Payment Adjudication Flashcards
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Read the first 6 Payment Adjudication flashcards as text
What is the adjudication process for a health insurance claim?
Answer: The process by which an insurance company evaluates a claim, determines coverage, applies benefits, calculates payment, and issues a determination
Adjudication is the payer's internal process of reviewing a claim, verifying eligibility and coverage, applying contract terms, calculating the allowed amount, determining patient liability, and issuing payment or denial.
What does 'allowed amount' mean in insurance payment adjudication?
Answer: The maximum amount the insurance plan will recognize for a covered service, based on the contracted fee schedule or UCR rates
The allowed amount (also called 'approved amount' or 'eligible expense') is the maximum amount the payer will recognize for a given service, derived from the contracted rate (for in-network) or usual, customary, and reasonable (UCR) rate (for out-of-network).
What is an Explanation of Payment (EOP) or Electronic Remittance Advice (ERA)?
Answer: An electronic document (835 transaction) sent from payer to provider detailing how claims were processed, amounts paid, adjustments applied, and denial reasons
The ERA (HIPAA 835 transaction) is the electronic remittance advice sent from payer to provider, providing detailed information on claim adjudication including payment amounts, contractual adjustments, and denial codes.
What is 'balance billing' and when is it prohibited?
Answer: Billing the patient the difference between the provider's charge and the insurer's payment, which is prohibited for in-network providers (covered by contract) and in states with surprise billing protections
Balance billing is when a provider bills the patient the difference between their charge and what insurance paid. It is prohibited for in-network providers (contractually barred) and for out-of-network providers in emergency and certain surprise billing situations.
What is the purpose of the 835 reconciliation process in medical billing?
Answer: To match ERA/835 payment data against outstanding claims in the practice management system, ensuring accurate payment posting and identifying discrepancies
ERA/835 reconciliation involves matching the payer's payment explanation to outstanding claims in the billing system, verifying that each payment is posted correctly and identifying underpayments, overpayments, or missing payments.
What happens when a payer identifies an overpayment to a provider?
Answer: The payer sends a recoupment notice or offset notice, and the provider must return the overpaid amount or dispute it within the specified timeframe
When a payer identifies an overpayment, they issue a recoupment demand or offset the amount from future claim payments. The provider must refund the amount or dispute it within the specified timeframe.