Medical Billing Software Case Studies & Practical Application 5 — Questions and Answers
Question 1: A billing analyst discovers that the practice's contracted rate with a payer is $120 for a CPT code, but the software is consistently posting payments of $95. What is the FIRST step?
- Write off the $25 difference immediately
- Compare the ERA payment detail against the payer contract terms to identify if an underpayment has occurred (Correct answer)
- Resubmit the claim with a higher charge amount
- Accept the lower payment and update the fee schedule to $95
Correct answer: Compare the ERA payment detail against the payer contract terms to identify if an underpayment has occurred
Comparing ERA payment detail against the contracted fee schedule confirms whether the payer is systematically underpaying, which can then be appealed.
Question 2: A hospital outpatient department needs to bill observation services. Which claim form and revenue code combination is REQUIRED?
- CMS-1500 with CPT 99213
- UB-04 with revenue code 0762 for observation (Correct answer)
- CMS-1500 with revenue code 0100
- UB-04 with revenue code 0450 for emergency services
Correct answer: UB-04 with revenue code 0762 for observation
Hospital outpatient observation services are billed on the UB-04 institutional claim form using revenue code 0762.
Question 3: A practice using a cloud-based billing software experiences a ransomware attack on their local network. Patient billing data appears unaffected. Why is the data likely protected?
- Cloud-based billing software stores data on remote servers outside the local network, with independent backups and encryption (Correct answer)
- The ransomware only targets clinical software, not billing
- The billing software vendor paid the ransom automatically
- Local antivirus quarantined the billing data files
Correct answer: Cloud-based billing software stores data on remote servers outside the local network, with independent backups and encryption
Cloud-based billing software stores and backs up data on the vendor's remote infrastructure, which is isolated from local network attacks like ransomware.
Question 4: A billing team is tasked with identifying all claims denied for 'lack of prior authorization' over the past 12 months. Which software workflow should be used?
- Run a denial management report filtered by CO-15 or payer-specific authorization denial codes for the date range (Correct answer)
- Review each patient chart manually for authorization notes
- Call each payer to request a list of denied claims
- Generate a patient statement report for the past 12 months
Correct answer: Run a denial management report filtered by CO-15 or payer-specific authorization denial codes for the date range
Denial management reports filtered by authorization-related denial reason codes (such as CO-15) quickly identify all affected claims across the specified period.
Question 5: A dermatology practice wants to bill for a complex lesion excision and a separate biopsy performed during the same encounter. The payer bundles the biopsy into the excision. What modifier might the billing software apply to allow separate payment?
- Modifier 25
- Modifier 59 (Distinct Procedural Service) (Correct answer)
- Modifier 51
- Modifier GT
Correct answer: Modifier 59 (Distinct Procedural Service)
Modifier 59 (or XS subset modifier) indicates that the biopsy was a distinct procedure separate from the excision, overriding automatic bundling edits.
Question 6: A billing office has integrated their software with a clearinghouse. Claims are submitting successfully, but the practice is not receiving 277CA claim acknowledgment files. What is the MOST likely impact?
- The practice cannot confirm whether claims were accepted or rejected by the payer, delaying denial management (Correct answer)
- Patient payments cannot be posted
- The clearinghouse will automatically resubmit rejected claims
- Provider NPIs will become deactivated
Correct answer: The practice cannot confirm whether claims were accepted or rejected by the payer, delaying denial management
Without 277CA acknowledgment files, the practice has no electronic confirmation of payer acceptance or rejection, creating blind spots in the claims management workflow.
Question 7: A physical therapy practice bills for multiple therapy units per session. The billing software allows up to 4 units for a timed code. A therapist documents 75 minutes of therapeutic exercise. How many units should be billed?
- 1 unit
- 2 units
- 3 units (Correct answer)
- 4 units
Correct answer: 3 units
Using the 8-minute rule, 75 minutes divided by 15 minutes per unit = 5 full units, but with the 8-minute rule rounding, 75 minutes = 3 reportable units under CMS guidelines for outpatient PT.
Medical Billing Software Case Studies & Practical Application 5
A billing analyst discovers that the practice's contracted rate with a payer is $120 for a CPT code, but the software is consistently posting payments of $95.
What is the FIRST step?