PAR Insurance Verification & Authorization 3 — Questions and Answers
Question 1: Which federal law requires most employer-sponsored group health plans to offer COBRA continuation coverage after a qualifying event?
- HIPAA
- ERISA
- The Consolidated Omnibus Budget Reconciliation Act (Correct answer)
- The Affordable Care Act
Correct answer: The Consolidated Omnibus Budget Reconciliation Act
COBRA, enacted as part of the Consolidated Omnibus Budget Reconciliation Act, mandates continuation coverage for eligible employees and dependents after qualifying events such as job loss.
Question 2: During insurance verification, a PAR discovers the patient has both Medicare Part A and an active employer group health plan. Which is typically the primary payer for hospital services if the employer has 20 or more employees?
- Medicare Part A
- The employer group health plan (Correct answer)
- Medicaid
- The plan with the lower deductible
Correct answer: The employer group health plan
Under Medicare Secondary Payer rules, an active employer group health plan with 20+ employees is primary to Medicare for working-aged beneficiaries.
Question 3: A prior authorization is obtained on Monday for a Tuesday elective procedure. The patient's insurance lapses midnight Monday. What is the likely outcome when the claim is submitted?
- The authorization guarantees payment regardless of lapsed coverage
- The claim will be denied because coverage was not active on the date of service (Correct answer)
- The facility can bill the insurer for Monday's services only
- The authorization number can be reused once coverage is reinstated
Correct answer: The claim will be denied because coverage was not active on the date of service
A prior authorization is not a guarantee of payment; the patient must have active coverage on the date of service for the claim to be reimbursed.
Question 4: What information does a 'subscriber ID' (member ID) on an insurance card most directly allow the PAR to obtain?
- The patient's clinical history
- Eligibility and benefit details through the payer's portal or 270/271 transaction (Correct answer)
- The provider's contracted rate
- The patient's HIPAA authorization status
Correct answer: Eligibility and benefit details through the payer's portal or 270/271 transaction
The subscriber ID is the primary identifier used to query a payer's system via 270/271 electronic transactions or web portals to retrieve eligibility and benefit information.
Question 5: Under the No Surprises Act, which type of patient situation most directly triggers the Good Faith Estimate requirement for uninsured patients?
- Emergency room visits billed to Medicaid
- Scheduled non-emergency services requested by an uninsured or self-pay patient (Correct answer)
- Inpatient admissions for Medicare beneficiaries
- Urgent care visits for insured patients
Correct answer: Scheduled non-emergency services requested by an uninsured or self-pay patient
The No Surprises Act requires providers to give Good Faith Estimates to uninsured or self-pay patients scheduling non-emergency services.
Question 6: A payer's authorization department requests a 'peer-to-peer' review. Who typically participates in this review?
- The PAR and the payer's billing representative
- The ordering physician and the payer's medical director (Correct answer)
- The patient and the payer's case manager
- The facility's CFO and the payer's contract negotiator
Correct answer: The ordering physician and the payer's medical director
A peer-to-peer review is a clinical discussion between the ordering physician and the payer's medical director to appeal an authorization denial based on medical necessity.
Question 7: Which of the following best describes the difference between an 'authorization' and a 'referral' in managed care?
- Authorizations are issued by specialists; referrals are issued by payers
- A referral directs a patient to a specialist; an authorization is payer approval for a service or procedure (Correct answer)
- Referrals are required for inpatient stays; authorizations are for outpatient visits only
- They are interchangeable terms with no practical distinction
Correct answer: A referral directs a patient to a specialist; an authorization is payer approval for a service or procedure
A referral is a provider-to-provider direction for specialty care, while an authorization is the insurer's formal approval confirming it will cover a specific service.
PAR Insurance Verification & Authorization 3
Which federal law requires most employer-sponsored group health plans to offer COBRA continuation coverage after a qualifying event?