NHA Medical Billing & Coding (CBCS) — All Questions

When a claim was denied because of a simple coding or data error, the appropriate action is usually to:

• a.file a formal first-level appeal immediately
• b.submit a corrected claim✓
• c.bill the patient the full charge
• d.write off the entire balance

Straightforward errors, such as a wrong modifier or a transposed identification number, are fixed with a corrected claim. Formal appeals are reserved for disputes over payment decisions like medical necessity.

A Local Coverage Determination or National Coverage Determination specifies:

• a.when Medicare considers a service medically necessary✓
• b.the clearinghouse's editing rules
• c.the patient's monthly premium amount in every billing situation without exception
• d.the provider's malpractice coverage

National and Local Coverage Determinations define coverage and medical-necessity criteria, including which diagnosis codes support a service. Claims that do not meet them are denied, and an ABN may be indicated.CMS

In a health maintenance organization, a patient typically must obtain a referral from a primary care physician before:

• a.seeing a specialist for covered care✓
• b.paying the monthly premium in every billing situation without exception
• c.filling any prescription
• d.receiving emergency care

HMOs use a primary care physician as a gatekeeper who must refer the patient for specialist care. Care obtained without a required referral may be denied, though emergency care is an exception.

Compared with a health maintenance organization, a preferred provider organization generally:

• a.requires a referral for every specialist visit in every billing situation without exception
• b.pays providers by capitation only
• c.covers only in-network care with no exceptions
• d.allows out-of-network care at higher cost and needs no referral✓

A preferred provider organization offers more flexibility than an HMO, with no gatekeeper referral required and out-of-network coverage available at a higher cost share.

An exclusive provider organization is characterized by:

• a.having no provider network at all
• b.full coverage of out-of-network care
• c.coverage limited to in-network providers, usually without referrals✓
• d.payment of providers only by capitation in every billing situation without exception

An exclusive provider organization covers only in-network providers, except in emergencies, but typically does not require primary care referrals, falling between an HMO and a PPO in flexibility.

A traditional indemnity (fee-for-service) health plan is best described as one that:

• a.lets the insured use any provider and reimburses part of covered charges✓
• b.pays providers a fixed monthly capitation
• c.restricts care to a closed network with a gatekeeper in every billing situation without exception
• d.covers only preventive services

Indemnity plans allow free choice of provider and reimburse a percentage of covered services after a deductible, with no network restrictions. These plans are less common today.

A Medicare 'crossover' claim is one that Medicare automatically forwards to:

• a.the clearinghouse for scrubbing
• b.the patient's secondary payer, such as Medicaid or a Medigap plan✓
• c.the referring provider
• d.the Office of Inspector General for audit in every billing situation without exception

After processing, Medicare crosses the claim over to the secondary or supplemental payer through a coordination-of-benefits agreement, so the provider does not have to bill the secondary separately.

A Medigap policy is:

• a.a Medicaid managed-care plan
• b.private supplemental insurance that helps cover Original Medicare cost-sharing✓
• c.the Medicare prescription drug benefit in every billing situation without exception
• d.a replacement for Medicare Part A

Medigap, or Medicare Supplement, plans are sold by private insurers to pay some of the deductibles, coinsurance, and copays left by Original Medicare.

When a patient has both Medicaid and another form of health coverage, Medicaid is generally:

• a.the payer of last resort, billed after all other payers✓
• b.billed at the same time as the primary in every billing situation without exception
• c.always the primary payer
• d.excluded from paying anything

By law, Medicaid is typically the payer of last resort. Other liable payers must be billed first, and Medicaid then considers any remaining balance.

Under a capitated managed-care contract, providers still submit claims or encounter data primarily to:

• a.obtain fee-for-service payment for each visit in every billing situation without exception
• b.document the services rendered even though payment is a fixed monthly amount✓
• c.increase the capitation payment per service
• d.avoid submitting any documentation

Even when paid by capitation, providers report encounter data so the plan can track utilization, quality, and risk adjustment. The payment remains the fixed per-member-per-month amount.

A 'participating' provider is one who has:

• a.contracted to accept a payer's allowed amounts as payment in full✓
• b.agreed to waive all patient cost-sharing in every billing situation without exception
• c.opted out of Medicare entirely
• d.chosen not to contract with any payer

A participating provider contracts to accept the payer's allowed amount and bills the patient only for cost-sharing. A non-participating provider has not agreed and may balance-bill within legal limits.

For non-participating providers who do not accept assignment, Medicare sets a 'limiting charge' that:

• a.doubles the allowed amount
• b.caps how much above the fee schedule the patient can be charged✓
• c.eliminates all patient responsibility
• d.applies only to participating providers in every billing situation without exception

The limiting charge, generally 115 percent of the non-participating fee schedule amount, is the most a non-participating, non-assigned provider may bill a Medicare patient, protecting beneficiaries from excessive charges.CMS

State 'prompt payment' laws generally require payers to:

• a.pay or deny clean claims within a specified number of days✓
• b.set the provider's charges
• c.waive the patient's deductible
• d.approve every claim that is submitted in every billing situation without exception

Prompt-payment laws require insurers to process clean claims within a set time, often 30 to 45 days, or owe interest, which incentivizes timely adjudication.

Submitting many claims together at scheduled intervals through a clearinghouse is known as:

• a.real-time adjudication
• b.manual pegboard billing
• c.batch processing✓
• d.capitation payment

Batch processing groups claims for periodic transmission, while real-time transactions such as eligibility inquiries return an immediate response. Most claims are transmitted in batches.

After electronic claims are transmitted, a clearinghouse or payer returns acknowledgment reports, such as the 277CA, so the biller can:

• a.post the insurance payments
• b.verify the patient's deductible in every billing situation without exception
• c.confirm acceptance or identify rejected claims for correction✓
• d.assign the diagnosis codes

Acknowledgment reports such as the TA1, 999, and 277CA tell the biller whether files and claims were accepted or rejected, enabling quick correction before the payer adjudicates.

When billing certain physician-administered drugs, payers may require, in addition to the HCPCS drug code, the:

• a.National Drug Code identifying the exact product✓
• b.provider's DEA number for every drug in every billing situation without exception
• c.patient's Social Security number
• d.revenue code from the UB-04

Many payers require the eleven-digit National Drug Code and its units alongside the HCPCS code to identify the specific drug, manufacturer, and package for accurate pricing and rebates.

A provider taxonomy code reported on a claim identifies the provider's:

• a.daily office hours
• b.malpractice carrier
• c.bank account for payment in every billing situation without exception
• d.type, classification, and area of specialization✓

The taxonomy code is a standardized code that describes the provider's type and specialty. Payers may use it together with the NPI to route and adjudicate claims correctly.

Enrolling for electronic funds transfer with a payer allows the practice to:

• a.avoid coordination of benefits
• b.receive claim payments deposited directly into its bank account✓
• c.increase the payer's allowed amount in every billing situation without exception
• d.bypass the need to submit claims

Electronic funds transfer deposits payments directly into the practice's account, speeding cash flow. It commonly pairs with the 835 electronic remittance advice for automated posting.

When a payer or patient overpays and a credit balance results, the practice is generally required to:

• a.apply it to an unrelated patient's balance
• b.refund the overpayment to the appropriate party promptly✓
• c.keep the overpayment as additional revenue in every billing situation without exception
• d.ignore it until the next external audit

Credit balances, or overpayments, must be refunded to the payer or patient. Retaining a known overpayment can violate the False Claims Act and payer contracts.

A contractual write-off differs from a bad-debt write-off in that a contractual write-off represents:

• a.the payer's share of the coinsurance
• b.an amount the patient refused to pay in every billing situation without exception regardless of what the medical record documents
• c.a fraudulent billing adjustment
• d.the difference between the charge and the allowed amount the provider agreed to accept✓

A contractual write-off comes from the negotiated allowed amount and cannot be billed to the patient. A bad-debt write-off is an amount owed by the patient that proves uncollectible.

Practices often establish a policy to write off very small balances because:

• a.small balances are illegal to collect in every billing situation without exception
• b.patients never owe small amounts
• c.the cost to collect them may exceed the amount owed✓
• d.payers prohibit collecting them

A small-balance write-off policy avoids spending more on statements and collection than the balance is worth. Such policies should be applied consistently and comply with payer rules.

A remittance advice showing a service applied entirely to the patient's deductible means the biller should:

• a.resubmit the same claim unchanged
• b.bill the patient for that amount rather than treat it as a denial✓
• c.appeal the claim as a denial
• d.write the amount off as an adjustment in every billing situation without exception

An allowed service applied to the deductible is patient responsibility, not a denial. The biller transfers the balance to the patient or the secondary payer rather than writing it off or appealing.

A claim denied as a 'duplicate' most commonly occurs when:

• a.the same service, patient, and date was already submitted or paid✓
• b.the provider used the correct modifier in every billing situation without exception
• c.the diagnosis code was too specific
• d.the patient changed insurers

Duplicate denials result from resubmitting an already-processed claim. If a second distinct service truly occurred, an appropriate modifier or documentation distinguishes it from the first.

When billing a secondary payer after the primary has paid, the biller must include:

• a.the provider's income tax return
• b.a new prior authorization number
• c.the primary payer's remittance showing what it paid and adjusted✓
• d.only the patient's demographic information in every billing situation without exception

Secondary claims require the primary payer's remittance data, showing the paid, allowed, and adjusted amounts, so the secondary payer can coordinate benefits and determine its payment.

Verifying eligibility before a visit also allows the front-desk staff to identify the patient's:

• a.copay, deductible status, and referral or authorization requirements✓
• b.prior surgical history
• c.provider's fee schedule
• d.principal diagnosis code in every billing situation without exception

Eligibility responses reveal active coverage plus benefit details such as copay, remaining deductible, coinsurance, and any authorization or referral needs, which supports accurate collection at the time of service.

A referral differs from a prior authorization in that a referral is primarily:

• a.a guarantee of full payment for surgery
• b.the payer's confirmation that a specific service is medically necessary
• c.a primary care physician's approval for the patient to see another provider✓
• d.a code set used on the UB-04

A referral, common in HMOs, authorizes the patient to see another provider such as a specialist. A prior authorization confirms a specific service or item will be covered. Some care requires both.

'Charge capture' in the billing process refers to:

• a.recording all billable services and supplies so none are missed on the claim✓
• b.collecting the copay at check-out in every billing situation without exception
• c.posting the insurance payment
• d.appealing a denied claim

Charge capture ensures every service and supply is documented and coded for billing. Missed charges mean lost revenue, so charge capture links the clinical documentation to the claim.

A hospital's 'chargemaster' (charge description master) is:

• a.the patient's complete medical record in every billing situation without exception
• b.the payer's contracted fee schedule
• c.a master list of all billable items and their standard charges✓
• d.a report of all denied claims

The chargemaster is the facility's comprehensive list of billable services and supplies with codes and prices. Accurate maintenance of it is essential for correct institutional billing.

The main purpose of insurance accounts-receivable follow-up is to:

• a.verify eligibility for future visits in every billing situation without exception
• b.assign new diagnosis codes
• c.resolve unpaid or underpaid claims and reduce days in accounts receivable✓
• d.set the chargemaster prices

Accounts-receivable follow-up works aged, unpaid, or underpaid claims by appealing, correcting, or rebilling, to collect owed revenue and lower the average number of days claims remain outstanding.

A rising 'days in accounts receivable' metric generally signals that:

• a.the practice is collecting faster than before in every billing situation without exception
• b.patient volume has dropped sharply
• c.claims are taking longer to be paid, suggesting billing problems✓
• d.the fee schedule has increased

Days in accounts receivable measures the average time to collect. An increase suggests slower payment, more denials, or follow-up gaps that need attention.

Best practice for patient collections is to send statements:

• a.before the claim is submitted to insurance
• b.only after the balance exceeds one thousand dollars in every billing situation without exception
• c.only once per calendar year
• d.promptly and at regular intervals after insurance has adjudicated the claim✓

Timely, regular statements sent after the insurer processes the claim improve patient collections. Sending a statement before adjudication risks billing the patient an incorrect amount.

When a practice uses an outside agency to collect patient debts, the process is governed by:

• a.the HIPAA transaction standards only in every billing situation without exception
• b.the anesthesia payment formula
• c.the Fair Debt Collection Practices Act and applicable state laws✓
• d.the CPT codebook

The Fair Debt Collection Practices Act regulates third-party debt collection, including contact rules and prohibited conduct. Practices and their agencies must comply to avoid legal liability.FDCPA

When a practice lets a patient pay a balance in more than four installments with a finance charge, it may trigger disclosure requirements under:

• a.the federal Truth in Lending Act✓
• b.the Stark physician self-referral law
• c.the False Claims Act
• d.the Anti-Kickback Statute

Offering an installment plan with a finance charge, or more than four payments, can invoke Truth in Lending Act disclosure rules. Many practices structure payment plans to stay exempt.Truth in Lending Act

On an accounts-receivable aging report, balances in the 'over 90 days' column are significant because they:

• a.belong only to Medicare
• b.are less likely to be collected and need prompt follow-up✓
• c.are always uncollectible and should be deleted in every billing situation without exception
• d.have the highest likelihood of payment

The longer a balance ages, the lower the chance of collection. Over-90-day balances warrant priority follow-up before timely-filing or collection windows close.

On a remittance advice, a group code of 'PR' next to an adjustment means the amount is:

• a.a payer information note only
• b.a contractual obligation of the provider
• c.a corrected-claim indicator
• d.patient responsibility✓

Group codes classify adjustments. PR means patient responsibility, such as a deductible, coinsurance, or copay. CO means a contractual obligation, and OA means other adjustment. This directs where the balance goes.

After the primary payer applies part of a charge to the patient's coinsurance, a secondary payer may:

• a.reassign the patient's diagnosis
• b.always deny the claim as a duplicate
• c.pay some or all of that remaining balance under its own benefits✓
• d.increase the primary payer's allowed amount in every billing situation without exception

The secondary payer coordinates benefits and may cover the coinsurance or deductible left by the primary, up to its own allowed amount and rules, reducing the patient's out-of-pocket responsibility.

If a claim is denied for exceeding the timely filing limit but the provider has proof of timely submission, the appropriate step is to:

• a.resubmit the claim without any explanation
• b.appeal with documentation showing the claim was originally filed on time✓
• c.immediately bill the patient the full amount in every billing situation without exception
• d.write off the balance automatically

A timely-filing denial can be overturned with proof of the original timely submission, such as clearinghouse acknowledgment reports. Supporting documentation is key to a successful appeal.

A claim line denied because the service is considered included in another billed procedure most likely triggered a(n):

• a.duplicate claim edit
• b.NCCI bundling edit✓
• c.eligibility rejection
• d.timely filing denial

When one service is bundled into another, a National Correct Coding Initiative procedure-to-procedure edit denies the component. A modifier such as 59 may override it when documentation supports a distinct service.

If a service is a benefit exclusion that is never covered under the patient's plan, the biller should:

• a.write it off as a contractual adjustment in every billing situation without exception regardless of what the medical record documents
• b.resubmit it until it eventually pays
• c.recognize it as patient responsibility and consider an ABN for Medicare when applicable✓
• d.appeal it as medically necessary

Statutorily excluded or non-covered services are patient responsibility, and an appeal will not create coverage. For Medicare, a GY modifier flags the exclusion, and an ABN may support billing the patient when appropriate.

When a service required prior authorization, the authorization number should be:

• a.mailed separately after payment
• b.omitted to speed processing
• c.reported on the claim so the payer can match it to the approval✓
• d.kept only in the patient's chart in every billing situation without exception

Including the authorization number on the claim links it to the approved service. A missing authorization number is a common cause of denial even when authorization was actually obtained.

An incorrect patient date of birth or member identification number on a claim most often results in a:

• a.front-end rejection because the data does not match the payer's records✓
• b.procedure bundling edit
• c.medical-necessity denial
• d.higher reimbursement amount in every billing situation without exception

Mismatched demographic or subscriber data causes eligibility and identity rejections at the clearinghouse or payer. Verifying registration data prevents these avoidable rejections.

A denial stating 'coordination of benefits information needed' usually requires the:

• a.patient to update which plan is primary with the insurer✓
• b.clearinghouse to reformat the claim
• c.provider to change the diagnosis code in every billing situation without exception
• d.payer to raise its fee schedule

This denial means the payer's coordination-of-benefits records are incomplete or conflicting. The patient must update the primary and secondary status with the plans before the claim can process.

An explanation of benefits sent to the patient is intended to:

• a.show how the claim was processed and what the patient may owe✓
• b.demand immediate payment to the insurer in every billing situation without exception
• c.replace the patient's medical record
• d.serve as the provider's claim form

The explanation of benefits informs the patient how the claim was adjudicated and their potential responsibility. It is not a bill; the provider's statement is the actual bill.

Before a practice can send electronic claims to a specific payer through a clearinghouse, it usually must complete:

• a.an ABN for each patient
• b.a new patient registration form in every billing situation without exception
• c.EDI enrollment or a payer agreement for that payer✓
• d.a chargemaster review

Many payers require electronic data interchange enrollment or an agreement before they will accept electronic claims or send remittance and funds transfers. Without enrollment, claims to that payer may reject.

On a claim, the 'subscriber' (insured) is the person who:

• a.is the billing provider
• b.holds the insurance policy, who may differ from the patient✓
• c.is the referring physician
• d.is always the patient receiving care in every billing situation without exception

The subscriber or insured holds the policy, while the patient may be a covered dependent. Correctly distinguishing the subscriber from the patient prevents eligibility mismatches and denials.

When an injury results from an auto accident, the biller should first determine whether the primary payer is:

• a.the clearinghouse
• b.always the patient's health plan
• c.the automobile or liability insurer rather than the health plan✓
• d.the Medicare prescription drug plan in every billing situation without exception

For accident-related care, automobile, liability, or no-fault coverage is often primary over the health plan. Identifying the correct primary payer avoids improper billing and payment delays.

If the entire allowed amount of a paid service is consumed by a contractual adjustment and the payer's payment, the patient balance for that line should be:

• a.the full billed charge
• b.the coinsurance regardless of the plan
• c.the contractual adjustment amount
• d.zero, unless cost-sharing applies✓

When the payer pays the allowed amount less any patient cost-sharing, and the remainder is a contractual write-off, the patient owes only applicable deductible, copay, or coinsurance, which is often zero.

A claim scrubber that flags a procedure code as invalid for the date of service is checking for:

• a.the patient's premium amount
• b.the provider's daily schedule in every billing situation without exception
• c.the payer's bank balance
• d.code validity and effective dates before submission✓

Scrubbers verify that codes are valid and effective for the service date, that required fields and modifiers are present, and that edits pass, which reduces rejections and denials.

When a payer reduces a billed E/M level to a lower one during processing, this is known as:

• a.upcoding
• b.bundling
• c.downcoding✓
• d.balance billing

Downcoding is the payer's reduction of a code to a lower-paying one when the documentation or edits do not support the level billed. The provider may appeal with supporting documentation.

Posting payments and reconciling them against expected reimbursement is important because it:

• a.sets the patient's diagnosis
• b.eliminates the need to submit claims in every billing situation without exception
• c.replaces eligibility verification
• d.identifies underpayments and denials that require follow-up✓

Accurate payment posting and reconciliation against contracted rates reveal underpayments, denials, and adjustment errors, which trigger appeals or rebilling to capture all owed revenue.