CBCS — Certified Billing and Coding Specialist — Questions and Answers

Question 1: What is the HIPAA Security Rule's requirement for electronic PHI (ePHI)?

ePHI must be encrypted using AES-256 encryption at all times
ePHI must be stored only on servers within the United States
ePHI access must be limited to licensed healthcare providers only
Covered entities must implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of ePHI (Correct answer)

Correct answer: Covered entities must implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of ePHI

The Security Rule requires covered entities and business associates to implement three types of safeguards — administrative, physical, and technical — to protect ePHI from unauthorized access, use, or disclosure.

Question 2: What does 'out-of-pocket maximum' mean on a health insurance plan?

The highest premium the patient will pay
The maximum amount the insurer will pay
The cap on total costs a patient pays in a year, after which the insurer covers 100% (Correct answer)
The maximum number of visits covered

Correct answer: The cap on total costs a patient pays in a year, after which the insurer covers 100%

The out-of-pocket maximum is the annual cap on a patient's cost-sharing; once reached, the insurer pays 100% of covered services for the rest of the year.

Question 3: What does the acronym HCPCS stand for?

Health Common Procedure Coding Syntax
Healthcare Common Procedure Coding System (Correct answer)
Hospital Common Procedure Coding Schedule
Health Care Procedural Classification Standard

Correct answer: Healthcare Common Procedure Coding System

HCPCS stands for Healthcare Common Procedure Coding System, the standardized coding system used by Medicare and other payers for supplies, equipment, and non-physician services.

Question 4: What is a guarantor in the context of patient accounts?

The insurance company
The person financially responsible for the patient's account (Correct answer)
The referring provider
The patient's primary care physician

Correct answer: The person financially responsible for the patient's account

The guarantor is the individual (often the patient or a parent/guardian) who is legally responsible for paying the medical bill.

Question 5: CPT codes are organized into how many main sections?

7
5
6 (Correct answer)
4

Correct answer: 6

CPT is organized into 6 main sections: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology/Laboratory, and Medicine.

Question 6: What is the difference between an 'excludes 1' and 'excludes 2' note in ICD-10-CM?

Excludes 1 means never code together; excludes 2 means the excluded condition is not included in the code but can be coded together if both conditions are present (Correct answer)
Excludes 1 applies to chronic conditions; excludes 2 applies to acute conditions
Excludes 1 is for inpatient coding; excludes 2 is for outpatient coding
There is no difference — both mean the codes cannot be used on the same claim

Correct answer: Excludes 1 means never code together; excludes 2 means the excluded condition is not included in the code but can be coded together if both conditions are present

'Excludes 1' means the two conditions cannot occur together (mutually exclusive) and should never be coded simultaneously. 'Excludes 2' means the excluded condition is not part of the current code but may exist with it and can be coded separately.

Question 7: HCPCS Level II 'J codes' are used to report which category of items?

Prosthetic procedures
Drugs administered other than oral method (Correct answer)
Vision care services and supplies
Orthotic procedures

Correct answer: Drugs administered other than oral method

J codes (J0000–J9999) identify drugs that are typically administered by injection or infusion and are not self-administrable.

Question 8: What is the maximum number of characters in a valid ICD-10-CM code?

7 (Correct answer)
8
5
6

Correct answer: 7

ICD-10-CM codes can be up to 7 characters in length.

Question 9: What is the typical payment structure for providers in an HMO?

Pay-for-performance
Fee-for-service
Capitation (Correct answer)
Retainer fee

Correct answer: Capitation

In a Health Maintenance Organization (HMO), providers are often paid through a capitation model. Under capitation, providers receive a fixed monthly payment per enrolled patient, regardless of how many services the patient uses. This payment structure incentivizes providers to focus on preventive care and manage costs efficiently, as they bear the financial risk for patient care.

Question 10: What is the Medicare redetermination process?

The first level of Medicare's five-level administrative appeals process, where the Medicare Administrative Contractor reviews the claim denial (Correct answer)
A Medicare audit process for identifying fraud
A secondary billing process for Medicare crossover claims
A process for reviewing Medicare premium calculations

Correct answer: The first level of Medicare's five-level administrative appeals process, where the Medicare Administrative Contractor reviews the claim denial

Medicare redetermination is the first level of appeal, filed with the Medicare Administrative Contractor (MAC) within 120 days of the initial determination. The MAC reviews the claim and makes a new determination.

Question 11: What is a denial trend analysis and why is it important?

An analysis of how often providers change their fee schedules
Identifying patterns in claim denials by reason code, payer, or service type to find and fix root causes of denials (Correct answer)
An analysis of how long claims take to be paid
A review of patient complaints about billing practices

Correct answer: Identifying patterns in claim denials by reason code, payer, or service type to find and fix root causes of denials

Denial trend analysis involves tracking denials by type, payer, provider, and service to identify systemic issues. Finding root causes allows the practice to prevent denials proactively rather than just reacting to them.

Question 12: During patient registration, which document authorizes the provider to bill the patient's insurance on their behalf?

HIPAA notice
ABN
Prior authorization form
Assignment of benefits form (Correct answer)

Correct answer: Assignment of benefits form

The assignment of benefits form authorizes the insurance company to pay the provider directly rather than reimbursing the patient.

Question 13: What is the significance of the 'group number' on an insurance card?

It indicates the insurance company's local branch office
It is the patient's individual member identification number
It identifies the specific plan design and benefits package associated with an employer's group contract with the insurance company (Correct answer)
It identifies the patient's primary care physician within the plan network

Correct answer: It identifies the specific plan design and benefits package associated with an employer's group contract with the insurance company

The group number on an insurance card identifies the employer's group contract with the insurance plan, linking the patient to their specific employer-sponsored benefit package and coverage terms.

Question 14: A patient's friend calls the billing office to ask about the details of a recent bill. The billing specialist, wanting to be helpful, confirms the patient's recent surgery date and the outstanding balance. This action is a violation of which HIPAA principle?

The Security Rule
The Pre-authorization Requirement
The Minimum Necessary Standard (Correct answer)
The Breach Notification Rule

Correct answer: The Minimum Necessary Standard

The HIPAA Privacy Rule establishes the principle of 'minimum necessary,' which requires covered entities to make reasonable efforts to limit the use or disclosure of Protected Health Information (PHI) to the minimum necessary to accomplish the intended purpose. Disclosing details of a patient's bill and surgery to an unauthorized individual, like a friend, without the patient's explicit consent is a violation of their privacy and goes against this standard.

Question 15: Under HIPAA, which of the following is considered a covered entity?

A pharmaceutical manufacturer
A medical billing software vendor
A health plan, healthcare clearinghouse, or healthcare provider that transmits health information electronically (Correct answer)
An employer providing workers' compensation benefits

Correct answer: A health plan, healthcare clearinghouse, or healthcare provider that transmits health information electronically

HIPAA covered entities are health plans, healthcare clearinghouses, and healthcare providers that conduct covered transactions electronically. Business associates that work with covered entities also have HIPAA obligations.

Question 16: What is the difference between a 'subscriber' and a 'dependent' in health insurance?

A subscriber pays higher premiums; dependents pay lower premiums
There is no practical billing difference between subscriber and dependent
A subscriber is the patient; a dependent is the patient's physician
A subscriber is the individual who enrolls in and is primarily covered by the insurance policy; a dependent is a family member (spouse, child) covered under the subscriber's plan (Correct answer)

Correct answer: A subscriber is the individual who enrolls in and is primarily covered by the insurance policy; a dependent is a family member (spouse, child) covered under the subscriber's plan

The subscriber (or policyholder) is the person who enrolled in the health plan, often through an employer. Dependents are family members who receive coverage under the subscriber's policy.

Question 17: What is a clearinghouse in medical billing?

An intermediary company that receives electronic claims from providers, checks them for errors, reformats them to payer specifications, and transmits them to payers (Correct answer)
A software tool that checks claims against NCCI edits before submission
A secure facility where paper claims are processed
A federal agency that reviews and approves Medicare claims

Correct answer: An intermediary company that receives electronic claims from providers, checks them for errors, reformats them to payer specifications, and transmits them to payers

A clearinghouse acts as an intermediary between healthcare providers and payers, receiving electronic claims, scrubbing them for errors, and transmitting them in the correct format to each payer.

Question 18: What is the primary purpose of HIPAA's privacy rule?

To regulate the costs of healthcare services
To ensure the accuracy of medical coding and billing
To standardize the electronic exchange of health information
To protect individuals' health information from unauthorized access and disclosure (Correct answer)

Correct answer: To protect individuals' health information from unauthorized access and disclosure

HIPAA's (Health Insurance Portability and Accountability Act) Privacy Rule establishes national standards for the protection of individually identifiable health information. Its primary purpose is to give patients more control over their health information and to set boundaries on its use and disclosure. This ensures patient confidentiality and security in healthcare.

Question 19: What is the purpose of a corporate integrity agreement (CIA)?

A contract between two healthcare companies agreeing to share patient data securely
An agreement between the OIG and a provider who has settled a fraud investigation, requiring the provider to implement compliance measures under OIG monitoring for a defined period (Correct answer)
An internal policy document outlining a healthcare organization's ethical standards
A HIPAA-required agreement for all hospitals with electronic health records

Correct answer: An agreement between the OIG and a provider who has settled a fraud investigation, requiring the provider to implement compliance measures under OIG monitoring for a defined period

A CIA is a settlement component in OIG fraud cases where the provider agrees to implement specific compliance measures (training, auditing, reporting) and submit to OIG oversight for 5 years as an alternative to exclusion.

Question 20: What constitutes Protected Health Information (PHI) under HIPAA?

Only information relating to diagnoses and treatment plans
Individually identifiable health information in any form (electronic, paper, oral) held or transmitted by a covered entity or business associate (Correct answer)
Only information stored in electronic medical records
Health information that a patient has specifically requested be kept private

Correct answer: Individually identifiable health information in any form (electronic, paper, oral) held or transmitted by a covered entity or business associate

PHI is any individually identifiable health information in any format (electronic, paper, verbal) that relates to a person's past, present, or future physical or mental health condition, provision of healthcare, or payment for healthcare.

Question 21: What are patients' rights under the HIPAA Privacy Rule?

The exclusive right to decide who can access their complete medical record, with no exceptions
Rights including access to their PHI, request for amendments, accounting of disclosures, right to restrict certain uses/disclosures, and right to receive confidential communications (Correct answer)
The right to have all their medical bills forgiven if information is disclosed without permission
The right to have all of their PHI destroyed upon request

Correct answer: Rights including access to their PHI, request for amendments, accounting of disclosures, right to restrict certain uses/disclosures, and right to receive confidential communications

The HIPAA Privacy Rule gives patients specific rights: access their health records, request corrections (amendments), obtain an accounting of certain disclosures, request restrictions on use/disclosure, and receive confidential communications.

Question 22: A surgeon begins a diagnostic arthroscopy of the shoulder. During the procedure, a significant rotator cuff tear is identified, and the surgeon immediately converts the arthroscopic procedure to a full open rotator cuff repair during the same operative session. How should this encounter be coded?

Code both the diagnostic arthroscopy and the open repair, with modifier 58 on the repair.
Code both the surgical arthroscopy and the open repair.
Code only for the open rotator cuff repair procedure. (Correct answer)
Code the diagnostic arthroscopy with a modifier indicating it led to a more extensive procedure.

Correct answer: Code only for the open rotator cuff repair procedure.

According to the National Correct Coding Initiative (NCCI) and general coding principles, if an arthroscopic procedure is converted to an open procedure on the same joint during the same session, only the open procedure should be reported. The diagnostic scope is considered an integral part of the more definitive open repair.

Question 23: What is the Federal Employees Health Benefits (FEHB) Program?

The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans (Correct answer)
A government-subsidized program for unemployed federal workers
Medicare coverage for federal government retirees
A health plan exclusively for members of Congress

Correct answer: The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans

FEHB is the health benefits program for federal civilian employees and retirees, offering enrollment in a choice of approved health plans (fee-for-service, HMO, HDHP/HSA) administered by OPM.

Question 24: What should a billing specialist do if they discover a significant billing error that could affect reimbursement?

Wait for the insurance company to identify the error before taking any action
Notify the insurance company immediately about the error and request an adjustment (Correct answer)
Ignore the error if it benefits the practice financially
Correct the error and resubmit the claim without notifying the insurance company

Correct answer: Notify the insurance company immediately about the error and request an adjustment

Ethical billing practices require transparency and honesty. If a significant billing error is discovered, the billing specialist must immediately notify the insurance company to correct the claim. This ensures compliance with regulations, prevents potential fraud accusations, and maintains the integrity of the billing process.

Question 25: What is the correct action when a patient's name on the insurance card differs slightly from the registration system?

Ignore the discrepancy and submit the claim
Use the registration system name regardless
Verify the correct legal name with the patient and update the record to match insurance records (Correct answer)
Cancel the appointment

Correct answer: Verify the correct legal name with the patient and update the record to match insurance records

Name mismatches between registration and insurance records cause claim rejections, so the billing team must verify and correct the name to match insurer records.

Question 26: When using an external cause code from Chapter 20 of ICD-10-CM (V00-Y99) to describe the circumstances of an injury, which of the following is a primary guideline for its use?

It is only used for inpatient hospital coding.
It must always be sequenced as the principal diagnosis.
It can never be the principal or first-listed diagnosis. (Correct answer)
It is only required for claims submitted to Medicare.

Correct answer: It can never be the principal or first-listed diagnosis.

The ICD-10-CM Official Guidelines for Coding and Reporting state that external cause codes are supplemental and provide additional information. They can never be sequenced as the principal (inpatient) or first-listed (outpatient) diagnosis.

Question 27: What is the difference between a claim denial and a claim rejection in terms of next steps?

There is no practical difference in next steps
Denied claims require a formal appeal through the payer's process; rejected claims are corrected and resubmitted as a new claim (Correct answer)
Denials can only be handled by the provider; rejections can be handled by billing staff
Denials require a new claim number; rejections use the original claim number

Correct answer: Denied claims require a formal appeal through the payer's process; rejected claims are corrected and resubmitted as a new claim

A rejected claim was never processed — correct the errors and resubmit as a new claim. A denied claim was processed and requires a formal appeal through the payer's established appeals process.

Question 28: Under UHDDS guidelines, how many diagnoses may be reported as 'other diagnoses' (additional diagnoses) on an inpatient claim?

Up to 8 additional diagnoses
As many as meet the reporting criteria (Correct answer)
Up to 4 additional diagnoses
None — only the principal diagnosis is reported

Correct answer: As many as meet the reporting criteria

UHDDS guidelines allow reporting of all additional diagnoses that meet specified criteria — there is no fixed maximum number.

Question 29: A physician's office needs to bill for a routine patient check-up provided in their clinic. Which standard claim form should be used to submit this professional service to the insurance payer?

UB-04
CMS-1500 (Correct answer)
ABN (Advanced Beneficiary Notice)
CMS-1490S

Correct answer: CMS-1500

The CMS-1500 is the standard claim form used by non-institutional providers, such as physicians in an office setting, to bill for professional services. The UB-04 is used for institutional claims, like those from hospitals or skilled nursing facilities. An ABN is a notice given to a Medicare beneficiary, not a claim form, and the CMS-1490S is a form a patient can use to request Medicare payment.

Question 30: What information is contained in Box 33 of the CMS-1500 claim form?

The billing provider's name, address, phone number, and NPI (Correct answer)
The patient's diagnosis codes
The referring physician's name and NPI
The date and place of service

Correct answer: The billing provider's name, address, phone number, and NPI

Box 33 contains the billing provider's (or group practice's) name, address, phone number, and NPI — the entity responsible for submitting the claim and receiving payment.

Question 31: What is a co-payment in health insurance?

The annual amount a patient must pay before insurance activates
A fixed dollar amount paid by the patient at the time of service (Correct answer)
The maximum out-of-pocket annual cost
The percentage the patient owes after the deductible

Correct answer: A fixed dollar amount paid by the patient at the time of service

A co-payment (copay) is a fixed amount (e.g., $25) the patient pays at the time of each service visit, separate from the deductible.

Question 32: Which of the following best demonstrates effective communication skills in a billing and coding role?

Using technical language without ensuring the patient understands
Providing clear explanations and answering patient questions thoroughly (Correct answer)
Assuming patients know the details about their insurance coverage
Sending standard form letters without personalization

Correct answer: Providing clear explanations and answering patient questions thoroughly

Effective communication in billing and coding involves ensuring patients fully understand their financial responsibilities and insurance processes. Providing clear, jargon-free explanations and patiently answering questions builds trust and reduces confusion. This approach empowers patients and minimizes disputes, unlike using technical language or making assumptions.

Question 33: What is Workers' Compensation insurance, and how does billing differ from standard health insurance?

Insurance that employees purchase themselves to cover job-related injuries
Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury (Correct answer)
Insurance for employers to cover their liability if an employee injures a patient
A federal insurance program for all injury-related medical care

Correct answer: Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury

Workers' compensation covers medical care and lost wages for work-related injuries/illnesses. Claims are billed to the employer's WC carrier using state-specific forms, focus only on the work injury, and follow different reimbursement rules than standard health insurance.

Question 34: Which of the following is an example of a 'technical safeguard' under the HIPAA Security Rule?

Conducting annual security risk assessments.
Positioning computer monitors to prevent public viewing of PHI.
Developing a contingency plan for data recovery.
Implementing unique user IDs and password requirements for EHR access. (Correct answer)

Correct answer: Implementing unique user IDs and password requirements for EHR access.

The HIPAA Security Rule mandates three types of safeguards: administrative, physical, and technical. Technical safeguards are technology-based and relate to the policies and procedures for its use that protect electronic PHI (ePHI) and control access to it. Implementing unique user IDs, passwords, and other access controls is a core requirement of the technical safeguards.

Question 35: What is a Certificate of Creditable Coverage and why is it relevant to billing?

A document required when billing for experimental or investigational procedures
A document from a prior health plan confirming the length of previous creditable coverage, which can reduce pre-existing condition waiting periods under some plans (Correct answer)
A document certifying that a provider is credentialed with an insurance network
A certification that a claim has been reviewed and approved by the insurer

Correct answer: A document from a prior health plan confirming the length of previous creditable coverage, which can reduce pre-existing condition waiting periods under some plans

A Certificate of Creditable Coverage documents a patient's prior continuous health insurance coverage. Under pre-ACA rules, it could reduce waiting periods for pre-existing condition exclusions under new employer group plans.

Question 36: What is a self-funded (self-insured) employer health plan?

An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA (Correct answer)
An employer that provides health benefits funded entirely by employee payroll deductions
A small employer that qualifies for a government subsidy to fund health benefits
An employer that purchases a standard insurance policy from an insurer

Correct answer: An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA

In a self-funded plan, the employer directly pays employee health claims from its own funds rather than buying insurance. A Third-Party Administrator (TPA) typically processes claims using the employer's money.

Question 37: What is the primary purpose of the HIPAA Security Rule?

To protect paper health records from physical damage
To regulate the transfer of health records between states
To set standards for patient consent in clinical research
To establish safeguards for electronic protected health information (ePHI) (Correct answer)

Correct answer: To establish safeguards for electronic protected health information (ePHI)

The HIPAA Security Rule establishes national standards to protect electronic PHI (ePHI) through administrative, physical, and technical safeguards.

Question 38: What is a Medicare Administrative Contractor (MAC)?

A private company that designs Medicare benefit plans
A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction (Correct answer)
A contractor that audits Medicare Advantage organizations
A Medicare-approved company that provides managed care plans

Correct answer: A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction

MACs are private companies that serve as Medicare's claim processors in specific geographic regions (jurisdictions), handling Part A and Part B claims submission, payment, and audit functions.

Question 39: A 72-year-old patient has both Medicare and a state Medicaid plan. The patient receives services from a physician who accepts both types of insurance. How should the claim be processed?

The patient can choose which insurance will be billed as primary.
The claim should be split and submitted to both Medicare and Medicaid simultaneously.
The claim should be submitted to Medicaid first, and then to Medicare.
The claim should be submitted to Medicare first, and Medicaid will be the secondary payer. (Correct answer)

Correct answer: The claim should be submitted to Medicare first, and Medicaid will be the secondary payer.

Federal law establishes Medicaid as the "payer of last resort." This means that all other available third-party payers, including Medicare, must be billed and pay their portion before a claim can be submitted to Medicaid.

Question 40: What is the primary purpose of the AHIMA and AAPC codes of ethics for medical coders?

To determine which coding credentials are most valuable
To establish continuing education requirements
To set billing rates for coding services
To guide professional conduct, ensure accurate coding, and protect patient privacy (Correct answer)

Correct answer: To guide professional conduct, ensure accurate coding, and protect patient privacy

Professional codes of ethics for coders emphasize accurate and complete coding, protecting patient confidentiality, avoiding fraud, and maintaining professional competence.

Question 41: When multiple burns are coded, how should they be sequenced?

Sequence the largest surface area burn first
Sequence burns in the order they were treated
Sequence by body site in anatomical order
Sequence the most severe (highest degree) burn first (Correct answer)

Correct answer: Sequence the most severe (highest degree) burn first

ICD-10-CM guidelines require the highest degree burn to be sequenced first when multiple burns are present.

Question 42: What is the 'two-midnight rule' under Medicare?

A physician must expect a patient's stay to cross two midnights for inpatient admission to be medically necessary under Medicare (Correct answer)
Patients must be in observation for at least two midnights before inpatient admission
Any stay lasting more than two midnights is automatically paid as inpatient
Hospital discharge decisions must be made before midnight on the second day

Correct answer: A physician must expect a patient's stay to cross two midnights for inpatient admission to be medically necessary under Medicare

CMS's two-midnight rule states that inpatient admission is appropriate when the treating physician expects the patient to require hospital care spanning at least two midnights.

Question 43: What is the purpose of a payer contract review in revenue cycle management?

To renegotiate payer contracts every month based on current claim volumes
To identify which payers should be dropped from the practice's accepted insurance list
To analyze payer contracts to understand reimbursement rates, terms, and requirements, ensuring the practice is paid correctly according to the contract (Correct answer)
To comply with federal law requiring all payer contracts to be reviewed annually

Correct answer: To analyze payer contracts to understand reimbursement rates, terms, and requirements, ensuring the practice is paid correctly according to the contract

Payer contract reviews analyze the terms and fee schedules in payer agreements to ensure the practice understands its reimbursement rates, can identify underpayments, and can negotiate better terms at renewal.

Question 44: Which medical abbreviation stands for 'nothing by mouth'?

NPO (Correct answer)
STAT
BID
PRN

Correct answer: NPO

NPO stands for 'nil per os' (Latin for nothing by mouth) and is used in pre-surgical and fasting documentation.

Question 45: What is a HIPAA breach and what are the notification requirements?

An impermissible acquisition, access, use, or disclosure of PHI that compromises its security or privacy, requiring notifications to individuals, HHS, and potentially the media (Correct answer)
Any unauthorized viewing of PHI by a non-clinical staff member, requiring immediate patient notification
Only a cyberattack that exposes ePHI to external hackers, requiring law enforcement notification
Any accidental mailing of a bill to the wrong address, requiring no notification

Correct answer: An impermissible acquisition, access, use, or disclosure of PHI that compromises its security or privacy, requiring notifications to individuals, HHS, and potentially the media

A HIPAA breach is an impermissible use or disclosure of unsecured PHI that is presumed to be a breach unless a risk assessment shows low probability that PHI was compromised. Notification to affected individuals, HHS, and (for large breaches) media is required.

Question 46: What is the OIG Exclusion Database and why must providers check it?

The List of Excluded Individuals/Entities (LEIE) — a registry of providers barred from participating in federal healthcare programs; employers must check it to avoid employing excluded individuals (Correct answer)
A database of medications excluded from Medicare Part D formularies
A list of billing codes excluded from Medicare coverage nationally
A list of insurance companies excluded from Medicare participation

Correct answer: The List of Excluded Individuals/Entities (LEIE) — a registry of providers barred from participating in federal healthcare programs; employers must check it to avoid employing excluded individuals

The LEIE is the OIG's registry of individuals and entities excluded from federal healthcare programs. Employing or contracting with an excluded person can result in civil monetary penalties for every claim submitted involving that person.

Question 47: Medicare uses which system to pay physicians for their professional services?

Ambulatory Payment Classifications (APCs)
DRG-based prospective payment
Resource-Based Relative Value Scale (RBRVS) via MPFS (Correct answer)
Medicare Physician Fee Schedule (MPFS)

Correct answer: Resource-Based Relative Value Scale (RBRVS) via MPFS

Medicare pays physicians based on the Resource-Based Relative Value Scale (RBRVS), implemented through the Medicare Physician Fee Schedule.

Question 48: Which of the following best describes a coordination of benefits (COB) situation?

A patient is covered by two or more insurance plans, requiring determination of which pays first (Correct answer)
A provider participates in both Medicare and Medicaid programs
A patient switches insurance carriers mid-year
A patient has both Medicare Part A and Part B coverage

Correct answer: A patient is covered by two or more insurance plans, requiring determination of which pays first

COB applies when a patient has coverage under more than one insurance plan, requiring the determination of primary vs. secondary payer responsibility.

Question 49: Which insurance plan type requires members to choose a primary care physician (PCP) and get referrals to see specialists?

EPO
HMO (Correct answer)
POS
PPO

Correct answer: HMO

Health Maintenance Organizations (HMOs) typically require members to choose a primary care physician (PCP) within the network. The PCP acts as a gatekeeper, coordinating all of the patient's care and providing referrals to specialists if needed. This structure aims to manage costs and ensure integrated care within a defined network.

Question 50: What is the purpose of the 835 reconciliation process in medical billing?

To reconcile the practice's paper records with electronic claims submissions
To reconcile the CMS fee schedule with the practice's charge master
To match ERA/835 payment data against outstanding claims in the practice management system, ensuring accurate payment posting and identifying discrepancies (Correct answer)
To reconcile employee payroll records with Medicare timesheets

Correct 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.

Question 51: A nurse in the billing department accesses a patient record out of curiosity without a work-related need. This is a violation of which principle?

Minimum necessary standard (Correct answer)
Data portability
Chain of trust
Workforce clearance

Correct answer: Minimum necessary standard

The minimum necessary standard requires that access to PHI be limited to only what is needed to perform a job function.

Question 52: During an eligibility check for a patient, a CBCS discovers the policy is inactive. Which of the following actions should be taken next?

Cancel the patient's appointment immediately.
Bill the patient for the full amount of the service without discussion.
Submit the claim to the inactive policy anyway.
Contact the patient to obtain updated insurance information or discuss payment options. (Correct answer)

Correct answer: Contact the patient to obtain updated insurance information or discuss payment options.

When an inactive policy is discovered, the appropriate next step is to communicate with the patient. This allows the practice to obtain any new or corrected insurance information or to make the patient aware of their financial responsibility and discuss payment options before services are rendered. This proactive communication helps avoid billing disputes and patient dissatisfaction.

Question 53: The term 'bilateral' in a procedure code indicates the procedure was performed on:

Both sides of the body (Correct answer)
The right side only
The left side only
The midline

Correct answer: Both sides of the body

Bilateral means both sides; in CPT coding, a bilateral modifier or bilateral code applies when a procedure is performed on both sides.

Question 54: What is an Advance Beneficiary Notice (ABN) in Medicare billing?

An annual notice sent to all Medicare beneficiaries about their benefits
A notice sent to new Medicare enrollees about their rights
A notice required when a provider believes Medicare may not pay for a service (Correct answer)
A notice sent to patients explaining their Medicare Part D coverage

Correct answer: A notice required when a provider believes Medicare may not pay for a service

An ABN is a written notice given to Medicare fee-for-service beneficiaries before a service is provided that Medicare may deny as not medically necessary.

Question 55: A patient's insurance card shows a group number and member ID. What is the group number used for?

Identifying the individual patient
Authorizing a referral
Identifying the employer-sponsored plan (Correct answer)
Determining the patient's deductible amount

Correct answer: Identifying the employer-sponsored plan

The group number identifies the employer or group plan sponsor under which the patient's coverage is provided, while the member ID identifies the individual.

Question 56: How should a billing specialist handle a situation where they realize a billing error could lead to overpayment by a patient?

Cover up the mistake to avoid embarrassment
Correct the error, inform the patient, and provide a refund if necessary (Correct answer)
Ignore the error if it benefits the practice financially
Wait for the patient to notice and bring it up

Correct answer: Correct the error, inform the patient, and provide a refund if necessary

Ethical billing practices dictate that any overpayment by a patient due to a billing error must be rectified promptly. The billing specialist has a responsibility to correct the mistake, transparently communicate it to the patient, and issue a refund for the overpaid amount. This upholds trust, ensures financial accuracy, and complies with consumer protection principles.

Question 57: What does the term 'downcoding' mean?

Using codes from a previous edition of the code book
Simplifying complex codes for patient billing statements
Assigning a lower-level code than documentation supports (Correct answer)
Converting ICD-9-CM codes to ICD-10-CM

Correct answer: Assigning a lower-level code than documentation supports

Downcoding occurs when a payer or coder assigns a lower-level code than what the documentation supports, resulting in reduced reimbursement.

Question 58: What is a 'participating provider' vs. 'non-participating provider' in insurance networks?

Participating providers always accept Medicare; non-participating providers do not accept any government insurance
There is no difference in billing requirements between participating and non-participating providers
Participating providers have more patients; non-participating providers see fewer patients
Participating providers have signed contracts with the insurance plan and accept negotiated rates; non-participating providers have no contract and may charge higher rates with different patient liability (Correct answer)

Correct answer: Participating providers have signed contracts with the insurance plan and accept negotiated rates; non-participating providers have no contract and may charge higher rates with different patient liability

Participating (in-network) providers have contracts with the insurance plan and agree to accept the negotiated allowed amount. Non-participating (out-of-network) providers have no contract, and patients typically face higher out-of-pocket costs.

Question 59: In the ICD-10-CM Tabular List, what does the instructional note 'Excludes1' signify?

The excluded condition is another name for the condition listed above the note.
The excluded code is a component of the primary code and should not be coded separately.
The excluded code should never be used at the same time as the code above the note. (Correct answer)
The two conditions are unrelated, but a patient may have both, so they can be coded together.

Correct answer: The excluded code should never be used at the same time as the code above the note.

An 'Excludes1' note in ICD-10-CM indicates that the two conditions are mutually exclusive and cannot occur together. The code for the condition mentioned in the Excludes1 note should never be reported with the code it is listed under.

Question 60: What is the Stark Law (Physician Self-Referral Law) designed to prevent?

Physicians from billing more than the Medicare fee schedule
Physicians from accepting insurance from plans in which they are not contracted
Physicians from practicing in multiple states without proper licensure
Physicians from referring patients to entities with which they have a financial relationship, unless an exception applies (Correct answer)

Correct answer: Physicians from referring patients to entities with which they have a financial relationship, unless an exception applies

The Stark Law prohibits physicians from referring Medicare/Medicaid patients to entities for designated health services if the physician or an immediate family member has a financial relationship with that entity.

Question 61: What is the significance of CARC (Claim Adjustment Reason Codes) on a remittance advice?

They identify which ICD-10-CM codes triggered a medical necessity review
They are codes assigned by the provider to explain why a service was medically necessary
They indicate the amount the patient owes after insurance payment
They are standardized codes that explain why a claim was adjusted or denied, used to categorize and manage denials effectively (Correct answer)

Correct answer: They are standardized codes that explain why a claim was adjusted or denied, used to categorize and manage denials effectively

CARCs are standardized codes maintained by the X12 organization that appear on ERAs/RAs to explain why a payment was adjusted or denied. They allow for systematic tracking and management of denials.

Question 62: The suffix '-stenosis' means:

Rupture
Inflammation
Softening
Narrowing (Correct answer)

Correct answer: Narrowing

'-Stenosis' means narrowing or constriction, as in aortic stenosis (narrowing of the aortic valve).

Question 63: What is the purpose of collecting a patient's demographic information at registration?

To determine the patient's diagnosis
To schedule future appointments only
To select the appropriate CPT codes
To ensure accurate claim submission and correct patient identification (Correct answer)

Correct answer: To ensure accurate claim submission and correct patient identification

Accurate demographic information (name, DOB, address, insurance ID) is critical for submitting error-free claims and preventing claim rejections.

Question 64: What is a peer-to-peer review in the context of insurance denials?

A review process where two insurance companies assess the same claim
A physician-to-physician discussion between the treating provider and the payer's medical reviewer to discuss a denied or potentially denied service (Correct answer)
An audit where multiple billers review each other's work for quality
A review of a coder's work by a fellow credentialed coder

Correct answer: A physician-to-physician discussion between the treating provider and the payer's medical reviewer to discuss a denied or potentially denied service

A peer-to-peer review involves direct physician communication between the treating provider and the insurance company's medical director to discuss medical necessity for a denied or precertification decision.

Question 65: What is a key performance indicator (KPI) commonly used to measure revenue cycle efficiency?

First-pass resolution rate (FPRR) — the percentage of claims paid on the first submission without denial or correction (Correct answer)
Number of patients seen per day
The number of billing staff per provider
The average patient satisfaction score for billing interactions

Correct answer: First-pass resolution rate (FPRR) — the percentage of claims paid on the first submission without denial or correction

First-pass resolution rate (FPRR) measures the percentage of claims that are paid on first submission. High-performing practices typically achieve 95%+ FPRR, indicating effective coding, eligibility verification, and clean claim processes.

Question 66: What is TRICARE and who is eligible for it?

A supplemental insurance plan for Medicare beneficiaries
A state-administered insurance program for government employees
A federal health program for low-income families
The health care program for active-duty service members, retirees, and their families through the Department of Defense (Correct answer)

Correct answer: The health care program for active-duty service members, retirees, and their families through the Department of Defense

TRICARE is the healthcare benefit for members of the uniformed services (active duty, National Guard/Reserve, retired) and their eligible family members, administered by the Department of Defense.

Question 67: What does DRG stand for and how is it used in hospital billing?

Diagnostic Revenue Generator — a billing code for hospital outpatient procedures
Discharge Resource Group — a classification used for post-acute care placement
Diagnosis-Related Group — a classification system that determines fixed Medicare payment for inpatient hospital stays based on the patient's diagnosis and treatment (Correct answer)
Drug Reimbursement Guide — a formulary list for hospital pharmacy billing

Correct answer: Diagnosis-Related Group — a classification system that determines fixed Medicare payment for inpatient hospital stays based on the patient's diagnosis and treatment

DRG (Diagnosis-Related Group) is the classification system Medicare uses to determine fixed payment amounts for inpatient hospital stays. Each DRG has a relative weight that determines the payment amount.

Question 68: What is a compliance program in healthcare?

A government-mandated audit of all Medicare claims
A quality improvement initiative focused on patient safety
An organizational framework of policies, procedures, and training designed to prevent, detect, and correct fraud, waste, and abuse (Correct answer)
A software system for tracking patient compliance with treatment plans

Correct answer: An organizational framework of policies, procedures, and training designed to prevent, detect, and correct fraud, waste, and abuse

A healthcare compliance program is an internal system organizations use to ensure adherence to laws, regulations, and ethical standards, thereby preventing fraud and abuse.

Question 69: What is the Consolidated Omnibus Budget Reconciliation Act (COBRA) best known for in healthcare?

Creating the Medicaid program
Requiring employers to provide health insurance to full-time employees
Establishing Medicare Part D prescription drug coverage
Allowing individuals who lose employer-sponsored health coverage to continue that coverage temporarily by paying the full premium (Correct answer)

Correct answer: Allowing individuals who lose employer-sponsored health coverage to continue that coverage temporarily by paying the full premium

COBRA allows workers and their dependents to continue group health plan coverage for a limited time (typically 18–36 months) after losing employer-sponsored coverage, at the individual's own expense.

Question 70: The suffix '-ology' means:

Abnormal condition
Study of (Correct answer)
Surgical incision
Inflammation

Correct answer: Study of

'-Ology' means the study of, as in cardiology (study of the heart) or dermatology (study of the skin).

Question 71: What anatomical region is described by the term 'lumbar'?

Neck
Mid-back and sides between ribs and pelvis (Correct answer)
Shoulder region
Upper chest

Correct answer: Mid-back and sides between ribs and pelvis

The lumbar region refers to the lower back area between the thoracic spine and the sacrum, often documented in musculoskeletal billing.

Question 72: When an insurance claim is denied, what is the first step in managing Accounts Receivable (AR)?

Write off the claim as uncollectible
Review the denial reason and correct any errors before resubmitting (Correct answer)
Resubmit the claim without changes
Contact the patient to request payment

Correct answer: Review the denial reason and correct any errors before resubmitting

When an insurance claim is denied, the crucial first step in managing Accounts Receivable (AR) is to thoroughly review the denial reason provided by the payer. Understanding why the claim was denied allows the billing specialist to identify and correct any errors, gather missing information, or appeal the decision effectively before resubmitting. This proactive approach maximizes reimbursement and minimizes lost revenue.

Question 73: What is a Business Associate Agreement (BAA) under HIPAA?

A contract between an insurance company and a healthcare provider specifying reimbursement rates
A written contract between a covered entity and a business associate that specifies permitted uses of PHI and requires the business associate to protect PHI (Correct answer)
An agreement between two competing healthcare providers not to share patient information
A consent form signed by patients authorizing their information to be shared with third parties

Correct answer: A written contract between a covered entity and a business associate that specifies permitted uses of PHI and requires the business associate to protect PHI

A BAA is a legally required contract between a covered entity and any business associate who may access, use, or disclose PHI in the course of performing services. It specifies permitted uses and requires appropriate safeguards.

Question 74: A claim for a new, innovative surgical procedure is denied by a commercial payer as 'experimental and investigational.' The surgeon believes the procedure was medically necessary and has peer-reviewed medical journals to support its use. What is the most appropriate next step?

File a formal appeal that includes a letter of medical necessity and copies of the supporting journal articles. (Correct answer)
Immediately send the patient a bill for the full amount of the service.
Resubmit the claim with a different, more common procedure code.
Write off the balance as a contractual loss.

Correct answer: File a formal appeal that includes a letter of medical necessity and copies of the supporting journal articles.

When a claim is denied for reasons of medical necessity or because it is deemed experimental, the correct course of action is to file a formal appeal. This appeal should present a strong, evidence-based argument, including a detailed letter from the provider explaining the clinical rationale and supporting documentation like relevant medical literature.

Question 75: What is the 270/271 transaction in healthcare eligibility verification?

The HIPAA standard electronic transaction for eligibility and benefit inquiry (270) and response (271) (Correct answer)
A form used to submit prior authorization requests
The standard format for claim status inquiries
A Medicare enrollment form for new providers

Correct answer: The HIPAA standard electronic transaction for eligibility and benefit inquiry (270) and response (271)

The 270 is the electronic eligibility inquiry sent to payers; the 271 is the response containing the patient's coverage details, benefits, and cost-sharing information.

Question 76: What is the purpose of an Advance Beneficiary Notice (ABN) in Medicare billing?

To inform a Medicare beneficiary that a service may not be covered by Medicare so they can decide whether to receive the service and accept financial responsibility (Correct answer)
To notify Medicare before a beneficiary is admitted to a hospital
To authorize a Medicare beneficiary to appeal a denial on their own behalf
To document that a Medicare beneficiary has chosen a specific Medicare Advantage plan

Correct answer: To inform a Medicare beneficiary that a service may not be covered by Medicare so they can decide whether to receive the service and accept financial responsibility

An ABN is a written notice given to a Medicare beneficiary before a service is provided when the provider believes Medicare may not cover the service, allowing the patient to make an informed financial decision.

Question 77: What is an Explanation of Payment (EOP) or Electronic Remittance Advice (ERA)?

A report sent to the patient detailing their remaining deductible balance
A federal form required for Medicare claim submission
An electronic document (835 transaction) sent from payer to provider detailing how claims were processed, amounts paid, adjustments applied, and denial reasons (Correct answer)
A document the provider sends to explain how they calculated their charges

Correct 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.

Question 78: What is a corrected claim and when is it used?

A resubmission of a previously processed claim with corrections to errors, submitted with frequency code 7 (replacement) or 8 (void) (Correct answer)
A claim submitted by the patient after the provider declines to refile
A claim submitted on paper to replace an electronic claim
A new claim submitted after a denial, used instead of an appeal

Correct answer: A resubmission of a previously processed claim with corrections to errors, submitted with frequency code 7 (replacement) or 8 (void)

A corrected claim replaces a previously processed (paid, denied, or partially paid) claim to fix billing errors. It is identified with bill type frequency code 7 (replacement) or 8 (void/cancel) on institutional claims, or with condition code on professional claims.

Question 79: In a managed care plan, a 'gatekeeper' is typically which of the following?

The primary care physician who manages referrals to specialists (Correct answer)
The utilization management department
The insurance company's medical director
The patient's case manager

Correct answer: The primary care physician who manages referrals to specialists

In managed care plans (especially HMOs), the primary care physician acts as a gatekeeper, coordinating and authorizing referrals to specialists.

Question 80: A patient presents without an insurance card. What is the BEST first step for the billing staff?

Ask the patient for their insurance name, ID, and group number to verify eligibility by phone or portal (Correct answer)
Skip insurance verification
Refuse service until the card is provided
Bill the patient as self-pay automatically

Correct answer: Ask the patient for their insurance name, ID, and group number to verify eligibility by phone or portal

Staff should collect the patient's insurance information verbally or via a portal to verify eligibility in real time, ensuring the claim can be submitted correctly.

Question 81: Which term describes the condition where stomach contents flow back into the esophagus?

Dysphagia
Gastroesophageal reflux (Correct answer)
Colitis
Duodenal ulcer

Correct answer: Gastroesophageal reflux

Gastroesophageal reflux (GERD) is the backflow of stomach acid into the esophagus, commonly documented in billing for gastroenterology visits.

Question 82: What is CMS's Conditions of Participation (CoPs) for hospitals?

The conditions under which CMS authorizes new hospitals to begin operations
Federal health and safety standards that hospitals must meet to receive Medicare and Medicaid reimbursement (Correct answer)
The financial terms under which hospitals agree to participate in Medicare managed care plans
The participation agreement between hospitals and Medicare Administrative Contractors

Correct answer: Federal health and safety standards that hospitals must meet to receive Medicare and Medicaid reimbursement

CoPs are the minimum health and safety standards established by CMS that healthcare organizations (hospitals, home health agencies, SNFs, etc.) must meet to participate in Medicare and Medicaid programs.

Question 83: A billing specialist notices a pattern of a specific provider consistently using a higher-level evaluation and management (E/M) code for routine office visits, which is not supported by the medical documentation. Under which federal law could this practice be considered fraudulent?

The Stark Law
The Health Insurance Portability and Accountability Act (HIPAA)
The False Claims Act (FCA) (Correct answer)
The Anti-Kickback Statute (AKS)

Correct answer: The False Claims Act (FCA)

The False Claims Act (FCA) makes it illegal to knowingly submit false or fraudulent claims to a government healthcare program. Consistently billing at a higher code level than what is supported by the documentation, a practice known as 'upcoding,' is a classic example of a false claim because it seeks reimbursement for services that were not medically necessary at that level or not actually performed to that extent.

Question 84: Which of the following best describes a breach of patient confidentiality?

Discussing a patient's case with authorized personnel in a secure setting
Using patient data for research with de-identified information
Sharing a patient’s health information with a family member without consent (Correct answer)
Reviewing a patient’s medical records for legitimate billing purposes

Correct answer: Sharing a patient’s health information with a family member without consent

Patient confidentiality, mandated by HIPAA, means that protected health information (PHI) cannot be disclosed without the patient's explicit authorization. Sharing a patient's health information with a family member without their consent constitutes a breach because it violates the patient's right to privacy. Authorized personnel and legitimate billing or de-identified research purposes are permissible under specific guidelines.

Question 85: What is 'retroactive termination' of insurance coverage and how should a biller handle it?

A patient who terminates their own coverage before the policy period ends
An insurance company's refusal to renew a policy for the coming year
An insurance plan that terminates at the end of a benefit year without renewal
When an insurance company cancels coverage effective on a past date, making previously submitted claims subject to recoupment or denial (Correct answer)

Correct answer: When an insurance company cancels coverage effective on a past date, making previously submitted claims subject to recoupment or denial

Retroactive termination occurs when coverage is ended with an effective date in the past. This can affect claims already submitted and paid, potentially requiring refunds to the payer and re-billing the patient or other coverage.

Question 86: What is considered a 'kickback' in healthcare?

A penalty assessed for late claim submission
A refund issued to a patient for an overpayment
Anything of value given to induce or reward referrals of federal healthcare program business (Correct answer)
A discount offered to cash-paying patients

Correct answer: Anything of value given to induce or reward referrals of federal healthcare program business

Under the Anti-Kickback Statute, it is illegal to knowingly offer, pay, solicit, or receive anything of value to induce or reward referrals of items or services covered by federal healthcare programs.

Question 87: What does 'coordination of benefits' mean in the context of claim adjudication?

The process of coordinating multiple billing staff members to work on a single complex claim
The process by which multiple insurance plans determine the order and amount each plan pays for a covered service to prevent duplicate payment (Correct answer)
The alignment of billing codes between different payer fee schedules
The process of coordinating medical records from multiple providers for a single claim

Correct answer: The process by which multiple insurance plans determine the order and amount each plan pays for a covered service to prevent duplicate payment

COB in adjudication is the process by which primary and secondary insurers coordinate to ensure that combined payments do not exceed the provider's charge or the patient's total liability, preventing overpayment.

Question 88: A physician orders a hemoglobin A1c test for a diabetic patient's routine monitoring. What code set is used to report this lab service?

ICD-10-PCS
Revenue codes
CPT (85018 or 83036) (Correct answer)
HCPCS Level II

Correct answer: CPT (85018 or 83036)

Lab services such as hemoglobin A1c are reported using CPT codes from the Pathology and Laboratory section.

Question 89: Which box on the CMS-1500 claim form is used to enter the patient's diagnosis codes?

Box 11
Box 33
Box 24D
Box 21 (Correct answer)

Correct answer: Box 21

Box 21 on the CMS-1500 contains the diagnosis codes (ICD-10-CM) for the encounter. Up to 12 diagnosis codes can be entered, labeled A through L.

Question 90: In the inpatient setting, what is a Diagnosis Related Group (DRG)?

A coding guideline for grouping multiple diagnoses on a claim
A quality measure used by hospitals for accreditation
A system that classifies outpatient procedures for reimbursement
A classification of inpatient diagnoses into groups that predict similar resource use for Medicare payment (Correct answer)

Correct answer: A classification of inpatient diagnoses into groups that predict similar resource use for Medicare payment

DRGs are a patient classification system used by Medicare to determine inpatient hospital reimbursement, grouping patients with similar diagnoses and expected resource use.

Question 91: In ICD-10-CM, what does the 7th character 'A' typically indicate?

Not applicable
Subsequent encounter
Initial encounter (Correct answer)
Sequela

Correct answer: Initial encounter

'A' as the 7th character designates the initial encounter for active treatment.

Question 92: What is a key difference between an Electronic Medical Record (EMR) and an Electronic Health Record (EHR)?

EHRs are designed to share information across organizations; EMRs are practice-specific (Correct answer)
EMRs are legally required; EHRs are optional
EMRs contain more detailed information than EHRs
EHRs are used only for billing; EMRs are used for clinical care

Correct answer: EHRs are designed to share information across organizations; EMRs are practice-specific

EHRs are designed to share patient information across multiple healthcare organizations, while EMRs are typically limited to a single practice.

Question 93: What is the key coding difference between inpatient and outpatient settings for uncertain diagnoses?

Both settings prohibit coding uncertain diagnoses
Inpatient allows coding uncertain diagnoses as if confirmed; outpatient requires coding only signs and symptoms (Correct answer)
Both settings allow coding uncertain diagnoses with a modifier
Outpatient allows coding uncertain diagnoses; inpatient does not

Correct answer: Inpatient allows coding uncertain diagnoses as if confirmed; outpatient requires coding only signs and symptoms

In inpatient coding, 'probable,' 'suspected,' and 'likely' diagnoses may be coded as confirmed. In outpatient coding, only confirmed diagnoses or signs/symptoms are coded.

Question 94: Which body plane divides the body into superior and inferior portions?

Coronal
Transverse (Correct answer)
Oblique
Sagittal

Correct answer: Transverse

The transverse (horizontal) plane divides the body into upper (superior) and lower (inferior) sections.

Question 95: What does the 837P electronic transaction format represent?

Electronic prior authorization request
Electronic eligibility verification inquiry
Electronic remittance advice from payer to provider
Electronic claim transaction for professional (physician) services submitted to payers (Correct answer)

Correct answer: Electronic claim transaction for professional (physician) services submitted to payers

The 837P (Professional) is the HIPAA-standard electronic transaction for submitting professional claims (CMS-1500 equivalent). 837I is for institutional claims (UB-04 equivalent).

Question 96: What is an external appeal in the context of insurance claim denials?

An appeal sent to a different department within the insurance company
An appeal reviewed by an independent organization outside the insurance company, available after exhausting internal appeals (Correct answer)
An appeal filed directly with CMS for Medicare denials
An appeal submitted by the patient rather than the provider

Correct answer: An appeal reviewed by an independent organization outside the insurance company, available after exhausting internal appeals

An external appeal (independent external review) is conducted by an Independent Review Organization (IRO) outside the insurance company after the internal appeals process has been exhausted, providing an unbiased review.

Question 97: What does 'coordination of benefits (COB) information' need to be confirmed during eligibility verification for a patient with two insurance plans?

Which plan is primary (pays first), which is secondary, and whether the plans coordinate to prevent duplicate payment (Correct answer)
Only whether both plans cover the planned services
Whether the patient has met both plans' deductibles
Whether the patient prefers to use their primary or secondary insurance

Correct answer: Which plan is primary (pays first), which is secondary, and whether the plans coordinate to prevent duplicate payment

COB verification confirms the payment order — which plan is primary and which is secondary — and ensures proper billing sequence to comply with both plans' requirements and maximize claim payment.

Question 98: What is 'observation status' in a hospital, and how does it differ from inpatient admission?

Observation and inpatient are billed identically for Medicare patients
Observation is an inpatient status with lower acuity; inpatient is for critical care only
Observation is an outpatient status billed under Part B; inpatient is Part A for Medicare patients (Correct answer)
Observation allows 24-hour stays only; inpatient allows stays longer than 24 hours

Correct answer: Observation is an outpatient status billed under Part B; inpatient is Part A for Medicare patients

Observation is an outpatient status billed under Medicare Part B, while inpatient admission is covered under Part A — with different cost-sharing implications for patients.

Question 99: What does 'Medigap' (Medicare Supplement Insurance) cover?

Prescription drugs not covered by Medicare Part B
Out-of-pocket costs associated with Original Medicare, such as deductibles, copays, and coinsurance, sold by private insurance companies (Correct answer)
Services that Medicare considers experimental or investigational
Dental, vision, and hearing services excluded from Original Medicare

Correct answer: Out-of-pocket costs associated with Original Medicare, such as deductibles, copays, and coinsurance, sold by private insurance companies

Medigap plans are standardized supplemental insurance policies sold by private insurers that help pay the patient's share of Original Medicare costs (deductibles, coinsurance, copays).

Question 100: What does the ICD-10-CM Alphabetic Index instruct you to do when you see 'see also'?

Exclude the condition from coding if the additional term applies
Always use the alternate code provided after the instruction
Also look up the referenced main term if your current search does not produce a complete code (Correct answer)
Stop coding and use the suggested main term instead

Correct answer: Also look up the referenced main term if your current search does not produce a complete code

'See also' in the Alphabetic Index directs the coder to look up an additional main term if the current index entry does not provide complete coding information.

Question 101: A patient calls requesting a copy of their medical records. Under HIPAA, the covered entity must provide access within:

60 calendar days
7 calendar days
30 calendar days (with a possible 30-day extension) (Correct answer)
10 business days

Correct answer: 30 calendar days (with a possible 30-day extension)

Under HIPAA's Privacy Rule, covered entities must act on a request for access to PHI within 30 calendar days, with one possible 30-day extension if the entity provides written notice.

Question 102: What is the consequence of billing for a service that required prior authorization but was not obtained?

The patient is responsible for the full cost of the service
The claim will likely be denied, and the provider may not be able to bill the patient (Correct answer)
The payer pays at a reduced rate automatically
The claim is automatically resubmitted with a corrected authorization

Correct answer: The claim will likely be denied, and the provider may not be able to bill the patient

Claims without required prior authorization are typically denied, and in many contracts, the provider cannot balance-bill the patient for the denied amount.

Question 103: Which of the following best describes the concept of 'minimum necessary' under HIPAA?

Healthcare providers must collect the least amount of patient information possible at registration
Patients must provide only the minimum required consent for treatment
Covered entities must use or disclose only the minimum amount of PHI needed to accomplish the intended purpose (Correct answer)
Insurance companies must pay at least the minimum required reimbursement

Correct answer: Covered entities must use or disclose only the minimum amount of PHI needed to accomplish the intended purpose

The minimum necessary standard requires covered entities to make reasonable efforts to limit PHI use and disclosure to what is necessary to accomplish the intended purpose.

Question 104: In CPT, what does the term 'bundling' refer to?

Billing multiple units of the same code
Including multiple related services within one procedure code (Correct answer)
Grouping unrelated procedures under one code
Combining professional and technical components

Correct answer: Including multiple related services within one procedure code

Bundling means that related services are included within a single procedure code and should not be billed separately.

Question 105: What is the main difference between a charge and a payment in the revenue cycle?

A charge is the amount collected; a payment is the amount billed
A charge is the amount billed by the provider; a payment is the amount received from the payer or patient (Correct answer)
A charge is the Medicare fee schedule amount; a payment is the negotiated rate
A charge is the copay; a payment is the deductible

Correct answer: A charge is the amount billed by the provider; a payment is the amount received from the payer or patient

A charge is the amount a provider bills for a service, while a payment is the amount actually received. The difference may result in adjustments, write-offs, or patient balances.

Question 106: What is an Independent Practice Association (IPA) model HMO?

A Medicare Advantage plan administered by a group of academic medical centers
An HMO that employs all its physicians directly in a staff model
An HMO model where independent physicians in private practice contract with the IPA to provide services to HMO enrollees on a capitated or discounted fee basis (Correct answer)
A group of physicians who collectively own their own insurance plan

Correct answer: An HMO model where independent physicians in private practice contract with the IPA to provide services to HMO enrollees on a capitated or discounted fee basis

In the IPA model, independent physicians in private practice (not employed by the HMO) contract through an IPA to provide care to HMO members. Physicians maintain their private practices and see both HMO and non-HMO patients.

Question 107: What does the prefix 'brady-' mean in medical terminology?

Large
Fast
Small
Slow (Correct answer)

Correct answer: Slow

The prefix 'brady-' means slow, as in bradycardia (slow heart rate).

Question 108: Which of the following BEST describes the primary purpose of a well-written appeal letter for a denied claim?

To notify the patient that they will be responsible for the full balance if the appeal is unsuccessful.
To establish a formal record of disagreement for future legal action.
To present a clear, factual, and evidence-based argument explaining why the original decision should be overturned. (Correct answer)
To request a comprehensive list of the patient's covered benefits and exclusions from the payer.

Correct answer: To present a clear, factual, and evidence-based argument explaining why the original decision should be overturned.

The primary goal of an appeal letter is to persuade the payer to reverse their denial and pay the claim. This is achieved by professionally and clearly outlining the facts of the case, referencing specific policy language or medical criteria, and providing all necessary supporting documentation (e.g., medical records, physician's notes) to justify payment.

Question 109: What is a write-off in medical billing, and when is it appropriate?

A write-off is required whenever a patient has a deductible
A write-off should only be performed by the physician, not billing staff
A write-off is the adjustment of a balance that cannot or should not be collected — appropriate for contractual adjustments, small balance write-offs per policy, and hardship cases (Correct answer)
A write-off is always a loss for the practice; it should be avoided in all circumstances

Correct answer: A write-off is the adjustment of a balance that cannot or should not be collected — appropriate for contractual adjustments, small balance write-offs per policy, and hardship cases

Write-offs are appropriate for contractual adjustments (required by payer contracts), small balances (per practice policy), uncollectible accounts, and charity care — but should never be used to avoid collecting legitimate patient balances improperly.

Question 110: What is CHIP (Children's Health Insurance Program)?

A commercial insurance plan specifically designed for pediatric patients
A joint federal-state program providing low-cost health coverage to children in families that earn too much to qualify for Medicaid but cannot afford private insurance (Correct answer)
A Medicare program providing dental coverage for children of Medicare beneficiaries
A federal grant program for children's hospitals to provide uncompensated care

Correct answer: A joint federal-state program providing low-cost health coverage to children in families that earn too much to qualify for Medicaid but cannot afford private insurance

CHIP provides low-cost health coverage to children in families with incomes above the Medicaid threshold but who cannot afford private insurance. It is administered by states within federal guidelines.

Question 111: What does 'code first' instruction mean in ICD-10-CM?

A reminder to always use the Alphabetic Index before the Tabular List
A reminder to use the most specific code available
An instruction to sequence a causal/underlying condition before the manifestation code when both conditions are present (Correct answer)
An instruction to code symptoms before the underlying diagnosis

Correct answer: An instruction to sequence a causal/underlying condition before the manifestation code when both conditions are present

'Code first' indicates that an etiology/underlying condition code must be sequenced before the current code when the underlying condition is present. It is a sequencing instruction.

Question 112: What is the purpose of a HIPAA Notice of Privacy Practices (NPP)?

To inform patients of how their PHI may be used and disclosed, their privacy rights, and the covered entity's legal duties regarding PHI (Correct answer)
To notify patients of upcoming changes to their insurance premiums
To provide patients with a list of all providers who have accessed their records
To notify patients that their information has been shared with another healthcare provider

Correct answer: To inform patients of how their PHI may be used and disclosed, their privacy rights, and the covered entity's legal duties regarding PHI

The NPP is a document that covered entities must provide to patients describing their privacy rights, how PHI may be used and disclosed, the covered entity's privacy obligations, and how patients can exercise their rights.

Question 113: A patient is admitted to the hospital for management of severe dehydration. The dehydration is a direct result of infectious norovirus gastroenteritis. Both conditions are treated. According to the ICD-10-CM Official Guidelines for Coding and Reporting, what is the correct sequencing for the principal diagnosis?

The principal diagnosis is the dehydration.
The principal diagnosis is the infectious norovirus gastroenteritis. (Correct answer)
Either condition can be sequenced first since both were treated.
A single combination code for gastroenteritis with dehydration should be used.

Correct answer: The principal diagnosis is the infectious norovirus gastroenteritis.

According to the ICD-10-CM Official Guidelines, if a patient is admitted for a condition that is a manifestation or result of an underlying disease, the underlying disease should be sequenced as the principal diagnosis. In this case, the gastroenteritis (A08.1) is the underlying cause of the dehydration (E86.0), so it is sequenced first.

Question 114: What is claim scrubbing?

Removing sensitive information from claims for HIPAA compliance
Reviewing claims that have been previously denied and cleaned up for resubmission
Physically cleaning paper claims before mailing them
Automated review of claims for errors (coding, eligibility, missing data) before submission to reduce denials (Correct answer)

Correct answer: Automated review of claims for errors (coding, eligibility, missing data) before submission to reduce denials

Claim scrubbing is an automated pre-submission process that checks claims for coding errors, missing information, eligibility issues, and payer-specific rules to catch errors before the claim reaches the payer.

Question 115: When verifying insurance at registration, which item confirms the patient's plan is currently active?

Explanation of Benefits (EOB)
Remittance advice
Eligibility and benefits verification (Correct answer)
Prior authorization number

Correct answer: Eligibility and benefits verification

Eligibility and benefits verification confirms that the patient's insurance is active, identifies coverage details, and prevents claim denials for inactive coverage.

Question 116: What is the first step a medical biller should take upon receiving a claim denial?

Identify the denial reason code and determine whether the denial is correctable, appealable, or valid (Correct answer)
Immediately write off the denied amount
Resubmit the claim without changes
Contact the patient to collect the balance

Correct answer: Identify the denial reason code and determine whether the denial is correctable, appealable, or valid

Upon receiving a denial, the first step is to review the reason/remark codes on the remittance advice to understand why the claim was denied and determine the appropriate course of action.

Question 117: A patient is seen for type 2 diabetes with diabetic chronic kidney disease, stage 3. What combination code would be used?

N18.3
E11.22 (Correct answer)
E11.9
E11.65

Correct answer: E11.22

E11.22 is the combination code for type 2 diabetes mellitus with diabetic chronic kidney disease, stage 3.

Question 118: What does 'coinsurance' mean in health insurance billing?

Dual coverage from two insurers
The maximum benefit limit
A fixed per-visit fee
The percentage of costs a patient pays after the deductible is met (Correct answer)

Correct answer: The percentage of costs a patient pays after the deductible is met

Coinsurance is the percentage of covered costs the patient is responsible for after meeting their deductible (e.g., 20% after a 80/20 plan).

Question 119: Why is it important to verify insurance eligibility for established patients, not just new patients?

It is required by law to verify established patients' eligibility at every visit
Insurance coverage can change due to job changes, open enrollment, aging off a parent's plan, or COBRA expiration — verifying at each visit prevents claim denials (Correct answer)
It is only necessary for new patients; established patients' insurance never changes
Established patients are more likely to be fraudulent claimants

Correct answer: Insurance coverage can change due to job changes, open enrollment, aging off a parent's plan, or COBRA expiration — verifying at each visit prevents claim denials

Insurance coverage is not static — it changes frequently due to employment changes, life events, plan changes during open enrollment, and coverage terminations. Verifying at each encounter prevents billing errors and denials.

Question 120: A practice's billing manager is analyzing denial trends to identify areas for improvement. Which of the following denial reasons points to a preventable error that should be addressed by front-desk staff during patient registration and check-in?

Patient's insurance coverage was terminated prior to the date of service. (Correct answer)
Claim denied for exceeding the timely filing limit.
Service not covered under the patient's benefit plan.
Procedure determined to be not medically necessary.

Correct answer: Patient's insurance coverage was terminated prior to the date of service.

A denial due to terminated insurance coverage is a classic example of a preventable denial that can be caught by robust front-end processes. Verifying eligibility and benefits in real-time before or at the time of service would have identified that the patient's coverage was not active, allowing the office to make other financial arrangements.

CBCS — Certified Billing and Coding Specialist

The NHA CBCS exam certifies medical billing and coding specialists in claims processing, regulatory compliance, CPT/ICD-10-CM coding, reimbursement, and revenue cycle management.

120

Questions

180 min

Time Limit

78%

To Pass

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These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

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nhanow.com — Test delivery, renewal, score release, score validity, eligibility, retake fee, retake policy, exam information · verified Oct 2026
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