Health Insurance Claim Processing Flashcards

Which form is used by a physician's office to submit claims for outpatient services?

Answer: CMS-1500

The CMS-1500 form is the standard claim form used by physicians and other non-institutional providers to bill Medicare Part B and most other insurance carriers for outpatient services. The UB-04 form is used for institutional claims, such as those from hospitals or skilled nursing facilities.

What does the term 'adjudication' refer to in the health insurance claim process?

Answer: The insurance carrier's process of reviewing a claim and determining payment

Adjudication is the step where the payer (insurance company) evaluates a submitted claim against the patient's policy benefits, provider contract, and medical necessity. This process determines whether the claim should be paid, denied, or reduced in amount.

A patient's insurance requires pre-authorization for an MRI. What is the primary purpose of this process?

Answer: To obtain approval from the insurance company for a service to be covered

Pre-authorization, or prior authorization, is a process used by insurance companies to verify that a specific service, prescription, or procedure is medically necessary and covered under the patient's plan. Obtaining this approval beforehand helps prevent claim denials for non-covered services.

Which coding system is used to report medical procedures and services performed by physicians?

Answer: CPT (Current Procedural Terminology)

The CPT (Current Procedural Terminology) coding system, maintained by the American Medical Association (AMA), is used to describe and report medical, surgical, and diagnostic services. ICD-10-CM is used for diagnoses, and HCPCS Level II is for supplies and non-physician services.

A patient receives a document from their insurance company that details how a claim was processed, including the amount paid and the patient's financial responsibility. What is this document called?

Answer: Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a statement sent from the health insurance company directly to the patient to explain what medical treatments and/or services were paid for on their behalf. A Remittance Advice (RA) is a similar document sent from the payer to the provider.

In health insurance terminology, what is a 'deductible'?

Answer: A specified amount of money that the insured must pay before an insurance company will pay a claim

The deductible is a fixed amount a patient must pay for covered health care services each year before their insurance plan starts to pay. After the deductible is met, the patient typically only pays a copayment or coinsurance for covered services, and the insurance company pays the rest.

When must a provider have a patient sign an Advance Beneficiary Notice of Noncoverage (ABN)?

Answer: When a provider believes a service may not be considered medically necessary by Medicare

An ABN is a waiver of liability that a provider must issue to a Medicare beneficiary before providing services that they believe Medicare will not cover based on medical necessity rules. By signing it, the patient acknowledges they will be financially responsible if Medicare denies payment.