Revenue Cycle Management 9 Flashcards
6 cards from real CHAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Revenue Cycle Management 9 flashcards as text
What is the primary purpose of prior authorization in the revenue cycle?
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.
What does the term 'days in accounts receivable (AR)' measure in revenue cycle management?
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.
Which document does a payer send to a provider after processing a claim to explain how payment was calculated?
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.
What is a 'write-off' in the context of healthcare revenue cycle management?
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.
What is the function of the charge description master (CDM), also called the chargemaster, in the revenue cycle?
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.
In revenue cycle management, what is the purpose of a coordination of benefits (COB) process?
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.