PAR PAR Denial Management and Point of Service Collections 1 — Questions and Answers
Question 1: What is a 'claim denial' in healthcare revenue cycle?
- A refusal by an insurance payer to reimburse for a submitted claim, in whole or in part (Correct answer)
- A patient's refusal to pay their balance
- A hospital's decision not to accept a patient's insurance
- A CMS penalty for billing errors
Correct answer: A refusal by an insurance payer to reimburse for a submitted claim, in whole or in part
A claim denial occurs when an insurer refuses to pay all or part of a claim, and the denial reason code tells the provider what went wrong.
Question 2: What is 'timely filing' in the context of medical billing?
- The deadline set by insurers within which a claim must be submitted after the date of service to be eligible for payment (Correct answer)
- The requirement to send patient statements within 30 days of a visit
- The CMS rule requiring ABNs to be issued 24 hours before service
- The HIPAA mandate to respond to medical records requests within 30 days
Correct answer: The deadline set by insurers within which a claim must be submitted after the date of service to be eligible for payment
Timely filing limits are deadlines imposed by each payer requiring claims to be submitted within a defined period after the date of service, and missed deadlines result in non-payable denials.
Question 3: What does a denial reason code with the prefix 'CO' indicate?
- A contractual obligation adjustment where the provider has agreed to write off the amount as part of their payer contract (Correct answer)
- A patient responsibility amount the provider should collect
- A coding error that requires resubmission
- A coordination of benefits issue requiring additional information
Correct answer: A contractual obligation adjustment where the provider has agreed to write off the amount as part of their payer contract
The 'CO' prefix (Contractual Obligation) on a CARC code means the adjustment is due to a payer-provider contract, and the provider cannot bill the patient for that amount.
Question 4: What does a denial reason code with the prefix 'PR' indicate?
- Patient Responsibility — the amount the patient is expected to pay, such as a deductible, copay, or coinsurance (Correct answer)
- Provider Reduction — a penalty applied to the provider for a billing error
- Payer Resubmission — the claim must be re-sent with corrections
- Prior Request — prior authorization was not obtained
Correct answer: Patient Responsibility — the amount the patient is expected to pay, such as a deductible, copay, or coinsurance
The 'PR' prefix (Patient Responsibility) identifies the portion of a claim the patient is expected to pay, including deductibles, copays, and coinsurance amounts.
Question 5: What is the purpose of a 'remittance advice' (RA)?
- A document sent by the payer to the provider explaining how a claim was adjudicated, including payment amounts and adjustment codes (Correct answer)
- A letter sent to patients explaining their outstanding balance
- A form submitted to appeal a denied claim
- A report from CMS showing a provider's audit results
Correct answer: A document sent by the payer to the provider explaining how a claim was adjudicated, including payment amounts and adjustment codes
A remittance advice details how each claim line was processed, showing billed amounts, allowed amounts, payer payments, adjustments, and reason codes for any denials or reductions.
Question 6: What is a 'RAC audit' in the context of Medicare?
- A Recovery Audit Contractor review that identifies and recovers improper Medicare payments made to providers (Correct answer)
- A Random Account Compliance check of patient access workflows
- A Regional Authorization Committee review of prior auth requests
- A Registered Audit Certificate required for hospital accreditation
Correct answer: A Recovery Audit Contractor review that identifies and recovers improper Medicare payments made to providers
RAC (Recovery Audit Contractor) audits review Medicare claims to identify overpayments and underpayments, and providers must repay overpayments identified by RAC auditors.
PAR PAR Denial Management and Point of Service Collections 1
What is a 'claim denial' in healthcare revenue cycle?