CBCS CBCS Full Exam Simulation 2 — Questions and Answers
Question 1: Which of the following best describes a coordination of benefits (COB) situation?
- A patient has both Medicare Part A and Part B coverage
- 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
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.
Coordination of Benefits (COB) is the process of determining how multiple insurance plans will share the cost of a patient's claim. COB rules (established by NAIC model regulations and individual state laws) determine which plan is primary (pays first) and which is secondary (pays after the primary). Common COB rules include the birthday rule (for dependent children), the subscriber's own plan pays primary, and Medicare Secondary Payer (MSP) rules for patients with Medicare and employer coverage.
Question 2: Under Medicare Secondary Payer (MSP) rules, in which situation is Medicare the secondary payer?
- When a patient is over age 65 with no other insurance
- When an employee aged 70 is covered by their employer's group health plan (Correct answer)
- When a patient is on Medicare and Medicaid simultaneously
- When a patient has a Medicare Supplement (Medigap) policy
Correct answer: When an employee aged 70 is covered by their employer's group health plan
Under MSP rules, for active employees aged 65+ at companies with 20+ employees, the employer's group health plan is primary and Medicare is secondary.
Medicare Secondary Payer (MSP) rules govern when Medicare pays secondary to another payer. When an active employee (or their covered spouse) is over age 65 and their employer has 20 or more employees, the employer's group health plan must pay primary and Medicare pays secondary. Other MSP situations include: working individuals with End-Stage Renal Disease (ESRD) within the 30-month coordination period, liability insurance, workers' compensation, and no-fault insurance.
Question 3: What is an Advance Beneficiary Notice (ABN) in Medicare billing?
- 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
- An annual notice sent to all Medicare beneficiaries about their benefits
- A notice sent to new Medicare enrollees about their rights
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.
An Advance Beneficiary Notice of Noncoverage (ABN) is a standardized notice that Medicare providers must give to beneficiaries before providing a service that may be denied as not medically necessary or not covered. The ABN informs the patient of the potential non-coverage, gives an estimated cost, and presents options (receive the service and agree to pay if Medicare denies, or decline the service). Without a properly executed ABN, the provider generally cannot bill the patient if Medicare denies the claim.
Question 4: What is a National Provider Identifier (NPI)?
- A state-issued license number for healthcare providers
- A unique 10-digit identifier assigned to healthcare providers under HIPAA (Correct answer)
- A CMS-assigned billing number used only for Medicare claims
- A number assigned to each health plan by the federal government
Correct answer: A unique 10-digit identifier assigned to healthcare providers under HIPAA
The NPI is a unique 10-digit number required by HIPAA to identify covered healthcare providers in standard transactions.
The National Provider Identifier (NPI) is a unique 10-digit identification number required by HIPAA for all covered healthcare providers. It replaced the multiple provider identification numbers previously required by different payers (UPIN, OSCAR, etc.). Type 1 NPIs are assigned to individual providers (physicians, PTs, etc.); Type 2 NPIs are assigned to organizations (hospitals, group practices). The NPI is required on all HIPAA standard electronic transactions and on paper claim forms.
Question 5: Which of the following is a function of a healthcare clearinghouse?
- Processing medical claims on behalf of patients directly
- Translating claims between non-standard formats and HIPAA-standard formats for transmission to payers (Correct answer)
- Negotiating reimbursement rates between providers and payers
- Credentialing providers for participation in insurance networks
Correct answer: Translating claims between non-standard formats and HIPAA-standard formats for transmission to payers
Clearinghouses act as intermediaries that translate non-standard electronic claims into HIPAA-compliant formats and check claims for errors before sending them to payers.
A healthcare clearinghouse is a HIPAA-defined entity that processes nonstandard health information received from another entity (typically a provider's practice management system) into a standard format (such as the X12 837), checks the claim for errors (claim scrubbing), and transmits the formatted claim to the appropriate payer. Clearinghouses reduce claim rejections by catching errors before submission, and they provide tracking and reporting capabilities.
Question 6: What type of audit involves OIG investigators posing as patients or providers to gather evidence of fraud?
- Comprehensive Error Rate Testing (CERT)
- Undercover investigation (Correct answer)
- Recovery Audit Contractor (RAC) audit
- Zone Program Integrity Contractor (ZPIC) review
Correct answer: Undercover investigation
Undercover investigations involve OIG agents posing as patients or providers to detect healthcare fraud.
The HHS Office of Inspector General (OIG) uses a variety of investigative techniques to detect healthcare fraud, including undercover investigations where agents pose as patients or providers to gather firsthand evidence of fraudulent billing practices. Other OIG tools include data analysis of claims patterns, CERT audits (statistical sampling to measure improper payment rates), RAC audits (contingency-fee contractors who identify overpayments), and ZPIC/UPIC investigations for program integrity.
Question 7: Which code set is used to report durable medical equipment (DME) and supplies on a Medicare claim?
- CPT codes
- ICD-10-PCS codes
- HCPCS Level II codes (Correct answer)
- Revenue codes
Correct answer: HCPCS Level II codes
HCPCS Level II codes (alphanumeric codes beginning with letters A-V) are used to report DME, supplies, orthotics, prosthetics, and other items not in CPT.
HCPCS (Healthcare Common Procedure Coding System) Level II codes are alphanumeric codes (A0000-V9999) developed by CMS to report services, supplies, and equipment not included in CPT (Level I). Common HCPCS Level II code ranges include: A codes (ambulance, DME, supplies), E codes (DME equipment), L codes (orthotics and prosthetics), and J codes (injectable drugs). DME suppliers use HCPCS Level II codes to bill Medicare and Medicaid for equipment provided to patients.
Question 8: What does the 'clean claim' concept mean in medical billing?
- A claim that has been scrubbed to remove duplicate charges
- A claim that contains all required information and can be processed without further information from the provider (Correct answer)
- A claim that has been paid in full with no outstanding balance
- A claim for which all clinical documentation has been reviewed
Correct answer: A claim that contains all required information and can be processed without further information from the provider
A clean claim is one that contains all required information and can be adjudicated by the payer without needing additional information from the provider.
A clean claim is a claim that passes all payer edits and contains all required information — including correct patient demographics, insurance information, diagnosis codes, procedure codes, provider information, and any required attachments — allowing the payer to adjudicate it without requesting additional information. Under HIPAA, clean claims submitted electronically must be paid by Medicare within 14 days (30 days for paper claims). Timely filing of clean claims is essential for maximizing cash flow.
CBCS CBCS Full Exam Simulation 2
Which of the following best describes a coordination of benefits (COB) situation?