CBCS - Certified Billing and Coding Specialist Payment Adjudication Questions and Answers 1 — Questions and Answers
Question 1: A billing specialist receives a remittance advice (RA) that shows a claim for a complex patient visit, billed with CPT code 99215, was reimbursed at the lower rate for CPT code 99213. The payer did not deny the claim but adjusted the payment. This action by the payer is known as:
- Rejection
- Downcoding (Correct answer)
- Unbundling
- Upcoding
Correct answer: Downcoding
Downcoding occurs when a payer changes a submitted CPT code to a lower-level, less complex, and lower-paying code. This often happens if the payer's adjudication system determines the submitted documentation does not support the higher-level code. Rejection refers to a claim that is not processed due to errors, unbundling is billing separately for procedures that should be grouped, and upcoding is the fraudulent practice of billing a higher-level code than the service provided.
Question 2: During the adjudication process, a payer's automated system flags a claim because the diagnosis code submitted does not align with the procedure code as a medically necessary reason for the service. Which of the following is the MOST likely reason for this initial claim denial?
- Lack of Medical Necessity (Correct answer)
- Timely Filing Limit Exceeded
- Incorrect Patient Information
- Service Not a Covered Benefit
Correct answer: Lack of Medical Necessity
A core function of adjudication is to evaluate the medical necessity of services provided. A mismatch between the diagnosis code (why the service was performed) and the procedure code (what was done) is a primary reason for a claim to be denied for lack of medical necessity. The other options are also reasons for denial but are not specifically related to the diagnosis-procedure link.
Question 3: A Certified Billing and Coding Specialist is reviewing an Electronic Remittance Advice (ERA) to post payments. Which of the following pieces of information is essential for reconciling the account and determining the next steps?
- Patient's preferred pharmacy
- Provider's National Provider Identifier (NPI)
- Claim Adjustment Reason Codes (CARCs) (Correct answer)
- The date the claim was created
Correct answer: Claim Adjustment Reason Codes (CARCs)
Claim Adjustment Reason Codes (CARCs) are used on the remittance advice to explain why a claim was paid differently than it was billed. These standardized codes detail adjustments, denials, or reductions, and are critical for the billing specialist to understand the adjudication outcome and decide whether to bill the patient, appeal the decision, or make a correction.
Question 4: A claim is submitted to a commercial payer. During adjudication, the claim is found to have a transposed digit in the patient's insurance ID number. What is the most probable initial outcome for this claim?
- The claim will be paid in full.
- The claim will be partially paid with an adjustment.
- The claim will be denied or rejected. (Correct answer)
- The claim will be forwarded to a secondary payer.
Correct answer: The claim will be denied or rejected.
The adjudication process begins with an initial review for basic errors and completeness. Incorrect or incomplete patient information, such as a wrong insurance ID number, is one of the most common reasons for a claim to be immediately rejected or denied because the payer cannot verify eligibility.
Question 5: After a claim is denied, the billing office prepares and submits additional documentation, including a letter from the physician explaining why the service was medically necessary, to the insurance company for a second review. This process is called:
- Re-adjudication
- An appeal (Correct answer)
- A query
- Payment posting
Correct answer: An appeal
An appeal is the formal process of asking an insurance company to review its decision to deny a claim. This typically involves submitting a formal letter, additional medical records, and a letter of medical necessity from the provider to justify the service. Re-adjudication is the review itself, a query is a communication with a provider for clarification, and payment posting is recording payments.
Question 6: Which of the following best describes the primary purpose of the payment adjudication phase in the revenue cycle?
- To verify the patient's insurance eligibility and benefits before a service is rendered.
- To convert physician documentation into standardized medical codes for billing.
- For the payer to evaluate a submitted claim and determine their payment responsibility. (Correct answer)
- To generate and send a statement to the patient for their outstanding balance.
Correct answer: For the payer to evaluate a submitted claim and determine their payment responsibility.
Payment adjudication is the process a payer, like an insurance company, uses to review a submitted claim to determine its validity, accuracy, and the correct reimbursement amount based on the patient's policy. It's the payer's decision-making process that results in the claim being paid, denied, or adjusted.
CBCS - Certified Billing and Coding Specialist Payment Adjudication Questions and Answers 1
A billing specialist receives a remittance advice (RA) that shows a claim for a complex patient visit, billed with CPT code 99215, was reimbursed at the lower rate for CPT code 99213.
The payer did not deny the claim but adjusted the payment.
This action by the payer is known as: