CMAA Financial Management and Accounts Receivable 4 — Questions and Answers
Question 1: A patient's insurance EOB shows a 'contractual adjustment' of $150. What does this mean?
- The patient owes an additional $150
- The provider must write off $150 due to the payer contract (Correct answer)
- The claim was denied for $150
- The insurance overpaid by $150
Correct answer: The provider must write off $150 due to the payer contract
A contractual adjustment is the amount the provider agrees to write off as part of their contract with the insurance company.
Question 2: Which aging bucket indicates the most urgent collection priority?
- 0-30 days
- 31-60 days
- 61-90 days
- Over 120 days (Correct answer)
Correct answer: Over 120 days
Accounts over 120 days are the most difficult to collect and represent the highest risk of bad debt, requiring urgent action.
Question 3: A patient asks to pay their $600 balance in monthly installments of $100. What document should the medical office use?
- Assignment of benefits form
- Financial hardship waiver
- Payment plan agreement (Correct answer)
- Authorization for automatic billing
Correct answer: Payment plan agreement
A payment plan agreement formally documents the terms of the installment arrangement between the patient and the practice.
Question 4: When posting a Medicare remittance, the CARC code PR-2 indicates:
- The service was not covered
- The patient is responsible for the coinsurance amount (Correct answer)
- The claim was sent to the wrong payer
- The provider is not enrolled with Medicare
Correct answer: The patient is responsible for the coinsurance amount
CARC PR-2 (Patient Responsibility – Coinsurance) indicates the balance is the patient's coinsurance obligation.
Question 5: A practice's collection ratio is calculated as:
- Total charges divided by total payments
- Total payments collected divided by total net charges (Correct answer)
- Total adjustments divided by total charges
- Total write-offs divided by total payments
Correct answer: Total payments collected divided by total net charges
The collection ratio measures efficiency by dividing total collections by total net (after adjustments) charges, expressed as a percentage.
Question 6: Which of the following is an example of a 'credit balance' on a patient account?
- Patient owes $50 after insurance paid
- Insurance paid more than the amount billed (Correct answer)
- Patient has not met their deductible
- The claim was denied and needs resubmission
Correct answer: Insurance paid more than the amount billed
A credit balance occurs when a payment exceeds the amount owed, such as when insurance overpays, and may require a refund.
Question 7: Under HIPAA, protected health information (PHI) on a billing statement must be:
- Printed in full for insurance verification
- Limited to the minimum necessary for billing purposes (Correct answer)
- Shared freely with collection agencies
- Excluded from all financial documents
Correct answer: Limited to the minimum necessary for billing purposes
HIPAA's minimum necessary standard requires that only the PHI needed to accomplish the billing purpose be disclosed on financial documents.
CMAA Financial Management and Accounts Receivable 4
A patient's insurance EOB shows a 'contractual adjustment' of $150.
What does this mean?