PAR PAR Denial Management and Point of Service Collections 2 — Questions and Answers
Question 1: What is 'balance billing' and when is it prohibited?
- Charging a patient the difference between a provider's billed charge and the insurer's allowed amount; prohibited for in-network providers under most contracts (Correct answer)
- Sending a second bill after a first one goes unpaid
- Billing both the patient and insurer for the same service
- Charging different rates to different patients for the same service
Correct answer: Charging a patient the difference between a provider's billed charge and the insurer's allowed amount; prohibited for in-network providers under most contracts
Balance billing charges patients more than the contracted rate, and in-network providers are contractually prohibited from billing patients beyond their required cost-sharing (deductible, copay, coinsurance).
Question 2: Under the 'birthday rule' for COB, how is the primary insurer determined for a dependent child?
- The parent whose birthday falls earlier in the calendar year has the primary plan for the dependent child (Correct answer)
- The parent who enrolled the child first has the primary plan
- The parent with the lower deductible plan is always primary
- The father's plan is always primary for dependent children
Correct answer: The parent whose birthday falls earlier in the calendar year has the primary plan for the dependent child
The birthday rule states that when a child is covered under both parents' plans, the plan of the parent whose birthday (month and day) falls first in the calendar year is primary.
Question 3: What is 'subrogation' in the context of health insurance?
- The right of an insurer to seek reimbursement from a liable third party after paying a claim on behalf of the insured (Correct answer)
- The process of transferring a patient's balance to a collection agency
- The assignment of a patient's benefits directly to a provider
- A secondary payer's right to deny a claim paid by the primary insurer
Correct answer: The right of an insurer to seek reimbursement from a liable third party after paying a claim on behalf of the insured
Subrogation allows an insurer that paid a medical claim to recover those costs from a third party (such as a liability insurer) that is ultimately responsible for the injury.
Question 4: What is 'medical necessity' and why does it matter for claims?
- Services or supplies that are appropriate and consistent with the diagnosis, meeting accepted standards of care; required for insurers to pay claims (Correct answer)
- The minimum number of procedures a provider must perform per visit
- A federal standard requiring all hospitals to provide emergency care regardless of ability to pay
- The documentation requirement for inpatient psychiatric admissions
Correct answer: Services or supplies that are appropriate and consistent with the diagnosis, meeting accepted standards of care; required for insurers to pay claims
Medical necessity means that a service is appropriate, reasonable, and consistent with evidence-based clinical standards, and payers require it to be established before paying claims.
Question 5: What is an 'appeal' in the medical billing process?
- A formal request to an insurer to reconsider a denied or underpaid claim with supporting clinical or administrative documentation (Correct answer)
- A patient's request for an itemized bill
- A provider's request to CMS to change a billing code
- A legal complaint filed against an insurer for non-payment
Correct answer: A formal request to an insurer to reconsider a denied or underpaid claim with supporting clinical or administrative documentation
An appeal is a written request submitted to a payer asking them to overturn a denial or increase reimbursement, typically accompanied by supporting clinical documentation or coding rationale.
Question 6: What is the 'No Surprises Act' and how does it affect patient access workflows?
- A federal law effective 2022 that protects patients from unexpected out-of-network bills and requires Good Faith Estimates for uninsured patients (Correct answer)
- A CMS rule requiring providers to post all service prices online
- A state law mandating 30-day notice before sending accounts to collections
- A HIPAA amendment requiring electronic delivery of EOBs
Correct answer: A federal law effective 2022 that protects patients from unexpected out-of-network bills and requires Good Faith Estimates for uninsured patients
The No Surprises Act limits surprise billing for emergency services and requires providers to give uninsured patients a Good Faith Estimate of expected charges before scheduled services.
PAR PAR Denial Management and Point of Service Collections 2
What is 'balance billing' and when is it prohibited?