CPAT Prior Authorization & Precertification 2 — Questions and Answers
Question 1: Which payer program uses a list of services that require authorization, often published in a payer's provider manual?
- Formulary
- Prior authorization list (PAL) (Correct answer)
- Explanation of Benefits (EOB)
- Fee schedule
Correct answer: Prior authorization list (PAL)
Payers publish a prior authorization list identifying exactly which services, drugs, or procedures require advance approval before coverage applies.
Question 2: A precertification is obtained for 5 inpatient days. The patient stays 8 days. What must the patient account technician do?
- Submit a corrected claim for 8 days without notifying the payer
- Request a concurrent review extension for the additional days (Correct answer)
- Discharge the patient on day 5
- Apply the additional days to patient liability without payer notice
Correct answer: Request a concurrent review extension for the additional days
A concurrent review extension must be requested when the patient's stay exceeds the originally authorized length to maintain coverage for additional days.
Question 3: Which coding set is most commonly used to communicate procedures when requesting prior authorization?
- ICD-10-CM only
- CPT/HCPCS codes (Correct answer)
- DRG codes
- NDC codes
Correct answer: CPT/HCPCS codes
CPT and HCPCS codes identify the specific procedures requested, which payers use to evaluate authorization criteria.
Question 4: What is the primary purpose of a Letter of Medical Necessity (LMN) in the authorization process?
- To inform the patient of their financial responsibility
- To demonstrate that a requested service is clinically appropriate for the patient's condition (Correct answer)
- To appeal a claim that has already been paid incorrectly
- To transfer care to another provider network
Correct answer: To demonstrate that a requested service is clinically appropriate for the patient's condition
An LMN is written by the physician to justify that the requested service is medically necessary, supporting the authorization request.
Question 5: Under Medicare Advantage plans, which entity is responsible for issuing prior authorizations?
- CMS directly
- The Medicare Administrative Contractor (MAC)
- The Medicare Advantage plan (private insurer) (Correct answer)
- The hospital's utilization management team
Correct answer: The Medicare Advantage plan (private insurer)
Medicare Advantage plans are administered by private insurers who set their own coverage policies, including prior authorization requirements, within CMS guidelines.
Question 6: A referral authorization differs from a prior authorization in that it:
- Requires hospital inpatient admission
- Is issued by the primary care physician to allow the patient to see a specialist (Correct answer)
- Only applies to Medicare beneficiaries
- Covers emergency department visits automatically
Correct answer: Is issued by the primary care physician to allow the patient to see a specialist
A referral authorization is a PCP's formal approval for a patient to see a specialist, which is distinct from a payer's prior authorization for a specific service.
Question 7: If a prior authorization is obtained but the patient's insurance coverage lapses before the service is rendered, the authorization is:
- Still valid because it was issued before the lapse
- Voided, as authorization is contingent on active coverage at the time of service (Correct answer)
- Transferable to the patient's new insurance plan
- Extended automatically by the payer for 90 days
Correct answer: Voided, as authorization is contingent on active coverage at the time of service
A prior authorization is only valid while the patient has active coverage with that payer; a lapse in coverage invalidates the authorization.
CPAT Prior Authorization & Precertification 2
Which payer program uses a list of services that require authorization, often published in a payer's provider manual?