CRCR CRCR - Certified Revenue Cycle Representative Program Revenue Cycle Management Fundamentals Questions and Answers 5 — Questions and Answers
Question 1: What is the difference between a write-off and a contractual adjustment in healthcare billing?
- They are the same thing and can be used interchangeably
- A contractual adjustment is a pre-negotiated discount per payer contract; a write-off is a balance deemed uncollectable (Correct answer)
- A write-off applies only to Medicare patients; a contractual adjustment applies to commercial payers
- A contractual adjustment reduces the patient balance; a write-off reduces the insurance balance
Correct answer: A contractual adjustment is a pre-negotiated discount per payer contract; a write-off is a balance deemed uncollectable
Contractual adjustments represent the difference between billed charges and the payer's allowed amount per contract, while write-offs reflect amounts determined to be uncollectable after collection efforts.
Question 2: Under HIPAA, what is the standard electronic transaction for submitting a professional claim to a payer?
- 837I
- 837P (Correct answer)
- 835
- 270/271
Correct answer: 837P
The 837P (Professional) transaction is the HIPAA-mandated standard electronic format for submitting professional claims from physicians and other non-institutional providers.
Question 3: Which of the following best describes the purpose of prior authorization in the revenue cycle?
- To verify a patient's identity before a procedure
- To obtain payer approval before certain services are rendered to ensure coverage and payment (Correct answer)
- To confirm a provider is in-network with a specific insurance plan
- To collect patient cost-sharing amounts before the date of service
Correct answer: To obtain payer approval before certain services are rendered to ensure coverage and payment
Prior authorization is a payer requirement where providers must obtain approval before delivering specific services, ensuring the payer deems the service medically necessary and covered.
Question 4: What does the term 'upcoding' refer to in healthcare billing compliance?
- Using the most current version of ICD codes
- Reporting a higher-level or more complex service than was actually provided to obtain greater reimbursement (Correct answer)
- Correcting a previously submitted claim with an updated diagnosis
- Billing for services in advance of their delivery
Correct answer: Reporting a higher-level or more complex service than was actually provided to obtain greater reimbursement
Upcoding is a fraudulent billing practice where providers intentionally report a code for a more expensive service than was performed, which violates the False Claims Act.
Question 5: In managed care contracting, what is a 'carve-out'?
- A provision that excludes certain providers from a network
- A specific service or benefit excluded from a managed care contract and reimbursed under separate terms (Correct answer)
- A penalty clause for exceeding utilization benchmarks
- A patient's right to seek care outside the network
Correct answer: A specific service or benefit excluded from a managed care contract and reimbursed under separate terms
A carve-out separates certain services (e.g., mental health, pharmacy, or lab) from the main managed care arrangement, often reimbursing them under a different fee schedule or through a separate specialty vendor.
Question 6: What is the significance of the 'timely filing' limit in health insurance billing?
- It is the deadline for patients to pay their bills before collections
- It is the payer-specified deadline by which a claim must be submitted or it will be denied as untimely (Correct answer)
- It is the number of days a provider has to appeal a denied claim
- It is the window during which a patient can change their insurance coverage
Correct answer: It is the payer-specified deadline by which a claim must be submitted or it will be denied as untimely
Each payer establishes a timely filing deadline (e.g., 90 days, 1 year from date of service) beyond which claims will be denied, making it critical to track and submit claims promptly.
Question 7: Which payment methodology does Medicare use to reimburse acute inpatient hospital stays?
- Fee-for-service based on billed charges
- Diagnosis-Related Groups (DRGs) under the Inpatient Prospective Payment System (IPPS) (Correct answer)
- Resource-Based Relative Value Scale (RBRVS)
- Per diem rates based on the number of inpatient days
Correct answer: Diagnosis-Related Groups (DRGs) under the Inpatient Prospective Payment System (IPPS)
Medicare's IPPS pays hospitals a predetermined rate based on the patient's DRG, which groups similar diagnoses and procedures, incentivizing efficiency by paying a flat amount regardless of actual costs.
CRCR CRCR - Certified Revenue Cycle Representative Program Revenue Cycle Management Fundamentals Questions and Answers 5
What is the difference between a write-off and a contractual adjustment in healthcare billing?