CMM Revenue Cycle Management & Medical Billing 1 — Questions and Answers
Question 1: Which step in the revenue cycle occurs BEFORE a patient visit to ensure financial responsibility is established?
- Claims adjudication
- Eligibility verification (Correct answer)
- Accounts receivable follow-up
- Remittance posting
Correct answer: Eligibility verification
Eligibility verification confirms a patient's insurance coverage and benefits before the visit, reducing claim denials.
Question 2: A medical practice has a Days in Accounts Receivable (DAR) of 52 days. According to best practices, this figure indicates:
- Excellent billing efficiency
- A problem requiring immediate intervention
- Performance slightly above the 45-day benchmark (Correct answer)
- An acceptable rate for specialty practices only
Correct answer: Performance slightly above the 45-day benchmark
A DAR of 52 days exceeds the industry benchmark of 45 days, signaling the practice's collections are slower than optimal.
Question 3: What is a 'clean claim' in medical billing?
- A claim with no patient balance due
- A claim submitted without any attachments
- A claim that contains all required information for prompt payer processing (Correct answer)
- A claim that has been paid in full by the insurance carrier
Correct answer: A claim that contains all required information for prompt payer processing
A clean claim includes all required data elements and is free of errors, enabling the payer to process it without requesting additional information.
Question 4: Under the Medicare Physician Fee Schedule, which component accounts for the largest portion of the relative value unit (RVU)?
- Malpractice expense RVU
- Practice expense RVU
- Geographic practice cost index (GPCI)
- Physician work RVU (Correct answer)
Correct answer: Physician work RVU
Physician work RVU, which reflects the time, skill, and effort of the provider, typically constitutes the largest portion of the total RVU.
Question 5: A claim is denied with remark code CO-4. This code indicates:
- The service was not medically necessary
- The procedure code is inconsistent with the modifier (Correct answer)
- The claim was submitted past the timely filing deadline
- The patient is not eligible on the date of service
Correct answer: The procedure code is inconsistent with the modifier
CO-4 (Claim Adjustment Reason Code 4) means the service or procedure code is inconsistent with the modifier, requiring correction before resubmission.
Question 6: Which federal law requires that physician practices implement specific safeguards to protect electronically transmitted health information during billing processes?
- Stark Law
- False Claims Act
- HIPAA Security Rule (Correct answer)
- Anti-Kickback Statute
Correct answer: HIPAA Security Rule
The HIPAA Security Rule mandates administrative, physical, and technical safeguards for electronic protected health information (ePHI), including billing data.
Question 7: In medical billing, what does the term 'contractual adjustment' represent?
- The amount the patient owes after insurance pays
- The difference between the billed charge and the payer's allowed amount (Correct answer)
- A penalty applied for late claim submission
- The write-off applied when a patient cannot pay
Correct answer: The difference between the billed charge and the payer's allowed amount
A contractual adjustment is the negotiated discount between the provider's billed charge and the payer's contracted allowed amount that the provider agrees to write off.
CMM Revenue Cycle Management & Medical Billing 1
Which step in the revenue cycle occurs BEFORE a patient visit to ensure financial responsibility is established?