AAPC Insurance Policies & Contracts 2 — Questions and Answers
Question 1: A patient's insurance policy has a $500 deductible, 80/20 coinsurance, and a $3,000 out-of-pocket maximum. The patient has met $2,800 of their out-of-pocket maximum. For a $1,000 claim, what is the patient's liability?
- $200 (remaining OOP max) (Correct answer)
- $200 (20% coinsurance)
- $0 (OOP max met)
- $800 (80% of balance after deductible)
Correct answer: $200 (remaining OOP max)
The patient needs only $200 more to reach their $3,000 out-of-pocket maximum, so liability is capped at $200.
Question 2: Which contract term refers to the insurer's right to pursue a third party that caused an insurance loss to the insured?
- Indemnification
- Subrogation (Correct answer)
- Coordination of benefits
- Reimbursement
Correct answer: Subrogation
Subrogation is the insurer's legal right to recover costs from a third party responsible for causing the insured's loss.
Question 3: A commercial insurance contract requires the provider to submit claims within 90 days of the date of service. A claim submitted on day 95 is denied. This denial is based on:
- Medical necessity
- Timely filing requirements (Correct answer)
- Authorization requirements
- Coordination of benefits rules
Correct answer: Timely filing requirements
Timely filing denials occur when claims are submitted after the deadline specified in the provider contract.
Question 4: Under a capitation agreement, a primary care physician receives $15 per member per month (PMPM). This payment model means the physician is paid:
- Per service rendered to each member
- A flat fee per enrolled member regardless of services used (Correct answer)
- Based on quality metrics achieved
- A percentage of the premium collected
Correct answer: A flat fee per enrolled member regardless of services used
Capitation pays a fixed amount per enrolled member per month, regardless of how many or how few services they actually use.
Question 5: Which clause in an insurance policy explains what the insurer will NOT cover under any circumstances?
- Limitation clause
- Exclusion clause (Correct answer)
- Coordination of benefits clause
- Non-duplication clause
Correct answer: Exclusion clause
The exclusion clause specifically lists conditions, services, or circumstances that are not covered by the insurance policy.
Question 6: A provider contract includes a 'most favored nation' clause. This means the provider must:
- Treat all patients regardless of insurance status
- Offer that payer the lowest rate given to any other payer (Correct answer)
- Accept assignment from all government payers
- Give priority scheduling to that insurer's members
Correct answer: Offer that payer the lowest rate given to any other payer
A most favored nation clause requires the provider to give that payer rates at least as low as those offered to any other payer.
Question 7: When a patient receives services from a non-participating provider in an HMO without a referral, the claim is typically:
- Paid at the in-network rate minus a penalty
- Paid at 50% of billed charges
- Denied except for emergency services (Correct answer)
- Processed under the out-of-network benefit with a higher copay
Correct answer: Denied except for emergency services
HMO plans generally deny non-emergency services from non-participating providers seen without proper authorization or referral.
AAPC Insurance Policies & Contracts 2
A patient's insurance policy has a $500 deductible, 80/20 coinsurance, and a $3,000 out-of-pocket maximum.
The patient has met $2,800 of their out-of-pocket maximum.
For a $1,000 claim, what is the patient's liability?