CSLB General Building (B) — All Questions

The CMS-1500 claim form is used primarily to bill for:

• a.Inpatient hospital facility charges
• b.Professional services rendered by physicians and other non-institutional providers✓
• c.Pharmacy prescriptions filled at a retail counter
• d.Ambulance mileage only

The CMS-1500 is the standard paper claim form for physician and other professional (non-institutional) services submitted to Medicare, Medicaid, and many commercial payers. Its electronic equivalent is the 837P transaction. Institutional charges, such as hospital facility fees, are billed on the UB-04 instead.

The UB-04 (CMS-1450) claim form is used to bill for:

• a.Individual physician office visits only
• b.Durable medical equipment sold at retail
• c.Institutional and facility services such as hospital and skilled nursing care✓
• d.Dental cleanings

The UB-04, also called the CMS-1450, is the standard claim form for institutional providers such as hospitals, skilled nursing facilities, and home health agencies. Its electronic counterpart is the 837I transaction. It captures facility-specific data such as revenue codes and type-of-bill codes not found on the CMS-1500.

A 'clean claim' is best defined as a claim that:

• a.Contains all required, accurate information and can be processed without additional data from the provider✓
• b.Has been denied and resubmitted at least once
• c.Is submitted on paper rather than electronically
• d.Includes only the diagnosis codes without procedure codes

A clean claim has no defects, errors, or missing information and does not require the payer to seek additional documentation to adjudicate it. Clean claims are paid faster and are central to healthy cash flow. Scrubbing claims before submission increases the clean-claim rate.

Claim 'scrubbing' refers to the process of:

• a.Deleting a patient's record after payment
• b.Manually mailing claims to payers
• c.Negotiating fees with the insurance company
• d.Reviewing claims for errors and missing data before submission to reduce rejections and denials✓

Scrubbing is the automated or manual review of claims to catch coding errors, missing fields, and formatting problems before they reach the payer. Correcting issues upfront improves the clean-claim rate and speeds reimbursement. Scrubber software often flags NCCI edit conflicts and invalid code combinations.

A remittance advice (RA) or explanation of benefits (EOB) is a document that:

• a.Requests prior authorization for a service
• b.Explains how a claim was adjudicated, including payments, adjustments, and denials✓
• c.Lists the provider's entire fee schedule
• d.Serves as the patient's insurance card

A remittance advice (sent to the provider) or explanation of benefits (sent to the patient) details how each claim line was processed, showing amounts allowed, paid, adjusted, and any patient responsibility. Billers use the RA to post payments and identify denials for follow-up. Reason and remark codes on the RA explain adjustments.

When a claim is denied, the first appropriate step for a billing specialist is usually to:

• a.Immediately write off the balance
• b.Bill the entire amount to the patient
• c.Review the denial reason on the remittance advice to determine the cause✓
• d.Resubmit the identical claim without changes

Understanding why a claim was denied is essential before taking corrective action; the remittance advice provides reason and remark codes that explain the denial. Some denials require correcting and resubmitting the claim, while others require a formal appeal. Blindly resubmitting an unchanged claim usually results in another denial.

The difference between a claim rejection and a claim denial is that a rejection:

• a.Occurs before adjudication due to errors and can be corrected and resubmitted, while a denial occurs after the payer processes the claim✓
• b.Always results in full payment
• c.Can never be corrected
• d.Only happens with paper claims

A rejected claim never entered the payer's adjudication system, typically because of missing or invalid data, and can be fixed and resubmitted as a new claim. A denied claim was processed but payment was refused, and it generally must be appealed or corrected through the payer's formal process. Distinguishing the two guides the correct follow-up path.

Medicare Part A primarily covers:

• a.Physician office visits
• b.Outpatient prescription drugs
• c.Vision and dental care
• d.Inpatient hospital, skilled nursing facility, hospice, and some home health care✓

Medicare Part A is hospital insurance covering inpatient hospital stays, skilled nursing facility care, hospice, and limited home health services. Part B covers outpatient and physician services, and Part D covers prescription drugs. Knowing which part applies is essential for correct claim routing.

Medicare Part B primarily covers:

• a.Physician services, outpatient care, preventive services, and durable medical equipment✓
• b.Inpatient hospital room and board only
• c.Long-term custodial nursing home care
• d.All prescription drugs picked up at a pharmacy

Medicare Part B is medical insurance covering physician services, outpatient hospital care, preventive services, laboratory tests, and durable medical equipment. Beneficiaries typically pay a monthly premium and an annual deductible, then coinsurance. Part B is the source of most professional-service claims billed on the CMS-1500.

Medicare Part C is also known as:

• a.Original fee-for-service Medicare
• b.Medicare Advantage, offered through private plans that bundle Parts A and B and often D✓
• c.The Medicare prescription drug benefit only
• d.Medicaid for low-income beneficiaries

Medicare Part C, or Medicare Advantage, is offered by private insurers approved by Medicare and combines the benefits of Parts A and B, frequently adding drug coverage and extra benefits. These plans may have their own networks and prior-authorization rules. Claims for Part C members go to the private plan, not directly to traditional Medicare.

Medicare Part D provides coverage for:

• a.Inpatient surgery
• b.Emergency ambulance transport
• c.Outpatient prescription drugs✓
• d.Skilled nursing facility stays

Medicare Part D is the outpatient prescription drug benefit, offered through private plans that contract with Medicare. Beneficiaries choose a stand-alone drug plan or receive drug coverage bundled in a Medicare Advantage plan. Formularies and cost-sharing tiers vary by plan.

Medicaid is a program that is:

• a.Funded solely by the federal government with uniform rules nationwide
• b.Available only to people over age 65 regardless of income
• c.A private commercial insurance plan
• d.Jointly funded by federal and state governments to serve eligible low-income individuals, with state-specific rules✓

Medicaid is a joint federal-state program providing coverage to qualifying low-income individuals and families, with eligibility and benefits varying by state. When a patient has both Medicare and Medicaid, Medicaid is generally the payer of last resort. Billers must follow each state's specific Medicaid guidelines.

Workers' compensation insurance covers:

• a.Job-related injuries and illnesses arising out of employment✓
• b.Routine preventive care unrelated to work
• c.Cosmetic procedures
• d.A patient's dependents' medical care

Workers' compensation is a state-regulated program that pays for medical care and lost wages when an employee is injured or becomes ill because of their job. Claims are billed to the workers' compensation carrier, not the patient's health plan. These claims often require an injury date, employer information, and a claim number.

TRICARE is the health program that covers:

• a.Only civilian federal employees
• b.Active-duty and retired members of the uniformed services and their families✓
• c.Low-income adults under Medicaid expansion
• d.Railroad retirees exclusively

TRICARE provides health coverage for active-duty service members, retirees, and their eligible family members and survivors. It offers several plan options with differing cost shares and network rules. Billers must verify the specific TRICARE plan and follow its authorization and filing requirements.

Coordination of benefits (COB) is the process used to:

• a.Determine the patient's diagnosis
• b.Set the provider's charge for a service
• c.Determine the order in which multiple insurance plans pay when a patient has more than one coverage✓
• d.Assign CPT modifiers

Coordination of benefits establishes which plan is primary and which is secondary when a patient is covered by more than one policy, preventing duplicate payment beyond the total charge. The primary plan pays first, and the secondary may cover remaining allowed amounts. Correct COB prevents overpayment and reduces denials.

Under the 'birthday rule' for coordinating benefits on a dependent child covered by both parents' plans, the primary plan is generally the one belonging to the parent whose:

• a.Policy is the most expensive
• b.Employer is largest
• c.Coverage started most recently
• d.Birthday falls earlier in the calendar year✓

The birthday rule states that when a child is covered under both parents' plans, the plan of the parent whose birthday (month and day) comes first in the calendar year is primary. The year of birth is not considered. This common COB rule helps payers consistently decide the order of payment.

Timely filing limits refer to:

• a.The deadline by which a claim must be submitted to the payer to be considered for payment✓
• b.The time a provider has to see a patient
• c.The number of days a patient has to pay a bill
• d.The waiting period before coverage begins

Each payer sets a timely filing limit, the maximum time after the date of service within which a claim must be received. Claims submitted after the deadline are typically denied, and the balance often cannot be billed to the patient. Tracking these limits is essential to avoid preventable revenue loss.

On the CMS-1500 form, the National Provider Identifier (NPI) is used to:

• a.Identify the patient's diagnosis
• b.Uniquely identify the rendering or billing provider✓
• c.List the patient's copayment
• d.Record the date the claim was paid

The NPI is a standardized ten-digit identifier assigned to covered health care providers and required on claims to identify the billing and rendering providers. It replaced older, payer-specific provider numbers. Missing or invalid NPIs are a common cause of claim rejections.

The electronic equivalent of the paper CMS-1500 professional claim is the:

• a.837I transaction
• b.835 remittance transaction
• c.837P transaction✓
• d.270 eligibility inquiry

The 837P is the HIPAA standard electronic transaction for professional claims, corresponding to the paper CMS-1500. The 837I is the institutional version corresponding to the UB-04, and the 835 is the electronic remittance advice. Using the correct transaction format is required for electronic data interchange with payers.

Prior authorization (precertification) is:

• a.Payment made before a service
• b.A patient's written consent to treatment
• c.The final step after a claim is paid
• d.Approval obtained from the payer before a service to confirm it will be covered✓

Prior authorization is the payer's advance approval that a planned service or item is medically necessary and covered, often required for imaging, surgeries, and certain drugs. Failing to obtain required authorization commonly leads to denial. It is separate from, and does not guarantee, final payment.

Verifying a patient's insurance eligibility before the visit helps to:

• a.Confirm active coverage and benefits, reducing the risk of denials✓
• b.Increase the provider's fee schedule
• c.Change the patient's diagnosis
• d.Eliminate the need for coding

Eligibility verification confirms that the patient has active coverage, identifies the plan's benefits, and reveals copay, deductible, and authorization requirements before services are rendered. Doing this upfront prevents avoidable denials and helps collect patient responsibility. The HIPAA 270/271 transactions support electronic eligibility inquiries and responses.

The 'place of service' code on a professional claim indicates:

• a.The patient's home address
• b.The setting where the service was provided, such as office, hospital, or telehealth✓
• c.The provider's specialty
• d.The amount the payer will reimburse

The place of service code tells the payer where the service occurred, such as an office, inpatient hospital, emergency department, or the patient's home. It affects reimbursement because payment can vary by setting. An incorrect place of service code can cause denials or incorrect payment.

Which item is generally required for a clean professional claim?

• a.The provider's personal bank account number
• b.The patient's employer performance review
• c.Valid diagnosis and procedure codes with supporting patient and insurance information✓
• d.A photograph of the patient

A clean claim requires accurate patient demographics, insurance information, provider identifiers, and valid diagnosis and procedure codes that support medical necessity. Missing or mismatched data is a leading cause of rejections. Verifying these elements before submission maximizes first-pass acceptance.

An appeal of a denied claim is:

• a.An automatic payment reversal
• b.A request to change the patient's diagnosis
• c.A way to increase the fee schedule
• d.A formal request asking the payer to reconsider its decision, often with supporting documentation✓

An appeal is the provider's formal challenge to a payer's adverse determination, typically supported by medical records, corrected coding, or a letter of medical necessity. Payers set deadlines and levels for appeals that must be followed. A well-documented appeal can overturn denials for services that were actually covered.

The term 'assignment of benefits' means that the patient:

• a.Authorizes the insurance payment to go directly to the provider✓
• b.Assigns their deductible to another patient
• c.Transfers the claim to a collection agency
• d.Waives all coverage

Assignment of benefits is the patient's authorization directing the insurer to pay the provider directly rather than reimbursing the patient. It is commonly documented at registration and referenced on the claim. Without it, payment may be sent to the patient, complicating collection.

When Medicare is the secondary payer (MSP), it means that:

• a.Medicare always pays first
• b.Another insurer is responsible for paying before Medicare✓
• c.The patient has no other coverage
• d.The claim cannot be submitted electronically

Medicare Secondary Payer rules apply when another payer, such as an employer group health plan or a liability insurer, has primary responsibility. In those cases the primary payer is billed first, and Medicare may then consider the remaining balance. Correctly identifying the primary payer prevents improper billing to Medicare.

A superbill (encounter form) is used to:

• a.Serve as the patient's insurance card
• b.Record the payer's remittance
• c.Capture the diagnoses, procedures, and charges from a patient encounter for claim creation✓
• d.Authorize a surgery

A superbill documents the services provided during a visit, including diagnosis and procedure codes and charges, and serves as the source document for generating the claim. Accurate superbills reduce coding errors and support timely billing. Many practices now generate this information electronically within the practice management system.

Which of the following would most likely cause a claim to be rejected at the clearinghouse before reaching the payer?

• a.A correctly matched diagnosis and procedure
• b.A valid, active NPI
• c.Accurate patient demographics
• d.An invalid or missing subscriber identification number✓

Clearinghouses perform front-end edits and will reject claims with missing or invalid data such as an incorrect subscriber ID, invalid NPI, or format errors before the claim reaches the payer. These rejections can be corrected and resubmitted quickly. Catching errors at this stage is faster than resolving a payer denial.

A clearinghouse in the billing workflow functions to:

• a.Receive claims from providers, check and format them, then route them to the appropriate payers✓
• b.Set the patient's copayment amounts
• c.Provide medical treatment
• d.Assign diagnosis codes to encounters

A clearinghouse is an intermediary that accepts electronic claims from providers, scrubs and standardizes them into the required format, and forwards them to the correct payers. It also returns rejection reports so errors can be fixed quickly. Using a clearinghouse streamlines electronic submission to many payers at once.

On the CMS-1500 claim, diagnosis codes are linked to each service line by:

• a.Listing the codes in random order
• b.Writing them in the remittance advice
• c.Using diagnosis pointers that connect each procedure to the diagnosis that justifies it✓
• d.Placing them only on the UB-04

The CMS-1500 uses diagnosis pointers to associate each billed procedure line with the specific diagnosis that supports its medical necessity. Proper linkage demonstrates why each service was needed and helps prevent medical-necessity denials. Mispointed or missing links are a common cause of claim rejections.