NHA Medical Billing & Coding (CBCS) — All Questions

In ICD-10-CM, what does the abbreviation NOS in the Alphabetic Index or Tabular List indicate?

• a.The documentation is unspecified, so an 'unspecified' code is assigned✓
• b.The code requires an additional character to be complete
• c.Two separate codes must be combined into one
• d.The condition should never be coded as a primary diagnosis

NOS stands for 'not otherwise specified' and is equivalent to 'unspecified.' It is used when the medical record lacks the detail needed to assign a more specific code. Coders should query the provider when greater specificity is clinically documented but not captured.

An ICD-10-CM code shown with a dash (for example, S52.5-) in a coding reference most directly signals that:

• a.The code is exempt from the diagnosis present-on-admission indicator
• b.The code may only be used for external causes
• c.The code has been deleted from the current code set
• d.Additional characters are required to reach a valid, complete code✓

A trailing dash is a placeholder convention indicating that the code is incomplete and needs one or more additional characters. Submitting a truncated code that lacks required characters will cause the claim to be rejected. The coder must consult the Tabular List to assign all required characters, including any seventh character.

The ICD-10-CM convention 'code first' instructs the coder to:

• a.Assign the code that generates the highest reimbursement first
• b.Report only the manifestation and omit the underlying condition
• c.Sequence the underlying etiology or cause before the manifestation code✓
• d.Always list the code with the highest numeric value first

'Code first' is a sequencing instruction telling the coder to list the underlying condition or etiology ahead of the associated manifestation. Manifestation codes cannot stand alone as a first-listed or principal diagnosis. This mirrors the etiology/manifestation convention found throughout the code set.

In the ICD-10-CM Tabular List, the note 'Excludes1' means:

• a.The excluded code is an acceptable synonym for the listed code
• b.The two conditions may be coded together when both are documented
• c.The two conditions are mutually exclusive and should not be coded together✓
• d.An additional code should be assigned to fully describe the condition

An Excludes1 note is a 'not coded here' instruction indicating the two conditions cannot occur together and should never be reported on the same encounter for the same condition. In contrast, an Excludes2 note means the excluded condition is separate and may be coded additionally if the patient has both. Confusing the two notes is a common source of coding errors.

Which seventh character in an ICD-10-CM injury code identifies a subsequent (follow-up) encounter during the healing phase?

• a.S, for sequela
• b.D, for subsequent encounter✓
• c.A, for initial encounter
• d.X, for a placeholder

For most injury and external-cause codes, the seventh character 'D' denotes a subsequent encounter, when the patient is receiving routine care during the healing or recovery phase. 'A' is the initial encounter for active treatment, and 'S' identifies a sequela, or late effect. The letter X can serve as a placeholder to fill empty character positions so the seventh character stays in the correct slot.

The main term used to locate a diagnosis in the ICD-10-CM Alphabetic Index is generally:

• a.The condition, disease, or reason for the encounter✓
• b.The type of insurance the patient carries
• c.The name of the treating provider's specialty
• d.The anatomical site of the condition

Diagnoses are indexed by the condition, disease, injury, or symptom (the main term), not by the body site. Anatomical site and other details usually appear as subterms indented beneath the main term. Coders locate the term in the Index, then verify the code in the Tabular List before final assignment.

The Current Procedural Terminology (CPT) code set is divided into three categories. Category I codes primarily describe:

• a.Performance-measurement and quality tracking data
• b.Durable medical equipment and supplies
• c.Widely performed procedures and services with FDA-approved technology✓
• d.Emerging or experimental technologies and services

Category I CPT codes are five-digit numeric codes representing established procedures and services that are consistent with contemporary medical practice. Category II codes are supplemental tracking codes for performance measurement, and Category III codes are temporary codes for emerging technology. Only Category I codes have relative value units assigned for standard payment.

CPT Category III codes are best described as:

• a.Temporary codes for emerging technologies, services, and procedures✓
• b.Codes used exclusively for anesthesia services
• c.Quality-measurement codes that carry no procedure meaning
• d.Permanent codes for well-established surgical procedures

Category III codes are temporary alphanumeric codes (four digits followed by the letter T) used to track new and emerging technologies. Using them allows data collection on utilization and outcomes before a service may be considered for Category I status. They are archived or converted after a set period if not adopted.

HCPCS Level II codes are chiefly used to report:

• a.Products, supplies, and services not covered by CPT, such as durable medical equipment and certain drugs✓
• b.Inpatient hospital room-and-board charges
• c.International diagnosis classifications
• d.Physician evaluation and management visits

HCPCS Level II is a national code set (alphanumeric, one letter followed by four digits) maintained by CMS to report items such as durable medical equipment, prosthetics, orthotics, supplies, ambulance services, and drugs administered other than by mouth. These are items generally not found in CPT (HCPCS Level I). Payers rely on Level II codes to adjudicate supply and drug claims.

A modifier appended to a CPT code is used to:

• a.Indicate that a service was altered by a specific circumstance without changing the code's core meaning✓
• b.Signal that the claim is being submitted late
• c.Change the fundamental definition of the procedure code
• d.Replace the diagnosis code on the claim

Modifiers are two-character codes that provide additional information about a service, such as that a procedure was bilateral, was reduced, or was performed by more than one provider, without redefining the procedure itself. Correct modifier use supports clean claims and appropriate reimbursement. Omitting a needed modifier is a frequent cause of denials.

Modifier 26 is appended to a diagnostic service to indicate that only the:

• a.Service was performed by a resident under supervision
• b.Technical component (equipment and supplies) is being billed
• c.Professional component (the physician's interpretation) is being billed✓
• d.Global service including both components is being billed

Many diagnostic tests, such as radiology, have a professional component (the provider's interpretation and report) and a technical component (the equipment, supplies, and technician). Modifier 26 reports the professional component alone. Modifier TC reports the technical component, and a code billed without either modifier represents the global (combined) service.

Modifier 25 is most appropriately used to report:

• a.A bilateral procedure performed on paired organs
• b.A repeat laboratory test on the same day
• c.A significant, separately identifiable E/M service by the same provider on the same day as another procedure✓
• d.A staged or planned return to the operating room

Modifier 25 tells the payer that on the day a minor procedure was performed, the provider also delivered a distinct, medically necessary evaluation and management service beyond the usual pre- and post-procedure work. Documentation must clearly support the separate E/M service. Misuse of modifier 25 is a common audit target.

Three key components historically used to determine the level of an evaluation and management (E/M) service are:

• a.History, examination, and medical decision making✓
• b.Payer, plan type, and deductible status
• c.Diagnosis, procedure, and place of service
• d.Modifier, units, and charge amount

Traditional E/M level selection was based on the extent of the history, the examination, and the complexity of medical decision making. Contemporary office-visit guidelines allow the level to be chosen by medical decision making or by total time on the date of service. Accurate documentation of these elements supports the code selected.

When selecting an office E/M visit level by time under current guidelines, the coder should count:

• a.Only the minutes spent face-to-face performing the exam
• b.The average time all patients spend in the practice that day
• c.Only the time the patient spent in the waiting room
• d.The total qualifying provider time spent on the date of the encounter, including certain non-face-to-face work✓

Current office and outpatient E/M guidelines permit level selection based on the provider's total time on the date of the encounter, which can include reviewing records, ordering tests, documenting, and coordinating care, not just face-to-face minutes. The provider must document the total time. Alternatively, the level may be chosen by medical decision making.

In coding, 'medical necessity' generally means that a service is:

• a.The most expensive option available to the provider
• b.Requested by the patient regardless of clinical indication
• c.Reasonable and necessary for the diagnosis or treatment of the patient's condition✓
• d.Always covered by every insurance plan

Medical necessity is the standard that a service must be appropriate and needed to evaluate or treat the patient's documented condition to qualify for payment. The diagnosis code must support the procedure code billed. Services deemed not medically necessary are commonly denied even when correctly coded.

The primary or first-listed diagnosis on an outpatient claim should represent:

• a.The condition that is easiest to code
• b.Any chronic condition the patient has ever had
• c.The diagnosis with the highest reimbursement
• d.The main condition, chiefly responsible for the services provided during the encounter✓

For outpatient encounters, the first-listed diagnosis is the reason chiefly responsible for the services rendered that day. Coexisting conditions that affect treatment may be reported as additional diagnoses. Correct sequencing supports both medical necessity and accurate reimbursement.

When a definitive diagnosis has not been established at the end of an outpatient encounter, ICD-10-CM guidelines direct the coder to report:

• a.The most serious disease that could explain the symptoms
• b.No diagnosis code at all
• c.A probable or 'rule-out' diagnosis as if confirmed
• d.The documented signs, symptoms, or reason for the encounter✓

For outpatient and physician office coding, conditions described as 'probable,' 'suspected,' or 'rule out' are not coded as confirmed. Instead, the coder reports the signs, symptoms, or the reason for the visit to the highest known level of certainty. This differs from inpatient rules, where uncertain diagnoses may sometimes be coded.

The instructional note 'use additional code' in ICD-10-CM tells the coder to:

• a.Delete the primary code and use only the additional one
• b.Never assign more than one code for the encounter
• c.Report a secondary code to fully describe the condition when documentation supports it✓
• d.Assign a modifier instead of a second code

'Use additional code' is a convention prompting the coder to add a secondary code that gives a more complete picture, such as an infectious organism or an associated manifestation, when the record supports it. It works together with 'code first' notes to enforce proper sequencing. Ignoring these notes can lead to incomplete claims.

In CPT, an add-on code is one that:

• a.Is always reported without any other code
• b.Describes an additional service performed with a primary procedure and cannot be reported alone✓
• c.Replaces the primary procedure code entirely
• d.Can only be used for laboratory panels

Add-on codes represent services that are always performed in addition to a primary procedure and are typically identified with a plus symbol in CPT. They are exempt from certain multiple-procedure payment reductions and must be reported alongside their primary code. Reporting an add-on code alone will cause a denial.

The 'global surgical package' concept in CPT means that the payment for a surgery generally includes:

• a.Nothing beyond the operating room time
• b.Only the incision itself
• c.The surgeon's fee plus all unrelated future care for a year
• d.The operation plus related preoperative and normal postoperative care for a defined period✓

A surgical package bundles the procedure with typical preoperative evaluation and routine postoperative follow-up during a defined global period. Services within that period that are routine follow-up are not billed separately. Care unrelated to the surgery, or a return to the operating room, may be reported with appropriate modifiers.

Which statement about the ICD-10-CM external cause codes (the V, W, X, and Y codes) is correct?

• a.They may be used as a first-listed or principal diagnosis
• b.They provide supplemental detail about how an injury occurred and are never sequenced first✓
• c.They replace the injury code entirely
• d.They are only used for laboratory results

External cause codes describe the mechanism, intent, place, and activity related to an injury or condition, adding useful public-health detail. They are always secondary and cannot serve as the principal or first-listed diagnosis. Their use is generally voluntary unless mandated by a state or payer.

A 'combination code' in ICD-10-CM is a single code that:

• a.Combines a CPT and an ICD-10-CM code
• b.Represents a bundled surgical package
• c.Classifies two diagnoses, or a diagnosis with an associated manifestation or complication, in one code✓
• d.Merges two unrelated encounters

A combination code captures either two diagnoses, or a diagnosis together with an associated secondary process or complication, in a single code. When a combination code fully describes the condition, only that code is assigned. Assigning separate codes instead would result in unnecessary and potentially incorrect reporting.

In CPT surgical coding, modifier 59 is used to identify a:

• a.Bilateral procedure
• b.Distinct procedural service that is separate from other services performed the same day✓
• c.Professional component only
• d.Reduced service

Modifier 59 indicates that a procedure was distinct or independent from other non-E/M services performed on the same day, such as a different session, site, or organ system. It is used to bypass certain edits when services are truly separate. Because it is frequently misused, more specific X-modifiers were introduced and documentation must support the distinct service.

Which of the following best describes the correct order of coding steps?

• a.Assign the code from the Tabular List, then skip the Index
• b.Read only the Index and never consult the Tabular List
• c.Choose the code with the highest payment, then confirm with the payer
• d.Locate the main term in the Alphabetic Index, then verify the code in the Tabular List✓

Proper coding always begins in the Alphabetic Index to locate the main term and any subterms, followed by verification in the Tabular List where all conventions, notes, and character requirements are checked. Coding directly from the Index alone risks missing required characters or instructional notes. This two-step process helps ensure accurate, complete code assignment.

The 'Z codes' in ICD-10-CM are primarily used to report:

• a.Poisonings and toxic effects
• b.External causes of morbidity
• c.Only fatal conditions
• d.Factors influencing health status and contact with health services, such as screenings or aftercare✓

Z codes describe reasons for encounters other than a current illness or injury, such as routine examinations, immunizations, screenings, aftercare, and personal or family history. Some Z codes may be first-listed while others are only secondary. They help explain the medical necessity of preventive and follow-up visits.

When laterality applies to an ICD-10-CM code, the coder must specify:

• a.The date of the injury
• b.Whether the condition affects the right, left, or is bilateral✓
• c.The severity of the pain only
• d.The provider's specialty

Many ICD-10-CM codes require documentation of laterality, identifying the right side, left side, or bilateral involvement of a paired body part. When the record does not state the side, an 'unspecified' code may be the only option, but this reduces specificity. Coders should query the provider when laterality is clinically relevant but missing.

In CPT, the '-51' modifier is generally appended to indicate:

• a.A repeat clinical laboratory test
• b.A telehealth service
• c.Multiple procedures performed at the same session by the same provider✓
• d.That the patient is deceased

Modifier 51 signals that more than one procedure was performed during the same encounter, which may trigger multiple-procedure payment reductions on the lesser services. It is not appended to add-on codes or to codes designated as modifier-51 exempt. Some payers apply the reduction automatically rather than requiring the modifier.

Upcoding, which is prohibited, refers to:

• a.Reporting a higher-level or more complex service than was actually documented or performed✓
• b.Reporting a lower-level service than was documented
• c.Using the correct modifier on a claim
• d.Bundling two codes into one appropriately

Upcoding is the improper practice of assigning a code that reflects a more severe diagnosis or more expensive service than the documentation supports, in order to obtain higher payment. It is considered fraudulent and can trigger penalties. Coders must assign codes strictly according to the medical record.

Unbundling in coding refers to:

• a.Billing separately for services that should be reported together under a single comprehensive code✓
• b.Assigning the least specific diagnosis available
• c.Reporting only the primary code of a package
• d.Combining several services into one comprehensive code correctly

Unbundling occurs when component parts of a single comprehensive procedure are reported as separate codes to increase reimbursement. National Correct Coding Initiative edits are designed to detect and prevent this. When done to gain higher payment, unbundling is considered abusive or fraudulent billing.

The National Correct Coding Initiative (NCCI) edits are used primarily to:

• a.Prevent improper payment when incorrect code combinations are reported✓
• b.Set the fee schedule amounts for each code
• c.Determine patient deductibles
• d.Assign diagnosis codes automatically

NCCI edits, maintained by CMS, identify pairs of codes that generally should not be billed together for the same patient on the same day, as well as units-of-service limits. They help promote correct coding and prevent improper payments. A modifier may sometimes override an edit when documentation supports a distinct service.

Which resource lists CPT modifiers and their definitions and is essential for accurate procedural coding?

• a.The CMS-1500 claim form instructions only
• b.The patient's insurance card
• c.The CPT codebook, including its appendices✓
• d.The remittance advice

The CPT codebook contains the modifiers along with guidelines and appendices that define their proper use. Coders rely on these official descriptions to append modifiers accurately. Using an outdated or incomplete reference can lead to incorrect modifier application and denials.

The ICD-10-CM Official Guidelines for Coding and Reporting are best described as:

• a.Authoritative rules that accompany the code set and must be followed for accurate code assignment✓
• b.A list of covered services by insurance plan
• c.The fee schedule for each diagnosis
• d.Optional suggestions that payers may ignore

The Official Guidelines are a set of rules developed to accompany and complement the ICD-10-CM conventions and instructions, and adherence to them is required under HIPAA. They govern selection and sequencing of codes in various settings. Coders must apply both the conventions in the code set and these guidelines together.

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

• a.Professional services rendered by physicians and other non-institutional providers✓
• b.Inpatient hospital facility charges
• 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.Dental cleanings
• d.Institutional and facility services such as hospital and skilled nursing care✓

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.Includes only the diagnosis codes without procedure codes
• c.Has been denied and resubmitted at least once
• d.Is submitted on paper rather than electronically

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

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

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

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

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

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

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.The Medicare prescription drug benefit only
• b.Medicare Advantage, offered through private plans that bundle Parts A and B and often D✓
• c.Original fee-for-service Medicare
• 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.Skilled nursing facility stays
• b.Inpatient surgery
• c.Emergency ambulance transport
• d.Outpatient prescription drugs✓

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

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

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

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

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

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.