PAR Revenue Cycle Fundamentals 3 — Questions and Answers
Question 1: What is a 'write-off' in the context of healthcare revenue cycle?
- An amount added to the patient's balance
- An amount the provider agrees to forgo as uncollectable or contractually disallowed (Correct answer)
- A bonus payment from the payer
- A transfer of balance to a secondary insurer
Correct answer: An amount the provider agrees to forgo as uncollectable or contractually disallowed
A write-off is an amount removed from accounts receivable because it is contractually disallowed or deemed uncollectable.
Question 2: Which of the following is the PRIMARY responsibility of the Patient Access department at the start of the revenue cycle?
- Posting payments to patient accounts
- Collecting and verifying patient demographic and insurance information (Correct answer)
- Coding diagnoses and procedures
- Submitting claims to insurance payers
Correct answer: Collecting and verifying patient demographic and insurance information
Patient Access is responsible for accurately collecting demographics and insurance data at registration, which drives the entire revenue cycle.
Question 3: An Explanation of Benefits (EOB) is sent by the payer to whom?
- Only the provider
- Only the patient
- Both the provider and the patient (Correct answer)
- The state insurance commissioner
Correct answer: Both the provider and the patient
Payers send an EOB to the patient and a remittance advice (RA) to the provider, both explaining claim adjudication details.
Question 4: What does 'accounts receivable (A/R) days' measure?
- The number of claims denied per day
- The average number of days it takes to collect payment after a service is rendered (Correct answer)
- The total dollar amount owed by all patients
- The number of days before a claim must be filed
Correct answer: The average number of days it takes to collect payment after a service is rendered
A/R days is a key performance metric indicating the average time it takes to collect outstanding balances after services are provided.
Question 5: Under the 'birthday rule,' when a child is covered by both parents' insurance plans, which plan is primary?
- The plan with the lower deductible
- The plan of the parent whose birthday falls earliest in the calendar year (Correct answer)
- The plan with the higher premium
- The father's plan always
Correct answer: The plan of the parent whose birthday falls earliest in the calendar year
The birthday rule states that the plan of the parent with the earliest birthday in the calendar year (month and day, not year) is primary.
Question 6: Which HIPAA-standard transaction is used to check a patient's insurance eligibility electronically?
- 837P
- 835
- 270/271 (Correct answer)
- 834
Correct answer: 270/271
The 270 transaction is an eligibility inquiry and the 271 is the payer's response confirming or denying coverage.
Question 7: What is the function of a charge master (charge description master or CDM)?
- To list all patients registered in a facility
- To store a comprehensive list of services, procedures, and their associated charges (Correct answer)
- To track all denied claims
- To schedule appointments for high-volume departments
Correct answer: To store a comprehensive list of services, procedures, and their associated charges
The charge master is a comprehensive database of all billable services a facility provides, including their codes and standard charges.
PAR Revenue Cycle Fundamentals 3
What is a 'write-off' in the context of healthcare revenue cycle?