CRCR Denial Management and Appeals 4 — Questions and Answers
Question 1: Under Medicare's claim appeal process, which level allows for a hearing before an Administrative Law Judge (ALJ)?
- Level 1 – Redetermination
- Level 2 – Reconsideration by a Qualified Independent Contractor (QIC)
- Level 3 – ALJ Hearing (Correct answer)
- Level 4 – Medicare Appeals Council Review
Correct answer: Level 3 – ALJ Hearing
Level 3 of the Medicare appeals process is a hearing before an Administrative Law Judge, available when the disputed amount meets the minimum threshold.
Question 2: A claim is denied because the referring physician's NPI is missing from the claim form. On which box of the CMS-1500 form should the referring provider's NPI appear?
- Box 17b (Correct answer)
- Box 24j
- Box 33a
- Box 21
Correct answer: Box 17b
The referring provider's NPI is entered in Box 17b of the CMS-1500 claim form.
Question 3: What does 'exhaustion of internal remedies' mean in the context of health plan appeals?
- The provider has written off the balance after failing to collect from the patient
- The claimant has completed all required internal appeal levels before seeking external review (Correct answer)
- The payer has denied the claim at every administrative level internally
- The appeal file has been archived after the statute of limitations has passed
Correct answer: The claimant has completed all required internal appeal levels before seeking external review
Exhaustion of internal remedies means the claimant has pursued and completed all levels of internal appeals required by the plan before they are eligible to request an external independent review.
Question 4: Which of the following best describes the role of a Recovery Audit Contractor (RAC) in the context of denial management?
- They process original Medicare claims on behalf of CMS
- They identify and recover improper payments made by Medicare through post-payment audits (Correct answer)
- They conduct pre-service authorization reviews for Medicare Advantage plans
- They adjudicate appeals filed at the ALJ level
Correct answer: They identify and recover improper payments made by Medicare through post-payment audits
RACs are CMS-contracted auditors that review paid Medicare claims to identify and recover overpayments made due to billing errors or medical necessity issues.
Question 5: A payer denies a claim citing a lack of prior authorization. The provider has documented proof that authorization was obtained verbally. What is the best next step?
- Submit a new claim with a different diagnosis code
- Append the verbal authorization reference number and date to the appeal and request reconsideration (Correct answer)
- Accept the denial and bill the patient the full amount
- Escalate directly to the state insurance commissioner
Correct answer: Append the verbal authorization reference number and date to the appeal and request reconsideration
Documenting the verbal authorization with the reference number, date, and representative name in an appeal letter is the appropriate first step to reverse an authorization-related denial.
Question 6: What is the primary purpose of tracking a denial's 'root cause' in a denial management program?
- To determine which staff member made the billing error for disciplinary action
- To identify process failures upstream so that preventive measures can be implemented (Correct answer)
- To calculate the average reimbursement rate for that payer
- To satisfy CMS reporting requirements for participating providers
Correct answer: To identify process failures upstream so that preventive measures can be implemented
Root cause analysis in denial management identifies systemic process failures—such as registration errors or coding gaps—so that preventive actions can reduce future denial rates.
Question 7: Which metric is used to measure the percentage of total claims that are denied by payers within a given period?
- Days in Accounts Receivable (AR)
- Denial Rate (Correct answer)
- Net Collection Rate
- Clean Claim Rate
Correct answer: Denial Rate
The denial rate measures the proportion of submitted claims that are denied by payers and is a key performance indicator in denial management.
CRCR Denial Management and Appeals 4
Under Medicare's claim appeal process, which level allows for a hearing before an Administrative Law Judge (ALJ)?