CMS Medicare Specialist Claims Processing & Billing Procedures 3 — Questions and Answers
Question 1: A hospital submits an inpatient claim under Medicare Part A. Under which payment system is it typically reimbursed?
- Resource-Based Relative Value Scale (RBRVS)
- Inpatient Prospective Payment System (IPPS) using MS-DRGs (Correct answer)
- Ambulatory Payment Classifications (APCs)
- Fee schedule based on actual charges
Correct answer: Inpatient Prospective Payment System (IPPS) using MS-DRGs
Medicare pays acute care hospitals for inpatient stays under the IPPS using Medicare Severity Diagnosis Related Groups (MS-DRGs).
Question 2: What is the purpose of a Medicare Summary Notice (MSN)?
- It is sent to providers detailing claim payment amounts
- It is a remittance advice sent to suppliers only
- It is sent to beneficiaries explaining what Medicare paid and any patient liability (Correct answer)
- It replaces the Explanation of Benefits for commercial insurers
Correct answer: It is sent to beneficiaries explaining what Medicare paid and any patient liability
The MSN is sent to Medicare beneficiaries to inform them of services billed, what Medicare paid, and their cost-sharing responsibility.
Question 3: Which of the following best describes a Medicare 'crossover' claim?
- A claim submitted to two different MACs simultaneously
- A claim automatically forwarded from Medicare to a secondary insurer (e.g., Medicaid or Medigap) after Medicare adjudication (Correct answer)
- A claim that crosses fiscal years
- A claim submitted after the timely filing limit
Correct answer: A claim automatically forwarded from Medicare to a secondary insurer (e.g., Medicaid or Medigap) after Medicare adjudication
A crossover claim is one that Medicare automatically forwards to a secondary payer (such as Medicaid or a Medigap plan) after making its primary payment determination.
Question 4: Under Medicare's National Correct Coding Initiative (NCCI), what is a 'column 2' code?
- A code that can always be billed separately from the column 1 code
- A component code that is bundled into the column 1 code and cannot be billed separately without an appropriate modifier (Correct answer)
- A code reserved for facility billing only
- A diagnosis code that is mutually exclusive with another
Correct answer: A component code that is bundled into the column 1 code and cannot be billed separately without an appropriate modifier
In NCCI edits, the column 2 code is considered a component of the column 1 code and is generally not separately reimbursable unless a modifier indicates a distinct service.
Question 5: A provider receives a Remittance Advice (RA) with claim adjustment reason code (CARC) 4. What does this indicate?
- The service is not covered by Medicare
- The claim was denied because the service requires prior authorization
- The service is covered but not at this frequency
- The claim or service lacks information needed for adjudication (Correct answer)
Correct answer: The claim or service lacks information needed for adjudication
CARC 4 indicates the claim or service lacks the information needed for adjudication; the provider must resubmit with the missing information.
Question 6: For Medicare Part B claims, what does 'assignment' mean when a provider accepts it?
- The provider agrees to bill the patient their full usual charge
- The provider agrees to accept the Medicare-approved amount as payment in full and cannot balance bill the beneficiary beyond cost-sharing (Correct answer)
- The provider transfers the claim to a collection agency
- The beneficiary assigns their Medicare card to the provider permanently
Correct answer: The provider agrees to accept the Medicare-approved amount as payment in full and cannot balance bill the beneficiary beyond cost-sharing
Accepting assignment means the provider agrees Medicare's approved amount is payment in full; they collect deductible/coinsurance but cannot balance bill.
Question 7: Which type of edit in Medicare claims processing checks that the diagnosis code supports the medical necessity of the procedure billed?
- Correct Coding Initiative (CCI) edit
- Local Coverage Determination (LCD) / National Coverage Determination (NCD) edit (Correct answer)
- Outpatient Code Editor (OCE) edit
- Medicare Secondary Payer (MSP) edit
Correct answer: Local Coverage Determination (LCD) / National Coverage Determination (NCD) edit
LCD and NCD edits verify that the submitted diagnosis code is on the approved list of covered indications, establishing medical necessity for the billed service.
CMS Medicare Specialist Claims Processing & Billing Procedures 3
A hospital submits an inpatient claim under Medicare Part A.
Under which payment system is it typically reimbursed?