CHAA - Certified Healthcare Access Associate Revenue Cycle Management 9 — Questions and Answers
Question 1: What is the primary purpose of prior authorization in the revenue cycle?
- To verify a patient's identity before registration
- To obtain payer approval before delivering certain services to ensure reimbursement (Correct answer)
- To calculate the patient's estimated out-of-pocket costs
- To assign diagnosis codes to a patient's medical record
Correct answer: To obtain payer approval before delivering certain services to ensure reimbursement
Prior authorization (pre-authorization) is the process of obtaining a payer's approval before providing specific services or procedures. Without it, the payer may deny the claim, leaving the provider unpaid. It is a critical upstream step in the revenue cycle to prevent denials.
Question 2: What does the term 'days in accounts receivable (AR)' measure in revenue cycle management?
- The number of days a patient has to pay a bill before it goes to collections
- The average number of days it takes a provider to collect payment after a service is rendered (Correct answer)
- The total dollar amount owed to the provider by all payers
- The number of business days in a payer's claims processing cycle
Correct answer: The average number of days it takes a provider to collect payment after a service is rendered
Days in AR is a key performance indicator that measures how long, on average, it takes a healthcare organization to collect payment after services are provided. A lower number indicates a more efficient revenue cycle; a high number suggests billing or collection problems.
Question 3: Which document does a payer send to a provider after processing a claim to explain how payment was calculated?
- Advance Beneficiary Notice (ABN)
- Certificate of Coverage (COC)
- Remittance Advice (RA) (Correct answer)
- Assignment of Benefits (AOB)
Correct answer: Remittance Advice (RA)
A Remittance Advice (RA) — also called an Explanation of Benefits (EOB) when sent to the patient — is the document payers send to providers detailing which charges were paid, adjusted, denied, and why. Staff use it to post payments and identify claims requiring follow-up.
Question 4: What is a 'write-off' in the context of healthcare revenue cycle management?
- An adjustment that removes an uncollectible balance from accounts receivable (Correct answer)
- A fee charged to patients who miss appointments
- A penalty assessed to providers for late claim submission
- A payer's request for additional documentation on a claim
Correct answer: An adjustment that removes an uncollectible balance from accounts receivable
A write-off is the removal of a balance from accounts receivable that the provider has determined it cannot or is not permitted to collect. This includes contractual adjustments (the difference between billed charges and contracted rates) and bad debt write-offs for truly uncollectible amounts.
Question 5: What is the function of the charge description master (CDM), also called the chargemaster, in the revenue cycle?
- It stores each patient's demographic and insurance information
- It is a comprehensive list of every service, procedure, and supply a provider can bill, along with the associated charge (Correct answer)
- It tracks all outstanding denied claims awaiting appeal
- It records the payer's contracted reimbursement rates for each service
Correct answer: It is a comprehensive list of every service, procedure, and supply a provider can bill, along with the associated charge
The charge description master (CDM) is essentially the provider's price list — a database containing every billable item with its description, procedure code, and standard charge. Accurate CDM maintenance is essential for correct claim generation and regulatory compliance.
Question 6: In revenue cycle management, what is the purpose of a coordination of benefits (COB) process?
- To transfer a patient's care from one provider to another
- To determine which payer is primary and which is secondary when a patient has multiple insurance plans (Correct answer)
- To negotiate contracted rates between providers and payers
- To verify that a provider is credentialed with a specific insurance network
Correct answer: To determine which payer is primary and which is secondary when a patient has multiple insurance plans
Coordination of benefits (COB) is the process used when a patient has more than one health insurance plan. It establishes the order in which payers are responsible — primary, secondary, and sometimes tertiary — to prevent duplicate payment and ensure total reimbursement does not exceed the actual cost of care.
CHAA - Certified Healthcare Access Associate Revenue Cycle Management 9
What is the primary purpose of prior authorization in the revenue cycle?