CMAS Insurance Verification & Prior Authorization 1 — Questions and Answers
Question 1: What is the primary purpose of insurance verification in a medical office?
- To determine the patient's diagnosis before the visit
- To confirm the patient has active coverage and understand their benefits before services are rendered (Correct answer)
- To collect the patient's full premium payment upfront
- To notify the insurance company of a potential lawsuit
Correct answer: To confirm the patient has active coverage and understand their benefits before services are rendered
Insurance verification confirms active coverage, deductibles, copays, and covered services so the office can inform the patient of their financial responsibility before treatment.
Question 2: Which document does an insurance company send to a patient and provider summarizing how a claim was processed and what the patient owes?
- Superbill
- Remittance Advice (RA)
- Explanation of Benefits (EOB) (Correct answer)
- Certificate of Coverage (COC)
Correct answer: Explanation of Benefits (EOB)
An Explanation of Benefits (EOB) details the services billed, the amount allowed, what insurance paid, and the patient's remaining responsibility.
Question 3: What does Coordination of Benefits (COB) determine when a patient has two insurance plans?
- Which provider is the patient's primary care physician
- Which insurance plan pays first and how much the secondary plan will contribute (Correct answer)
- Whether the patient qualifies for Medicaid
- The maximum out-of-pocket limit for the policy year
Correct answer: Which insurance plan pays first and how much the secondary plan will contribute
COB rules determine the order in which multiple insurance plans pay to prevent overpayment and ensure combined payments do not exceed 100% of the allowed amount.
Question 4: Prior authorization (precertification) is MOST commonly required for which type of service?
- Routine annual physical examinations
- Emergency room visits for life-threatening conditions
- Elective surgeries and specialty referrals (Correct answer)
- Standard laboratory blood draws ordered by a PCP
Correct answer: Elective surgeries and specialty referrals
Insurers require prior authorization for non-urgent or elective procedures and specialist services to verify medical necessity before approving coverage.
Question 5: When verifying a patient's insurance, which of the following pieces of information is MOST critical to collect?
- The patient's employer's annual revenue
- The name of the insurance agent who sold the policy
- The group number, member ID, effective date, and copay/deductible amounts (Correct answer)
- The patient's prior year tax return information
Correct answer: The group number, member ID, effective date, and copay/deductible amounts
Group number, member ID, effective/termination dates, and cost-sharing details (copay, deductible, coinsurance) are essential to determine active coverage and patient liability.
Question 6: A patient's insurance plan has a $1,500 annual deductible and they have met $900 so far. How much of the deductible remains before insurance begins paying?
- $900
- $1,500
- $600 (Correct answer)
- $2,400
Correct answer: $600
$1,500 total deductible minus $900 already met equals $600 remaining before the insurer begins covering costs.
Question 7: What is a formulary in the context of health insurance?
- A standardized patient intake form
- A list of prescription drugs covered by an insurance plan (Correct answer)
- A government-mandated fee schedule for procedures
- A document authorizing a patient to see a specialist
Correct answer: A list of prescription drugs covered by an insurance plan
A formulary is the insurer's approved list of prescription medications, often organized into tiers that determine the patient's copay for each drug.
CMAS Insurance Verification & Prior Authorization 1
What is the primary purpose of insurance verification in a medical office?