CRCR Insurance Verification and Authorization 5 — Questions and Answers
Question 1: Which of the following is the most common reason a prior authorization is denied on initial submission?
- The physician's NPI is not on file with the payer
- Insufficient or incomplete clinical documentation supporting medical necessity (Correct answer)
- The patient's copay was not collected at time of service
- The procedure was billed using an outdated CPT code
Correct answer: Insufficient or incomplete clinical documentation supporting medical necessity
Payers deny authorizations most frequently when the submitted clinical documentation does not adequately demonstrate that the requested service meets their medical necessity criteria.
Question 2: A hospital is verifying benefits for a patient with a Medicare Advantage (MA) plan. Why is this verification different from standard Medicare?
- Medicare Advantage patients do not have deductibles or copays
- Medicare Advantage plans are administered by private insurers with their own benefit structures, networks, and authorization requirements (Correct answer)
- Medicare Advantage always covers more services than Original Medicare
- Prior authorization is never required under Medicare Advantage
Correct answer: Medicare Advantage plans are administered by private insurers with their own benefit structures, networks, and authorization requirements
Medicare Advantage plans are private insurance products approved by CMS, and each plan sets its own cost-sharing, network, and prior authorization rules that differ from Original Medicare.
Question 3: A revenue cycle representative is verifying benefits for a patient scheduled for a colonoscopy. The payer classifies it as preventive. What should the representative confirm regarding patient cost-sharing?
- Preventive colonoscopies always result in a $50 copay
- Whether the plan covers preventive colonoscopies at 100% and whether a diagnostic finding (polyp removal) could change the cost-sharing (Correct answer)
- That the patient meets their out-of-pocket maximum before scheduling
- That the procedure requires a specialist referral
Correct answer: Whether the plan covers preventive colonoscopies at 100% and whether a diagnostic finding (polyp removal) could change the cost-sharing
Many plans cover preventive colonoscopies at 100%, but if a polyp is removed during the procedure, it may be reclassified as diagnostic, triggering deductible and coinsurance — patients must be informed of this risk.
Question 4: What is a 'clean claim' in the context of insurance billing and how does prior authorization affect it?
- A claim submitted without any diagnosis codes
- A claim that contains all required data elements and meets payer requirements, including any required authorization numbers, allowing it to be processed without delay (Correct answer)
- A claim that is automatically approved without clinical review
- A claim that has been fully adjudicated and paid
Correct answer: A claim that contains all required data elements and meets payer requirements, including any required authorization numbers, allowing it to be processed without delay
A clean claim includes all mandatory fields completed correctly — including authorization numbers when required — so the payer can process and adjudicate it without requesting additional information.
Question 5: Which scenario best illustrates the risk of not verifying insurance on the date of service?
- The patient's copay is slightly higher than expected
- The patient's coverage was terminated the day before the visit, leaving the provider with an uncollectable balance (Correct answer)
- The physician must postpone a non-urgent procedure
- The payer requests additional clinical notes after billing
Correct answer: The patient's coverage was terminated the day before the visit, leaving the provider with an uncollectable balance
Coverage can terminate any day; if eligibility is not re-confirmed on the actual date of service, the provider may render care for a patient who is no longer insured, creating a financial loss.
Question 6: A patient with a PPO plan sees an out-of-network specialist without a referral. Which statement best describes the financial outcome?
- The PPO plan will not pay anything because no referral was obtained
- The PPO plan may pay a reduced benefit for out-of-network services, leaving the patient with higher cost-sharing, but a referral is not required (Correct answer)
- The PPO plan covers out-of-network services at the same rate as in-network
- The patient must retroactively obtain a referral within 30 days for reimbursement
Correct answer: The PPO plan may pay a reduced benefit for out-of-network services, leaving the patient with higher cost-sharing, but a referral is not required
PPO plans allow members to see out-of-network providers without a referral, but at a lower reimbursement rate, resulting in higher patient cost-sharing compared to in-network services.
Question 7: When a payer requests 'peer-to-peer' review after denying a prior authorization, what does this process involve?
- Two revenue cycle specialists reviewing the denied claim for billing errors
- The treating physician speaking directly with the payer's medical director to present clinical justification for the requested service (Correct answer)
- A government agency reviewing the denial for compliance violations
- A second payer being brought in to adjudicate the disputed authorization
Correct answer: The treating physician speaking directly with the payer's medical director to present clinical justification for the requested service
A peer-to-peer review is a direct physician-to-physician conversation between the treating provider and the payer's medical director, giving the clinician an opportunity to advocate for medical necessity before a formal appeal is filed.
CRCR Insurance Verification and Authorization 5
Which of the following is the most common reason a prior authorization is denied on initial submission?