CHC Healthcare Billing and Coding Compliance Questions and Answers 2 — Questions and Answers
Question 1: What is the purpose of a 'charge master' (chargemaster) in hospital billing compliance?
- A list of all patients billed during the year
- A comprehensive list of all billable services, supplies, and fees used to generate claims (Correct answer)
- A record of all insurance contracts
- A compliance training schedule for billing staff
Correct answer: A comprehensive list of all billable services, supplies, and fees used to generate claims
The chargemaster is the hospital's master price list containing every billable item with associated codes and charges, forming the basis for all claims submitted to payers.
Question 2: Which type of audit involves reviewing claims BEFORE they are submitted to payers to catch errors proactively?
- Retrospective audit
- Prospective audit (Correct answer)
- Concurrent audit
- External audit
Correct answer: Prospective audit
Prospective audits review claims before submission to identify and correct coding or documentation errors, preventing improper payments from occurring.
Question 3: Under the Medicare Fee Schedule, what does 'medical necessity' require for a claim to be reimbursable?
- The service was ordered by a board-certified specialist
- The service was reasonable and necessary for the diagnosis or treatment of illness or injury (Correct answer)
- The patient had prior authorization from their insurer
- The service was performed in an accredited facility
Correct answer: The service was reasonable and necessary for the diagnosis or treatment of illness or injury
Medicare requires that services be 'reasonable and necessary' for the diagnosis or treatment of illness or injury as a fundamental condition for reimbursement.
Question 4: What is a Recovery Audit Contractor (RAC) and what is its role in billing compliance?
- A CMS-contracted auditor that identifies and recovers improper Medicare payments (Correct answer)
- An internal hospital audit team focused on revenue cycle
- A state agency that audits Medicaid billing
- A private accreditation body for billing departments
Correct answer: A CMS-contracted auditor that identifies and recovers improper Medicare payments
RACs are private contractors authorized by CMS to review Medicare claims and recover improper payments, working on a contingency fee basis.
Question 5: What is 'place of service' coding and why is it critical in Medicare billing compliance?
- It identifies the city where the provider practices
- It indicates where a service was rendered and affects reimbursement rates and coverage rules (Correct answer)
- It tracks which payer is responsible for the claim
- It identifies the type of insurance the patient carries
Correct answer: It indicates where a service was rendered and affects reimbursement rates and coverage rules
Place of service codes on claims tell Medicare where the service was provided (e.g., office, hospital, telehealth), which directly affects applicable payment rates and coverage determinations.
Question 6: What is 'duplicate billing' and how does it constitute a compliance violation?
- Sending the same claim to two different state agencies
- Submitting the same claim more than once for the same service rendered to the same patient on the same date (Correct answer)
- Billing for a service twice in error during system migration
- Charging a patient after insurance has already paid
Correct answer: Submitting the same claim more than once for the same service rendered to the same patient on the same date
Duplicate billing—submitting identical claims multiple times for the same service—is a False Claims Act violation that results in overpayments subject to recoupment and potential penalties.
CHC Healthcare Billing and Coding Compliance Questions and Answers 2
What is the purpose of a 'charge master' (chargemaster) in hospital billing compliance?