HAC Healthcare Insurance & Claims Processing 3 — Questions and Answers
Question 1: A provider writes off the difference between their billed charge and the payer-contracted rate. This write-off is called a:
- Bad debt adjustment
- Contractual adjustment (Correct answer)
- Charity care adjustment
- Administrative write-off
Correct answer: Contractual adjustment
A contractual adjustment reflects the difference between the provider's billed charge and the negotiated contracted rate the provider has agreed to accept.
Question 2: Which Medicare Part covers inpatient hospital stays, skilled nursing facility care, and hospice?
- Medicare Part A (Correct answer)
- Medicare Part B
- Medicare Part C
- Medicare Part D
Correct answer: Medicare Part A
Medicare Part A is the hospital insurance component that covers inpatient hospital care, skilled nursing facilities, hospice, and some home health services.
Question 3: Under HIPAA, the standard code set for outpatient physician services and procedures is:
- ICD-10-PCS
- CPT/HCPCS Level I and II (Correct answer)
- DRG codes
- APC codes
Correct answer: CPT/HCPCS Level I and II
HIPAA mandates the use of CPT (Current Procedural Terminology) and HCPCS Level II codes for reporting outpatient and physician services on professional claims.
Question 4: What is the purpose of an Advance Beneficiary Notice (ABN) in Medicare billing?
- To notify Medicare of a patient's change in primary coverage
- To inform a Medicare patient that a service may not be covered and obtain their agreement to pay (Correct answer)
- To request prior authorization for a procedure
- To appeal a Medicare claim denial
Correct answer: To inform a Medicare patient that a service may not be covered and obtain their agreement to pay
An ABN is issued to a Medicare patient before a non-covered or potentially denied service, allowing the provider to collect payment from the patient if Medicare denies the claim.
Question 5: A claim submitted more than 365 days after the date of service is denied by a commercial payer. This denial is categorized as:
- Timely filing denial (Correct answer)
- Medical necessity denial
- Duplicate claim denial
- Authorization denial
Correct answer: Timely filing denial
Timely filing denials occur when claims are submitted after the payer's deadline, which is typically defined in the provider's contract and can range from 90 days to 2 years.
Question 6: In value-based care reimbursement, what does a 'shared savings' model incentivize providers to do?
- Bill for as many services as possible to maximize revenue
- Reduce the total cost of care for a defined population while meeting quality benchmarks (Correct answer)
- Shift patients to higher-cost facilities to earn bonuses
- Focus exclusively on inpatient care to control costs
Correct answer: Reduce the total cost of care for a defined population while meeting quality benchmarks
Shared savings models reward providers who keep total care costs below a benchmark while meeting quality metrics, allowing them to share in the resulting savings.
Question 7: Which of the following is an example of a 'clean claim' in healthcare billing?
- A claim missing the attending physician's NPI
- A claim submitted with all required data elements, no errors, and within the timely filing period (Correct answer)
- A claim appealed after an initial denial
- A claim with a pending prior authorization review
Correct answer: A claim submitted with all required data elements, no errors, and within the timely filing period
A clean claim contains all required data elements, is free of errors or omissions, has valid codes, and is submitted within the payer's timely filing window.
HAC Healthcare Insurance & Claims Processing 3
A provider writes off the difference between their billed charge and the payer-contracted rate.
This write-off is called a: