Medical Billing Software Medical Billing Software Claims Processing & Denial Management 2 — Questions and Answers
Question 1: What is a Remittance Advice (RA) and what HIPAA transaction set carries it electronically?
- A patient statement sent via the 837P transaction
- A payer's payment explanation sent via the 835 transaction (Correct answer)
- An eligibility response sent via the 271 transaction
- A claim status update sent via the 277 transaction
Correct answer: A payer's payment explanation sent via the 835 transaction
A Remittance Advice details how a payer processed each claim, including payments, adjustments, and denial reasons, and is transmitted electronically via the HIPAA 835 transaction.
Question 2: In medical billing, what is claim 'bundling' and how does it affect reimbursement?
- Submitting multiple claims for the same patient at the same time, increasing total reimbursement
- Payer practice of combining two separately billed procedures into one payment at a lower rate (Correct answer)
- Grouping unrelated diagnoses on a single claim to reduce administrative overhead
- Adding multiple modifiers to a single CPT code to increase allowed amounts
Correct answer: Payer practice of combining two separately billed procedures into one payment at a lower rate
Bundling occurs when a payer combines two procedures considered components of a single service and pays only the allowable for the primary code, reducing reimbursement.
Question 3: What does coordination of benefits (COB) determine in a claim with multiple payers?
- Whether a claim qualifies for fast-track adjudication
- The order in which primary and secondary insurers pay and their respective financial responsibilities (Correct answer)
- Whether a provider participates in both payer networks
- The diagnosis codes that apply to the patient's condition
Correct answer: The order in which primary and secondary insurers pay and their respective financial responsibilities
COB rules establish which insurer pays first (primary) and which pays second (secondary), preventing duplicate payments and ensuring correct allocation of costs.
Question 4: Which of the following best describes a 'crossover claim'?
- A claim submitted to both a commercial insurer and Medicare simultaneously
- A Medicare claim that is automatically forwarded to Medicaid or a Medicare Supplement for secondary payment (Correct answer)
- A claim that spans two calendar years
- A claim resubmitted after being denied by the primary payer
Correct answer: A Medicare claim that is automatically forwarded to Medicaid or a Medicare Supplement for secondary payment
A crossover claim is a Medicare claim that is automatically forwarded to the patient's secondary payer (Medicaid or Medigap) after Medicare has adjudicated it.
Question 5: What is the National Correct Coding Initiative (NCCI) designed to prevent?
- Late claim submissions
- Incorrect use of procedure code combinations that constitute improper unbundling (Correct answer)
- Fraudulent prior authorization requests
- Duplicate patient registrations across systems
Correct answer: Incorrect use of procedure code combinations that constitute improper unbundling
NCCI edits establish code pairs that cannot be billed together because one is considered inclusive of the other, preventing improper unbundling that inflates reimbursement.
Question 6: When a payer issues a denial with reason code CO-4, what corrective action is typically required?
- Resubmit with the correct modifier that satisfies the procedure code requirement (Correct answer)
- Appeal with additional clinical documentation to support medical necessity
- Verify patient eligibility and resubmit with corrected insurance information
- Bill the patient directly because the service is not a covered benefit
Correct answer: Resubmit with the correct modifier that satisfies the procedure code requirement
CO-4 indicates that the procedure code is inconsistent with the modifier used; the correct action is to review the modifier requirements and resubmit with the appropriate modifier.
Medical Billing Software Medical Billing Software Claims Processing & Denial Management 2
What is a Remittance Advice (RA) and what HIPAA transaction set carries it electronically?