Medical Billing Software Medical Insurance Billing 5 — Questions and Answers
Question 1: What does 'accounts receivable (AR) aging' track in a medical billing software system?
- The age of a provider's billing software license
- Outstanding claim balances categorized by how long they have been unpaid (Correct answer)
- Patient appointment history sorted by date
- Expired CPT codes that need updating
Correct answer: Outstanding claim balances categorized by how long they have been unpaid
AR aging reports categorize unpaid claims into time buckets (e.g., 0–30, 31–60, 61–90 days) to help practices identify and prioritize collection efforts.
Question 2: Which federal law established requirements for electronic transmission of health information and privacy protections in medical billing?
- Affordable Care Act (ACA)
- Health Insurance Portability and Accountability Act (HIPAA) (Correct answer)
- Emergency Medical Treatment and Labor Act (EMTALA)
- Stark Law
Correct answer: Health Insurance Portability and Accountability Act (HIPAA)
HIPAA established national standards for electronic healthcare transactions and set privacy and security requirements for protected health information (PHI).
Question 3: In medical billing, what is a 'dirty claim'?
- A claim submitted after the timely filing deadline
- A claim that contains errors or missing information that prevents automatic processing (Correct answer)
- A claim involving fraudulent charges flagged by a payer
- A claim submitted without a patient signature on file
Correct answer: A claim that contains errors or missing information that prevents automatic processing
A dirty claim contains errors such as incorrect patient demographics, missing codes, or invalid information that cause the payer to reject or suspend it rather than process it automatically.
Question 4: What is the significance of the 'taxonomy code' on a medical claim?
- It identifies the patient's disease classification for research purposes
- It specifies the provider's specialty or type of practice for accurate claim routing and payment (Correct answer)
- It assigns a billing priority when multiple diagnoses are present
- It links the claim to the appropriate fee schedule version
Correct answer: It specifies the provider's specialty or type of practice for accurate claim routing and payment
The taxonomy code is a 10-character alphanumeric code that describes a provider's type, classification, and specialty, used by payers to route claims and apply correct reimbursement rules.
Question 5: Under Medicare's fee schedule, what does the term 'non-participating provider' mean?
- A provider who is excluded from Medicare due to fraud
- A provider who has not signed a participation agreement with Medicare and may collect only up to the limiting charge (Correct answer)
- A provider who treats only non-Medicare patients
- A provider whose enrollment application is pending
Correct answer: A provider who has not signed a participation agreement with Medicare and may collect only up to the limiting charge
Non-participating providers have not agreed to accept Medicare's approved amount as full payment, so they may bill patients up to 115% of the non-par fee schedule (the limiting charge).
Question 6: What does 'bundling' mean in the context of medical billing edits?
- Submitting all of a patient's claims for the year in one batch
- Combining payment for two or more related procedures into a single reimbursement (Correct answer)
- Grouping multiple patients' claims for a single payer submission
- Packaging diagnosis codes with matching procedure codes
Correct answer: Combining payment for two or more related procedures into a single reimbursement
Bundling occurs when an insurer combines payment for two or more related procedures into one payment because one procedure is considered integral to another (e.g., per NCCI edits).
Question 7: A claim is denied with reason 'CO-4: The procedure code is inconsistent with the modifier.' What is the appropriate corrective action?
- Resubmit the claim with a different diagnosis code
- Review and correct the modifier used, then resubmit or appeal with documentation supporting the modifier (Correct answer)
- Write off the balance as a contractual adjustment
- Request a peer-to-peer review with the payer's medical director
Correct answer: Review and correct the modifier used, then resubmit or appeal with documentation supporting the modifier
CO-4 indicates the modifier applied does not match the procedure code billed, so the biller should verify which modifier is appropriate for the service and resubmit the corrected claim.
Medical Billing Software Medical Insurance Billing 5
What does 'accounts receivable (AR) aging' track in a medical billing software system?