HAC Revenue Cycle Management 3 — Questions and Answers
Question 1: A hospital has a gross charge of $10,000, a contractual adjustment of $4,000, and collected $5,500. What is the net collection rate?
- 55%
- 91.7% (Correct answer)
- 85%
- 60%
Correct answer: 91.7%
Net collection rate = Collections / (Gross Charges − Contractual Adjustments) = $5,500 / $6,000 = 91.7%.
Question 2: What is 'prior authorization' in the context of revenue cycle management?
- A post-payment audit conducted by the payer
- Approval obtained from the payer before delivering certain services (Correct answer)
- A signed consent form from the patient
- A physician's attestation of medical necessity after the fact
Correct answer: Approval obtained from the payer before delivering certain services
Prior authorization is payer approval secured before rendering specific services to confirm coverage and medical necessity.
Question 3: Which billing form is primarily used by hospitals and facility-based providers to submit claims to Medicare and Medicaid?
- CMS-1500
- UB-04 (CMS-1450) (Correct answer)
- ADA Dental Claim Form
- HCFA-1490
Correct answer: UB-04 (CMS-1450)
The UB-04 (CMS-1450) is the standard institutional claim form used by hospitals, skilled nursing facilities, and other facility providers.
Question 4: What does 'timely filing' refer to in revenue cycle management?
- Filing taxes for the healthcare organization on time
- Submitting claims to payers within the contractually or legally required time frame (Correct answer)
- Sending patient statements within 30 days of service
- Completing prior authorizations before the patient's appointment
Correct answer: Submitting claims to payers within the contractually or legally required time frame
Timely filing deadlines are set by payers; claims submitted after the deadline are typically denied with no right to appeal.
Question 5: In value-based reimbursement models, providers are primarily rewarded for:
- The volume of services provided
- Achieving quality outcomes and cost efficiency (Correct answer)
- Maximizing inpatient days
- Billing the highest allowable code
Correct answer: Achieving quality outcomes and cost efficiency
Value-based care reimbursement ties payment to quality metrics, patient outcomes, and cost containment rather than service volume.
Question 6: Which of the following is an example of a 'soft denial' in healthcare claims management?
- A permanent denial due to lack of medical necessity
- A request for additional clinical documentation that can be resubmitted (Correct answer)
- A denial for services excluded from the member's plan
- A denial because the service was provided by an out-of-network provider without authorization
Correct answer: A request for additional clinical documentation that can be resubmitted
Soft denials are temporary and can be resolved by submitting additional information; they are not permanent payment refusals.
Question 7: What is 'charge capture' in the revenue cycle process?
- Recording all charges at the time of payer adjudication
- The process of recording all services, supplies, and procedures provided to a patient for billing purposes (Correct answer)
- Collecting patient co-pays at time of service
- Auditing completed claims for accuracy after payment
Correct answer: The process of recording all services, supplies, and procedures provided to a patient for billing purposes
Charge capture is the process of documenting every billable service delivered so that all rendered services can be billed accurately.
HAC Revenue Cycle Management 3
A hospital has a gross charge of $10,000, a contractual adjustment of $4,000, and collected $5,500.
What is the net collection rate?