amount. The total allowed is:

• a.$800
• b.$1,600
• c.$1,500
• d.$1,300✓

The second procedure is reduced by 50 percent, so $600 becomes $300, and the total allowed is $1,000 + $300 = $1,300. Multiple-procedure reductions apply to the lesser procedures in a session. The primary procedure is paid at full allowed amount.

A patient has reached the plan's out-of-pocket maximum for the year. For the next covered, in-network service the patient generally owes:

• a.Only the contractual write-off portion
• b.The full billed charge for the service, because the maximum resets at each visit
• c.The usual 20% coinsurance amount
• d.Nothing, since the plan then pays 100% of covered services✓

Once the out-of-pocket maximum is met, the plan pays 100 percent of covered in-network services for the rest of the benefit period. Premiums still apply but do not count toward the maximum. Verifying this helps set correct patient expectations.

An account moved to 'bad debt' differs from a 'charity' write-off in that bad debt is:

• a.The same thing as a patient copayment
• b.An amount deemed uncollectible after real collection efforts✓
• c.Always rebilled to the insurance payer
• d.A contractual adjustment that the payer requires to be written off

Bad debt is written off when the practice cannot collect despite reasonable effort, while charity (financial assistance) is granted intentionally based on documented need. Both remove a balance but for different reasons. Consistent policies govern each.

The federal Fair Debt Collection Practices Act (FDCPA) primarily regulates:

• a.How providers assign CPT procedure codes
• b.The layout of the CMS-1500 claim form
• c.The Medicare physician fee schedule amounts
• d.The conduct of third-party debt collectors✓

The FDCPA restricts abusive or deceptive practices by third-party debt collectors, which affects how overdue medical balances may be pursued. It generally targets outside collection agencies rather than the original creditor. Compliance protects patients and the practice.FDCPA

Under the Affordable Care Act, an identified overpayment from Medicare or Medicaid generally must be reported and returned within:

• a.The following calendar year only
• b.24 hours of receiving any payment
• c.60 days of identifying the overpayment✓
• d.10 years of the date of service

The ACA requires reporting and returning an identified overpayment within 60 days. Keeping a known overpayment past that window can create False Claims Act liability. Prompt refunds are a compliance necessity.CMS

A 'credit balance' on a patient account usually means that:

• a.The claim has not yet been submitted to the payer
• b.The account was overpaid and a refund or adjustment may be owed✓
• c.The patient still owes an additional amount on the account balance
• d.The provider undercharged for the service

A credit balance signals overpayment, often from a duplicate payment or combined primary and secondary payments. Credit balances must be reviewed and resolved, and Medicare uses the CMS-838 credit balance report. Ignoring them creates compliance risk.

If both primary and secondary insurers pay and the combined payment exceeds the allowed amount, the provider should:

• a.Bill the patient for the difference
• b.Refund the overpayment to the correct party✓
• c.Keep the extra amount as additional revenue
• d.Ignore it as long as the amount is small

Payments exceeding the allowed amount create a credit balance that must be refunded to the correct party. Retaining a known overpayment can trigger False Claims Act exposure. Coordination of benefits limits total payment to the allowed amount.

A 'contractual adjustment' on a participating provider's account represents:

• a.An amount the payer still owes the provider after the patient coinsurance is applied
• b.The patient's coinsurance obligation
• c.The charge above the allowed amount, written off per contract✓
• d.A penalty assessed for late filing

The contractual adjustment is the portion of the charge above the contracted allowed amount that a participating provider agrees to write off. It is not billable to the patient. Only deductible, copay, or coinsurance based on the allowed amount is collectible.

A 'predetermination of benefits' obtained from a payer is:

• a.The final remittance advice for the claim
• b.An advance estimate of what the plan will likely cover✓
• c.A demand for immediate full payment directly from the patient
• d.A binding guarantee of full payment

A predetermination estimates coverage before a service is rendered, helping set patient expectations. Unlike some prior authorizations, it is generally not a payment guarantee. Final payment still depends on eligibility and claim adjudication.

Sending patients periodic statements for balances remaining after insurance has paid is part of:

• a.The charge-capture step
• b.Front-end patient registration
• c.The back-end collections process of the revenue cycle✓
• d.Insurance eligibility verification performed during front-end registration

Patient billing and collections occur on the back end, after claims are adjudicated and payments posted. Statements show the balance the patient owes. Effective follow-up here improves cash flow and reduces bad debt.

Practices often set a 'small balance write-off' threshold because:

• a.Collecting small balances is prohibited by law
• b.Doing so increases the contracted allowed amount
• c.Payers legally require all small balances to be waived
• d.The cost of billing tiny balances can exceed the amount owed✓

Writing off very small balances under a consistent policy avoids spending more on statements than the balance is worth. The policy must be applied uniformly, not selectively. Routine waiver of cost-sharing, however, can raise compliance concerns.

Routinely waiving Medicare patient copayments and deductibles without a genuine financial-hardship determination can:

• a.Have no compliance implications whatsoever
• b.Violate fraud and abuse laws by inducing use of services✓
• c.Always be required under the HIPAA Privacy Rule
• d.Increase the Medicare-approved amount for the service

Routine, blanket waiver of cost-sharing can be viewed as an unlawful inducement and can misstate the actual charge to Medicare. Case-by-case waivers based on documented hardship are permitted. Blanket waivers are a recognized fraud and abuse risk.CMS

A retrospective (cost-based) reimbursement method pays the provider:

• a.After services are delivered, based on the costs actually incurred✓
• b.A fixed amount set before any care is given
• c.A single monthly rate per enrolled member
• d.Nothing at all until the patient reaches the out-of-pocket maximum

Retrospective, cost-based payment reimburses providers after the fact for allowable costs. Prospective systems such as DRGs and APCs instead set rates in advance. The prospective model shifts more financial risk to the provider.

Billing a routine follow-up visit that falls within a surgery's global period will typically result in:

• a.An automatic increase in the assigned inpatient DRG weight
• b.A denial, since routine post-op care is already bundled✓
• c.A refund issued to the patient
• d.A separate full payment for the follow-up visit

The global surgical package includes routine postoperative care, so related follow-up visits are not paid separately during the global period. Unrelated care or a return to the operating room may be billed with an appropriate modifier. Otherwise the visit is denied as included.

In some managed-care contracts, a 'withhold' is:

• a.The patient's coinsurance amount
• b.A financial penalty charged to the patient
• c.An extra bonus automatically added to every claim
• d.Payment held back, returned only if targets are met✓

A withhold reserves part of the provider's payment, released only if cost or quality goals are achieved. It aligns provider behavior with the plan's targets in risk arrangements. Failing to meet targets can forfeit the withheld amount.

The 'paid amount' on a remittance differs from the 'allowed amount' because the paid amount:

• a.The allowed amount minus patient responsibility✓
• b.Includes the contractual write-off portion
• c.Equals the provider's full billed charge
• d.Is always larger than the allowed amount

The allowed amount is the maximum the payer recognizes, while the paid amount is what the payer actually sends after subtracting deductible, copay, and coinsurance. The remaining patient responsibility is billed to the patient or a secondary payer. Reconciling the two ensures correct posting.

If a claim is denied solely for exceeding the payer's timely-filing limit, the balance usually:

• a.Increases the provider's contracted fee schedule
• b.Must be paid in full by the patient
• c.Cannot be billed to the patient; it is a provider loss✓
• d.Is automatically reprocessed and paid

Missing the timely-filing deadline is generally the provider's error, so the amount is not patient responsibility and becomes a write-off. Tracking deadlines prevents this avoidable revenue loss. Some payers allow appeals with proof of timely submission.

Verifying eligibility and benefits before a visit supports reimbursement mainly by:

• a.Eliminating the need to submit a claim
• b.Assigning the diagnosis codes for the encounter
• c.Confirming coverage and cost-sharing before the visit✓
• d.Setting the hospital's inpatient DRG weight

Eligibility verification, often via the 270/271 transactions, confirms active coverage and reveals copays, deductibles, and authorization requirements. This front-end step reduces denials and clarifies what to collect. It protects revenue before services are rendered.

A provider bills $1,000; the allowed amount is $400; the deductible is met and coinsurance is 20%. The patient's coinsurance is:

• a.$400
• b.$120
• c.$200
• d.$80✓

Coinsurance is 20 percent of the allowed amount, so 0.20 x $400 = $80. The $600 difference between the billed charge and the allowed amount is a contractual write-off. The payer pays the remaining $320 of the allowed amount.