CRCR Denial Management and Appeals 2 — Questions and Answers
Question 1: A claim is denied with reason code CO-4. What does this denial indicate?
- The service is not covered under the patient's plan
- The procedure code is inconsistent with the modifier (Correct answer)
- The claim was submitted after the timely filing deadline
- The patient's insurance was not active on the date of service
Correct answer: The procedure code is inconsistent with the modifier
CO-4 indicates the service was denied because the procedure code is inconsistent with the modifier used on the claim.
Question 2: Which of the following best describes a 'soft denial' in revenue cycle management?
- A denial that is permanent and cannot be appealed
- A denial that can be resolved by submitting additional information or correcting the claim (Correct answer)
- A denial issued by a secondary payer after primary adjudication
- A denial related exclusively to coordination of benefits disputes
Correct answer: A denial that can be resolved by submitting additional information or correcting the claim
A soft denial is a temporary denial that can be overturned by providing missing information, correcting errors, or submitting supporting documentation.
Question 3: When a payer denies a claim stating 'services not medically necessary,' what is the most critical document to include in an appeal?
- The patient's billing history
- A letter of medical necessity from the treating physician (Correct answer)
- The facility's accreditation certificate
- A copy of the explanation of benefits from a prior claim
Correct answer: A letter of medical necessity from the treating physician
A letter of medical necessity from the treating physician is the primary document needed to justify that the services were clinically appropriate.
Question 4: A hospital receives a denial for an inpatient stay coded as DRG 470 (Major Joint Replacement). The payer argues the patient did not meet criteria for inpatient admission. Which appeal strategy is most appropriate?
- Recode the stay as outpatient and resubmit
- Submit clinical documentation supporting the inpatient level of care decision (Correct answer)
- File a grievance with the state insurance commissioner immediately
- Accept the denial and write off the balance
Correct answer: Submit clinical documentation supporting the inpatient level of care decision
Submitting clinical documentation that supports the inpatient admission criteria is the appropriate first step in appealing a medical necessity denial for an inpatient stay.
Question 5: Which federal regulation governs the external appeal process for patients enrolled in employer-sponsored health plans?
- HIPAA Privacy Rule
- ERISA (Employee Retirement Income Security Act) (Correct answer)
- COBRA Continuation Coverage
- The False Claims Act
Correct answer: ERISA (Employee Retirement Income Security Act)
ERISA governs the claims and appeals process for most employer-sponsored group health plans, including the right to an external appeal.
Question 6: What is the purpose of an Advance Beneficiary Notice (ABN) in the context of denial management?
- It authorizes the provider to bill Medicare for all services rendered
- It informs the patient that Medicare may not cover the service and obtains consent to bill the patient (Correct answer)
- It requests prior authorization from Medicare before service delivery
- It serves as a formal appeal request to the Medicare Administrative Contractor
Correct answer: It informs the patient that Medicare may not cover the service and obtains consent to bill the patient
An ABN notifies the patient that Medicare may deny coverage for a specific service and obtains the patient's agreement to be responsible for payment if Medicare denies it.
Question 7: A claim denial states CO-97: 'The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.' What is the most likely cause?
- The claim was submitted to the wrong insurance carrier
- A bundling edit has combined the denied service into another previously paid service (Correct answer)
- The claim lacks a required referral number
- The patient has exceeded their annual benefit maximum
Correct answer: A bundling edit has combined the denied service into another previously paid service
CO-97 typically results from NCCI (National Correct Coding Initiative) bundling edits that include the denied service within a previously paid, more comprehensive code.
CRCR Denial Management and Appeals 2
A claim is denied with reason code CO-4.
What does this denial indicate?