1
Q
- Q: What is charge capture?
A
A: The systematic process of recording every billable service rendered during a patient encounter before the claim is built.
2
Q
- Q: Why is charge capture considered the most financially critical pre-claim step?
A
A: A missed charge creates permanent revenue loss once the timely filing window closes — there is no recovery mechanism after the deadline passes.
3
Q
- Q: What is a superbill?
A
A: A pre-printed encounter form listing common diagnoses and procedures that the provider checks off to initiate the charge capture process.
4
Q
- Q: What is an encounter form?
A
A: Another term for a superbill — a document used at the point of care to capture the services rendered during a patient encounter.
5
Q
- Q: What is the Charge Description Master?
A
A: A master list of all billable services with associated codes and fees used for facility billing in hospital and institutional settings.
6
Q
- Q: What is EHR-integrated charge entry?
A
A: A charge capture method where services are recorded directly in the electronic health record at the point of care — reducing manual charge entry errors.
7
Q
- Q: What are the four steps in the charge flow process?
A
A: Encounter, documentation, charge entry, and claim submission.
8
Q
- Q: At which step in the charge flow does charge capture occur?
A
A: Between documentation and claim submission — at the charge entry step where coded services are entered into the billing system.
9
Q
- Q: What is a missed charge?
A
A: A billable service that was rendered and documented but never entered into the billing system — resulting in permanent revenue loss if discovered after the timely filing window closes.
10
Q
- Q: What is a duplicate charge?
A
A: The same service entered into the billing system more than once — creating overpayment risk and compliance exposure.
11
Q
- Q: What is charge reconciliation?
A
A: The process of comparing services documented in the medical record against charges entered in the billing system to identify missed or duplicate charges.
12
Q
- Q: How frequently should charge reconciliation be performed according to best practice?
A
A: Daily — to catch missed or duplicate charges before the timely filing window closes.
13
Q
- Q: What is the consequence of billing incorrect units on a charge?
A
A: Underpayment if units are too low or overpayment and audit risk if units are too high — both create financial and compliance problems.
14
Q
- Q: What is the CMS-1500?
A
A: The universal professional claim form used by physician offices and outpatient providers to bill for services rendered.
15
Q
- Q: What is the current version of the CMS-1500 form?
A
A: The CMS-1500 (02/12) — the version released in February 2012 and currently required for professional claim submission.
16
Q
- Q: What is the electronic equivalent of the CMS-1500?
A
A: The 837P — the HIPAA-standard electronic professional claim transaction.
17
Q
- Q: What is the UB-04?
A
A: The CMS-1450 — the institutional claim form used by hospitals and facilities for inpatient and outpatient facility billing.
18
Q
- Q: Which claim form does the CBCS exam primarily focus on?
A
A: The CMS-1500 — the professional claim form used in physician office and outpatient billing settings.
19
Q
- Q: What goes in Box 1 of the CMS-1500?
A
A: The type of insurance — Medicare, Medicaid, TRICARE, CHAMPVA, group health plan, FECA, or other.
20
Q
- Q: What goes in Box 2 of the CMS-1500?
A
A: The patient’s last name, first name, and middle initial — must match insurance records exactly.
21
Q
- Q: What goes in Box 11 of the CMS-1500?
A
A: The insured’s policy or group number — linking the claim to the correct insurance plan.
22
Q
- Q: What goes in Box 21 of the CMS-1500?
A
A: Up to 12 ICD-10-CM diagnosis codes — with the primary diagnosis in position A.
23
Q
- Q: Why must the primary diagnosis always be in position A of Box 21?
A
A: Position A drives medical necessity evaluation — if a secondary condition occupies position A the claim may be denied for medical necessity.
24
Q
- Q: What goes in Box 23 of the CMS-1500?
A
A: The prior authorization number — entered when the payer required authorization before the service was performed.
25
25. Q: What goes in Box 24A of the CMS-1500?
A: The date of service — the date the service was rendered, matching the medical record documentation.
26
26. Q: What goes in Box 24B of the CMS-1500?
A: The place of service code — the two-digit code indicating where the service was rendered.
27
27. Q: What goes in Box 24D of the CMS-1500?
A: The procedure code and up to four modifiers — the CPT or HCPCS code describing the service performed.
28
28. Q: What goes in Box 24E of the CMS-1500?
A: The diagnosis pointer — a letter from A through L linking each procedure code to the supporting diagnosis in Box 21.
29
29. Q: What is the diagnosis pointer in Box 24E?
A: A letter corresponding to the position of the supporting diagnosis in Box 21 — it links the procedure to the diagnosis that justifies its medical necessity.
30
30. Q: What happens when the diagnosis pointer in Box 24E links to the wrong diagnosis?
A: The payer cannot confirm medical necessity and will deny the claim — the procedure must be linked to the diagnosis that supports why it was performed.
31
31. Q: What goes in Box 24F of the CMS-1500?
A: The billed charge for each service line — the amount the provider is billing for that specific procedure.
32
32. Q: What goes in Box 24G of the CMS-1500?
A: The number of units for each service line — must match the quantity documented in the medical record.
33
33. Q: What goes in Box 24J of the CMS-1500?
A: The rendering provider's Type 1 NPI — the individual provider who performed the service.
34
34. Q: What goes in Box 33 of the CMS-1500?
A: The billing provider's name, address, and Type 2 NPI — the organization submitting the claim.
35
35. Q: What is a Type 1 NPI?
A: A National Provider Identifier assigned to an individual provider — appears in Box 24J of the CMS-1500.
36
36. Q: What is a Type 2 NPI?
A: A National Provider Identifier assigned to an organization or group practice — appears in Box 33 of the CMS-1500.
37
37. Q: Can both Type 1 and Type 2 NPIs appear on the same claim?
A: Yes — the rendering provider's Type 1 NPI in Box 24J and the billing organization's Type 2 NPI in Box 33.
38
38. Q: What is the 837P transaction?
A: The HIPAA-standard electronic professional claim — the electronic equivalent of the CMS-1500 paper form.
39
39. Q: What is the 837I transaction?
A: The HIPAA-standard electronic institutional claim — the electronic equivalent of the UB-04 used by hospitals.
40
40. Q: What is a clearinghouse?
A: An intermediary that receives claims from providers, scrubs them for errors, translates them into payer-specific formats, and routes them to the correct payer.
41
41. Q: What is claim scrubbing?
A: The automated process of checking claims for missing fields, invalid codes, format errors, and logic issues before submission to the payer.
42
42. Q: What happens to a claim that fails clearinghouse scrubbing?
A: It is returned to the provider as a rejection — it never reaches the payer's adjudication system.
43
43. Q: What is direct claim submission?
A: Sending a claim directly to the payer without using a clearinghouse — bypassing the scrubbing and translation functions.
44
44. Q: What are the advantages of submitting claims through a clearinghouse?
A: Error detection before submission, translation to payer-specific formats, routing to the correct payer, and real-time submission confirmation.
45
45. Q: When is paper claim submission permitted?
A: For providers meeting small-volume thresholds — HIPAA requires electronic submission for most covered entities.
46
46. Q: What are the seven most tested EDI transaction sets?
A: 837P, 837I, 835, 270, 271, 276, 277, and 278.
47
47. Q: What is the 835 EDI transaction?
A: The electronic remittance advice — the payer sends this to the provider after claim adjudication explaining payment and adjustments.
48
48. Q: What is the 270 EDI transaction?
A: The eligibility inquiry — sent from the provider to the payer to verify a patient's insurance coverage and benefits.
49
49. Q: What is the 271 EDI transaction?
A: The eligibility response — the payer's reply to the 270 inquiry confirming or denying the patient's coverage details.
50
50. Q: What is the 276 EDI transaction?
A: The claim status inquiry — sent from the provider to the payer to ask about the status of a previously submitted claim.
51
51. Q: What is the 277 EDI transaction?
A: The claim status response — the payer's reply to the 276 inquiry providing the current status of the claim.
52
52. Q: What is the 278 EDI transaction?
A: The authorization request and response — used to submit referral and prior authorization requests electronically.
53
53. Q: What is the correct order of a complete billing cycle using EDI transactions?
A: 270 eligibility check, 271 eligibility response, 837P claim submission, 276 status inquiry if needed, 277 status response, and 835 remittance receipt.
54
54. Q: What is the order of financial responsibility in a multi-payer scenario?
A: Primary payer pays first, secondary payer applies benefits to the remainder, and the patient owes the remaining balance.
55
55. Q: What is the maximum amount the patient can owe under COB?
A: No more than what the primary payer allows — the patient is protected from being billed beyond the allowed amount regardless of secondary payer calculations.
56
56. Q: What is a crossover claim?
A: A claim that automatically transfers from Medicare to Medicaid after Medicare adjudicates — used for dual-eligible patients who have both programs.
57
57. Q: What does the patient typically owe on a crossover claim?
A: Little to nothing — Medicaid covers the Medicare cost-sharing that would otherwise be the patient's responsibility.
58
58. Q: What is the Assignment of Benefits in the billing context?
A: The patient's written authorization directing the payer to send payment directly to the provider — critical for provider cash flow.
59
59. Q: What happens when a provider does not have a signed Assignment of Benefits?
A: The payer sends payment to the patient — the provider must then collect from the patient, creating collection risk.
60
60. Q: When should a copayment be collected from the patient?
A: At the time of service — before or at the visit, not after insurance adjudicates.
61
61. Q: When should deductible and coinsurance amounts be collected from the patient?
A: After insurance adjudicates and the EOB or remittance advice is received — confirming the exact patient responsibility.
62
62. Q: What is a Remittance Advice?
A: The document the payer sends to the provider explaining how each claim was processed and paid — also called the ERA when received electronically.
63
63. Q: What is an Electronic Remittance Advice?
A: The 835 electronic transaction — the digital version of the remittance advice sent from payer to provider after adjudication.
64
64. Q: What is an Explanation of Benefits?
A: The document the payer sends to the patient explaining how their claim was processed — contains the same adjudication data as the remittance advice.
65
65. Q: What is the difference between the RA and the EOB?
A: Both contain the same adjudication information — the RA goes to the provider and the EOB goes to the patient.
66
66. Q: What key fields appear on a remittance advice?
A: Claim number, date of service, billed amount, allowed amount, paid amount, adjustment amount, reason code, and patient responsibility.
67
67. Q: What is the billed amount on a remittance advice?
A: The amount the provider charged for the service — may exceed the payer's allowed amount.
68
68. Q: What is the allowed amount on a remittance advice?
A: The payer's contracted rate for the service — the maximum the provider can collect from the payer and patient combined.
69
69. Q: What is the paid amount on a remittance advice?
A: The amount the payer actually sent to the provider — after applying deductibles, coinsurance, and other adjustments.
70
70. Q: What is an adjustment amount on a remittance advice?
A: The difference between the billed amount and the allowed amount — explained by a Claim Adjustment Reason Code.
71
71. Q: What are Claim Adjustment Reason Codes?
A: Standardized codes maintained by X12 used by payers on the remittance advice to explain why a claim was paid differently than billed.
72
72. Q: What are the three CARC prefix categories?
A: CO for Contractual Obligation, PR for Patient Responsibility, and OA for Other Adjustment.
73
73. Q: What does a CO prefix on a CARC indicate?
A: The adjustment is a contractual obligation — neither the provider nor the patient can be billed for this amount.
74
74. Q: What does a PR prefix on a CARC indicate?
A: The adjustment represents patient responsibility — the patient owes this amount.
75
75. Q: What does an OA prefix on a CARC indicate?
A: An other adjustment — a situation that does not fit the CO or PR categories.
76
76. Q: What are Remittance Advice Remark Codes?
A: Supplemental codes also called RARCs that provide additional explanation beyond what the CARC alone conveys.
77
77. Q: What are the three outcomes from every remittance advice line item?
A: Payment to post, denial to work, or contractual adjustment to write off.
78
78. Q: What does CARC CO-45 mean?
A: The charge exceeds the payer's fee schedule — a contractual write-off that cannot be billed to the patient.
79
79. Q: What does CARC CO-11 mean?
A: The diagnosis is inconsistent with the procedure — requires coding correction and resubmission or appeal with documentation.
80
80. Q: What does CARC CO-4 mean?
A: The service code is inconsistent with the modifier — requires correction of the modifier or procedure code before resubmission.
81
81. Q: What does CARC CO-16 mean?
A: The claim lacks information needed for adjudication — identify the missing information, add it, and resubmit.
82
82. Q: What does CARC CO-22 mean?
A: The patient is covered by another payer — review COB information and resubmit to the correct primary payer first.
83
83. Q: What does CARC CO-29 mean?
A: The timely filing deadline has been exceeded — submit proof of timely filing or the claim cannot be recovered.
84
84. Q: What does CARC CO-97 mean?
A: The service has already been adjudicated — investigate for a duplicate submission and appeal if the claim is not actually a duplicate.
85
85. Q: What does CARC CO-109 mean?
A: The claim is not covered by this payer — verify coverage and bill the correct payer or bill the patient if appropriate.
86
86. Q: What does CARC PR-1 mean?
A: The adjustment represents the patient's deductible amount — bill the patient for this portion.
87
87. Q: What does CARC PR-2 mean?
A: The adjustment represents the patient's coinsurance amount — bill the patient for this portion.
88
88. Q: What does CARC PR-3 mean?
A: The adjustment represents the patient's copayment amount — should have been collected at time of service.
89
89. Q: What does CARC OA-23 mean?
A: Payment was adjusted due to primary payer adjudication — typically seen on secondary claims where the secondary payer is applying COB rules.
90
90. Q: What is the resolution action for CARC CO-45?
A: Write off the contractual adjustment — do not bill the patient and do not appeal this adjustment.
91
91. Q: What is the resolution action for CARC CO-29?
A: Submit proof of timely filing such as clearinghouse submission reports — appeal if within the filing limit.
92
92. Q: What is denial tracking and root cause analysis?
A: The process of identifying patterns in denial codes to detect systemic billing or coding problems — repeated CARCs signal upstream process failures.
93
93. Q: What does a pattern of CO-11 denials across multiple claims indicate?
A: A systemic coding problem — the diagnosis codes being assigned are not supporting the procedures billed across multiple encounters.
94
94. Q: What is payment posting?
A: The process of entering insurance and patient payments into the billing system and applying them to the correct patient accounts and service lines.
95
95. Q: What is a contractual adjustment in payment posting?
A: The difference between the billed amount and the payer's allowed amount — written off per the participation agreement and never billable to the patient.
96
96. Q: What is a write-off in payment posting?
A: The elimination of a patient balance that cannot or will not be collected — requires management authorization and must follow organizational policy.
97
97. Q: Can a write-off be selectively applied to some patients and not others?
A: No — selective write-offs create compliance and discrimination risk; write-off policies must be applied consistently.
98
98. Q: What is a charge-off?
A: The accounting process of moving an uncollectable patient balance to bad debt — the balance may still be pursued through collections.
99
99. Q: What is the difference between a write-off and a charge-off?
A: A write-off eliminates the balance from the account; a charge-off moves it to bad debt where it may still be pursued through a collection agency.
100
100. Q: What is a take-back?
A: A payer recoupment of a previously paid claim by deducting the amount from a future payment — appears as a negative payment on the remittance advice.
101
101. Q: How does a take-back appear on a remittance advice?
A: As a negative payment — reducing the total payment amount for that remittance period.
102
102. Q: What is a withhold in managed care billing?
A: A portion of payment held back by a managed care payer pending provider performance metrics — released at the end of the contract period if metrics are met.
103
103. Q: What is the difference between a take-back and a withhold?
A: A take-back recoups a previously paid claim; a withhold holds back a portion of current payment pending future performance evaluation.
104
104. Q: What is balancing the day's posting?
A: Verifying that the total payments entered into the billing system match the total deposit amount — any discrepancy must be resolved before closing the batch.
105
105. Q: What is the consequence of an unbalanced posting batch?
A: Accounting errors that compound over time — creating inaccurate accounts receivable balances and audit risk.
106
106. Q: What is a claim rejection?
A: A claim returned before entering the payer's adjudication system — typically due to a format or data error caught at the clearinghouse or payer front-end.
107
107. Q: What is a claim denial?
A: A claim that entered the payer's adjudication system, was processed, and payment was refused for a covered or policy reason.
108
108. Q: Was a rejected claim ever processed by the payer?
A: No — a rejection means the claim never entered the payer's adjudication system and was never reviewed.
109
109. Q: Was a denied claim ever processed by the payer?
A: Yes — a denial means the claim was adjudicated and the payer made a decision to refuse payment.
110
110. Q: How is a rejected claim resolved?
A: Correct the error and resubmit as a new original claim using frequency code 1 — do not use a corrected claim code.
111
111. Q: How is a denied claim resolved?
A: Review the CARC on the remittance advice, determine if the denial is correctable or appealable, and take the appropriate action.
112
112. Q: What are the most common reasons for claim rejection?
A: Missing required fields, invalid NPI, incorrect date format, wrong payer ID, eligibility issues, and duplicate claim detection at the front end.
113
113. Q: What are the most common reasons for claim denial?
A: Medical necessity not supported, duplicate submission, timely filing exceeded, service not covered, and authorization missing or expired.
114
114. Q: What is the timely filing trap for rejected claims?
A: The timely filing clock runs from the date of service — a rejected claim that is not corrected and resubmitted quickly becomes a timely filing violation.
115
115. Q: What is the claim frequency code?
A: A code indicating the type of claim submission — 1 for original, 7 for replacement, and 8 for void or cancel.
116
116. Q: When is frequency code 1 used?
A: For the first submission of a new claim — an original claim that has never been submitted before.
117
117. Q: When is frequency code 7 used?
A: To replace and correct a previously submitted claim that was processed — it replaces the entire original claim, not just the corrected field.
118
118. Q: When is frequency code 8 used?
A: To void and completely withdraw a previously submitted claim from the payer's system.
119
119. Q: What does frequency code 7 replace?
A: The entire previously submitted claim — all fields must be complete and correct because the replacement supersedes the original in its entirety.
120
120. Q: What is the difference between resubmission and an appeal?
A: Resubmission corrects an error in the original claim; an appeal challenges the payer's decision on a correctly submitted claim.
121
121. Q: What is Medicare's timely filing limit?
A: 12 months from the date of service — the most generous standard limit among major payer types.
122
122. Q: What is the typical Medicaid timely filing limit?
A: Varies by state — can be as short as 90 days, making it one of the most restrictive timely filing windows.
123
123. Q: What is the typical commercial payer timely filing limit?
A: 90 to 180 days from the date of service — the specific limit is defined in each payer contract.
124
124. Q: When does the timely filing clock start?
A: From the date of service — not from the date of denial, rejection, or discovery of the error.
125
125. Q: Does a denial restart the timely filing clock?
A: No — the timely filing clock runs from the original date of service regardless of subsequent denials or rejections.
126
126. Q: What documents serve as proof of timely filing?
A: Clearinghouse submission reports and electronic acknowledgment reports — confirming the date and time the claim was submitted.
127
127. Q: What happens when the timely filing deadline is missed?
A: The claim cannot be recovered — permanent revenue loss with no appeal or correction available.
128
128. Q: What is the Medicare five-level appeals process in order?
A: Level 1 MAC Redetermination, Level 2 QIC Reconsideration, Level 3 ALJ Hearing, Level 4 Medicare Appeals Council, Level 5 Federal District Court.
129
129. Q: What is a MAC Redetermination?
A: Level 1 of the Medicare appeals process — a review of the denied claim conducted by the Medicare Administrative Contractor that processed the original claim.
130
130. Q: What is a QIC Reconsideration?
A: Level 2 of the Medicare appeals process — a review by a Qualified Independent Contractor separate from the MAC that issued the denial.
131
131. Q: What is an ALJ Hearing?
A: Level 3 of the Medicare appeals process — a formal hearing before an Administrative Law Judge who reviews the case independently.
132
132. Q: What is the Medicare Appeals Council?
A: Level 4 of the Medicare appeals process — a review board within the Departmental Appeals Board of HHS.
133
133. Q: What is the filing deadline for a Medicare Level 1 Redetermination?
A: 120 days from the date of the denial notice.
134
134. Q: What is the filing deadline for a Medicare Level 2 QIC Reconsideration?
A: 180 days from the date of the Level 1 decision.
135
135. Q: What happens if a Medicare appeal deadline is missed?
A: The right to appeal at that level is forfeited — and potentially the entire appeal if the deadline cannot be excused.
136
136. Q: What is the commercial payer appeals process?
A: An internal appeal to the payer first — if denied, an external review by an independent organization is available under ACA requirements.
137
137. Q: What must every appeal include?
A: The original claim, the denial notice with CARC, clinical documentation, coding rationale, applicable LCD or NCD, and a cover letter stating the basis for the appeal.
138
138. Q: What is the difference between a reconsideration and a formal appeal?
A: A reconsideration is an informal request for a second review; a formal appeal follows a structured multi-level process with specific deadlines and documentation requirements.
139
139. Q: When should a provider write off a denied claim rather than appeal?
A: When the denial is valid, when the appeal cost exceeds the claim value, or when the appeal deadline has expired.
140
140. Q: What is an appeal tracking log?
A: A document recording claim number, denial reason, appeal date, deadline, and status — used to ensure no appeal deadline is missed.
141
141. Q: What is an aging report?
A: A snapshot of all outstanding accounts receivable organized by how many days have passed since the claim was submitted or the service was rendered.
142
142. Q: What are the five aging buckets on a standard aging report?
A: 0 to 30 days, 31 to 60 days, 61 to 90 days, 91 to 120 days, and 120-plus days.
143
143. Q: What does the 0 to 30 day aging bucket represent?
A: Recently submitted claims — allow normal processing time before follow-up action is required.
144
144. Q: What does the 31 to 60 day aging bucket represent?
A: Claims that have been submitted but not yet resolved — follow up if no response from the payer.
145
145. Q: What does the 61 to 90 day aging bucket represent?
A: A yellow alert — claims approaching timely filing limits for many payers and requiring immediate attention.
146
146. Q: What does the 91 to 120 day aging bucket represent?
A: A red alert — the timely filing deadline has likely passed for many payers and the revenue is at serious risk.
147
147. Q: What does the 120-plus day aging bucket represent?
A: A post-mortem review — assess accounts for write-off, bad debt referral, or last-resort appeal options.
148
148. Q: What is the correct prioritization strategy for working an aging report?
A: High-dollar accounts in the 61 to 90 day bucket first, followed by any account approaching its specific payer timely filing deadline, then high-dollar accounts in other buckets.
149
149. Q: What is days in accounts receivable?
A: A metric measuring the average number of days it takes to collect payment after a service is rendered.
150
150. Q: What is the industry benchmark for days in A/R for a healthy physician practice?
A: Under 35 to 40 days — higher numbers indicate systemic billing problems requiring investigation.
151
151. Q: What does a days in A/R benchmark above 50 indicate?
A: Systemic billing problems — such as high denial rates, slow follow-up, coding errors, or staffing gaps in the billing department.
152
152. Q: How is an aging report used to flag timely filing risk?
A: By identifying accounts approaching their payer-specific timely filing deadline — any account in the 61 to 90 day bucket with a 90-day limit must be worked immediately.
153
153. Q: What is the NCCI?
A: The National Correct Coding Initiative — CMS-developed edits preventing improper payment of procedure codes that should not be billed together.
154
154. Q: What are NCCI procedure-to-procedure edits?
A: Edits flagging code pairs where one code is a component of the other — the comprehensive code is paid and the component code is bundled.
155
155. Q: What are Medically Unlikely Edits?
A: NCCI edits establishing the maximum units of a given code that can be billed for a single patient on a single day based on clinical logic.
156
156. Q: What is the difference between PTP edits and MUEs?
A: PTP edits prevent billing two codes that should be bundled; MUEs prevent billing excessive units of a single code on the same day.
157
157. Q: How can an NCCI PTP bundle be overridden when services are genuinely distinct?
A: By appending modifier 59 or an appropriate X modifier — supported by documentation confirming the services are truly separate.
158
158. Q: What is the consequence of using modifier 59 without clinical justification?
A: Fraudulent unbundling — using a modifier to bypass a valid edit without genuine clinical justification is a compliance violation.
159
159. Q: What is a Local Coverage Determination in the payer edit context?
A: A Medicare Administrative Contractor policy establishing covered diagnoses for specific services — claims with non-covered diagnoses are automatically denied.
160
160. Q: What is a National Coverage Determination in the payer edit context?
A: A CMS-wide coverage policy applying nationally — supersedes an LCD when both exist for the same service.
161
161. Q: What is the Medicare Physician Fee Schedule?
A: The payment schedule using the Resource-Based Relative Value Scale to calculate Medicare allowed amounts for physician services.
162
162. Q: What is the Resource-Based Relative Value Scale?
A: The system Medicare uses to calculate payments — based on work, practice expense, and malpractice RVUs multiplied by a conversion factor.
163
163. Q: What is the Medicare conversion factor?
A: A dollar amount set annually by CMS multiplied by the total RVUs to calculate the Medicare allowed payment for a service.
164
164. Q: What is the difference between facility and non-facility RVUs?
A: Non-facility RVUs are higher because the physician's practice absorbs overhead; facility RVUs are lower because the facility covers overhead separately.
165
165. Q: What is a patient statement?
A: A billing document sent to the patient after insurance adjudicates — showing the service date, description, insurance payment, and patient balance owed.
166
166. Q: When should a patient statement be generated?
A: After insurance has adjudicated and the exact patient responsibility has been determined from the remittance advice.
167
167. Q: What information must appear on a patient statement?
A: Service date, description of service, amount billed, insurance payment applied, and the remaining patient balance.
168
168. Q: What is dunning in patient collections?
A: Progressive collection language added to patient statements as the balance ages — escalating in urgency without crossing into harassment.
169
169. Q: What tone should the first patient statement carry?
A: Informational — a courteous notice that a balance is due with instructions for payment.
170
170. Q: What tone should subsequent patient statements carry?
A: Progressively more urgent — escalating from reminder to firm notice to final warning, without using abusive or harassing language.
171
171. Q: What is TILA?
A: The Truth in Lending Act — requires disclosure of financing terms including the annual percentage rate when a payment plan extends beyond four installments.
172
172. Q: When does TILA apply in medical billing?
A: When a provider offers a patient a payment plan extending beyond four installments — full financing terms including the APR must be disclosed.
173
173. Q: What is FACT?
A: The Fair and Accurate Credit Transactions Act — protects patients against identity theft and governs how patient financial information is stored and disposed of.
174
174. Q: What does FACT require of billing offices regarding patient financial data?
A: Proper storage, handling, and secure disposal of patient financial information to prevent identity theft.
175
175. Q: What is ECOA?
A: The Equal Credit Opportunity Act — prohibits discrimination in credit decisions based on race, gender, age, religion, or other protected characteristics.
176
176. Q: What does ECOA prohibit in patient billing?
A: Discriminating against patients in payment plan decisions or credit terms based on any protected characteristic.
177
177. Q: What is FDCPA?
A: The Fair Debt Collection Practices Act — governs third-party debt collectors only, prohibiting harassment, false statements, and unfair collection practices.
178
178. Q: Does the FDCPA apply to internal billing staff?
A: No — the FDCPA applies exclusively to third-party debt collectors, not to providers collecting their own accounts internally.
179
179. Q: What must a third-party collector do when a patient requests in writing that contact cease?
A: Stop all contact except to notify the patient of specific legal actions being taken — such as filing a lawsuit.
180
180. Q: How long does a patient have to dispute a debt under the FDCPA after the collector's first contact?
A: 30 days — the patient must dispute in writing within 30 days to trigger the debt verification requirement.
181
181. Q: What must a collector provide when a patient disputes a debt in writing within 30 days?
A: Written verification of the debt — collection activity must cease until verification is provided.
182
182. Q: What is an automatic stay in bankruptcy?
A: A legal order issued upon bankruptcy filing that immediately stops all collection activity — continuing to collect after notification is a federal law violation.
183
183. Q: What should a billing office do immediately upon being notified of a patient bankruptcy filing?
A: Stop all collection activity immediately and file a proof of claim in the bankruptcy proceeding to attempt recovery.
184
184. Q: What is a proof of claim in the bankruptcy context?
A: A formal document filed by the provider in the bankruptcy proceeding asserting the outstanding balance as a creditor claim.
185
185. Q: What happens if a provider continues collection activity after being notified of a patient bankruptcy?
A: The provider is in violation of the automatic stay — a federal law violation that can result in sanctions.
186
186. Q: What is an estate claim in patient collections?
A: When a patient dies, outstanding balances become claims against the estate — the provider must file within the state-required timeframe.
187
187. Q: What happens if a provider misses the state filing deadline for an estate claim?
A: The claim is typically eliminated — the provider loses the right to collect the balance from the estate.
188
188. Q: What is the patient collections timeline in standard revenue cycle practice?
A: Statement after EOB receipt, second statement at 30 days, third statement at 60 days, final notice at 90 days, external collection referral after 90 days of no response.
189
189. Q: When should an account be referred to a third-party collection agency?
A: After internal collection efforts are exhausted — typically after 90 or more days of no patient response to statements and calls.
190
190. Q: What is the NCCI edit system's relationship to CPT coding?
A: NCCI edits are built on CPT code relationships — they prevent billing component codes alongside comprehensive codes that already include the component service.
191
191. Q: What is a payer-specific guideline?
A: A coverage or billing rule established by an individual payer beyond NCCI and MPFS — varies by payer and must be verified separately for each plan.
192
192. Q: Why does the CBCS exam not test specific payer guidelines?
A: Because payer-specific rules change frequently and vary by contract — the exam tests universal billing principles that apply across payers.
193
193. Q: What is the global surgical package in the billing context?
A: The concept bundling pre-operative, intraoperative, and post-operative care into the procedure code — routine follow-up within the global period cannot be billed separately.
194
194. Q: What is a global period?
A: The period following a surgical procedure during which routine pre- and post-operative services are included in the procedure code payment — 0, 10, or 90 days depending on the procedure.
195
195. Q: What services can be billed separately during the global period?
A: New and unrelated problems, complications requiring additional treatment, and services clearly unrelated to the original procedure.
196
196. Q: What is a remittance advice remark code?
A: A supplemental code on the RA providing additional explanation beyond the CARC — used when the reason code alone does not fully explain the adjustment.
197
197. Q: What is a claim adjustment group code?
A: The prefix category of the CARC — CO, PR, or OA — indicating who is financially responsible for the adjusted amount.
198
198. Q: What is accounts receivable?
A: The total outstanding balances owed to a practice by payers and patients — tracked and managed through the billing department.
199
199. Q: What is a clean claim in the billing context?
A: A claim submitted with all required information, no errors, and no missing data that a payer can adjudicate immediately without requesting additional information.
200
200. Q: What is a dirty claim?
A: A claim containing errors, missing information, or invalid data that requires correction before it can be processed — results in rejection or denial.
201
201. Q: What is a corrected claim?
A: A claim resubmitted using frequency code 7 to replace a previously processed claim with corrected information.
202
202. Q: What is a voided claim?
A: A claim submitted using frequency code 8 to completely withdraw and cancel a previously submitted claim from the payer's system.
203
203. Q: What is the difference between a corrected claim and a voided claim?
A: A corrected claim replaces the original with corrected data; a voided claim withdraws the original completely with no replacement.
204
204. Q: What is a coordination of benefits denial?
A: A denial indicating the payer believes another insurance is primary — requires COB review and resubmission to the correct primary payer first.
205
205. Q: What is the consequence of submitting to the wrong primary payer?
A: The claim is denied with CARC CO-22 — the provider must identify the correct primary payer and resubmit in the correct filing order.
206
206. Q: What is a timely filing appeal?
A: An appeal submitted with proof that the claim was submitted on time — clearinghouse reports serve as evidence of timely filing.
207
207. Q: What is the purpose of an appeal cover letter?
A: To clearly state the basis for the appeal, identify the specific denial reason being challenged, and outline the supporting documentation included.
208
208. Q: What is a medical necessity appeal?
A: An appeal challenging a denial for medical necessity — includes clinical documentation, applicable LCD or NCD, and coding rationale demonstrating why the service was justified.
209
209. Q: What is a duplicate claim denial?
A: A denial indicating the payer believes the claim was already submitted and processed — investigate whether it is truly a duplicate or a new distinct claim.
210
210. Q: How should a duplicate claim denial be resolved if the claim is not actually a duplicate?
A: Appeal with documentation demonstrating the two claims represent distinct services — include dates, procedures, and supporting records.
211
211. Q: What is a coordination period in the billing context?
A: The period during which a specific payer is responsible as primary — after the coordination period ends, another payer may become primary.
212
212. Q: What is a secondary claim?
A: A claim submitted to the secondary payer after the primary payer has adjudicated — includes the primary payer's EOB or RA showing what was paid.
213
213. Q: What information must be included when submitting a secondary claim?
A: The primary payer's EOB or RA showing the allowed amount, paid amount, and patient responsibility — so the secondary can calculate its benefit correctly.
214
214. Q: What is a tertiary claim?
A: A claim submitted to a third insurance payer after both primary and secondary payers have adjudicated — relatively uncommon but follows the same process.
215
215. Q: What is a self-pay balance?
A: An amount owed entirely by the patient — either because they have no insurance or because insurance has fully adjudicated and a balance remains.
216
216. Q: What is a bad debt write-off?
A: Moving an uncollectable balance to bad debt after all reasonable collection efforts have been exhausted — treated as a business loss for accounting purposes.
217
217. Q: What is the difference between bad debt and charity care?
A: Bad debt is an amount that was expected to be collected but could not be; charity care is an amount that was never expected to be collected based on patient financial need.
218
218. Q: What is a collection agency agreement?
A: A contract between a provider and a third-party collection agency establishing the terms of account referral and the agency's fee structure.
219
219. Q: What percentage does a collection agency typically retain from collected amounts?
A: Varies by contract — typically 25 to 50 percent of amounts collected, depending on account age and difficulty.
220
220. Q: What is a demand letter in the patient collections context?
A: A final written notice sent to a patient before account referral to collections — stating the balance owed and the consequence of non-payment.
221
221. Q: What is a small balance write-off?
A: An organizational policy allowing balances below a defined threshold to be written off without further collection effort — must be applied consistently.
222
222. Q: What is a credit balance?
A: A negative balance on a patient account resulting from an overpayment — must be refunded to the appropriate payer or patient promptly.
223
223. Q: What must a provider do when a payer overpayment is identified?
A: Return the overpayment within 60 days under the Medicare 60-day repayment rule — or face False Claims Act liability.
224
224. Q: What is a refund request?
A: A formal payer demand for return of an overpayment identified during post-payment review — the provider must respond within the stated timeframe.
225
225. Q: What is an internal payment audit?
A: A proactive review of posted payments comparing RA amounts to system entries — identifying posting errors, missed take-backs, and unposted payments.
226
226. Q: What is unapplied cash?
A: A payment received and posted to the billing system but not yet applied to a specific patient account or service line — must be resolved promptly.
227
227. Q: What is a patient financial counselor?
A: A billing staff member responsible for discussing financial responsibility with patients — explaining insurance benefits, collecting copays, and setting up payment plans.
228
228. Q: What is a payment plan?
A: An arrangement allowing a patient to pay their balance in installments over time — subject to TILA disclosure requirements when extending beyond four installments with interest.
229
229. Q: What is a financial hardship application?
A: A formal process through which patients with demonstrated financial need apply for charity care or a reduced payment arrangement.
230
230. Q: What is presumptive eligibility?
A: A process allowing providers to screen patients for Medicaid eligibility before or at the time of service — reducing uncompensated care.
231
231. Q: What is a charity care policy?
A: An organizational policy defining how free or discounted care is provided to patients who cannot afford payment — must be applied consistently and documented.
232
232. Q: What is the Surprise Billing Protection in the No Surprises Act context?
A: Federal protection preventing patients from receiving unexpected out-of-network bills for emergency services or non-emergency services at in-network facilities.
233
233. Q: What is a good faith estimate in the billing context?
A: A written estimate providers must give uninsured or self-pay patients before scheduled services — required under the No Surprises Act.
234
234. Q: What is the Advanced Explanation of Benefits?
A: A document payers must provide to patients before scheduled services under the No Surprises Act — showing expected costs and coverage.
235
235. Q: What is a claim status inquiry used for in daily billing workflow?
A: To check the processing status of a submitted claim — sent as EDI 276 with the payer responding via EDI 277.
236
236. Q: What triggers a claim status inquiry?
A: A claim that has not been resolved within the expected processing timeframe — typically 30 days for electronic claims and longer for paper claims.
237
237. Q: What is an unprocessed claim?
A: A claim submitted to the payer but not yet adjudicated — may require follow-up to confirm receipt and processing.
238
238. Q: What is a pended claim?
A: A claim held by the payer pending additional information — the payer is requesting records or clarification before finalizing adjudication.
239
239. Q: What should a billing specialist do when a claim is pended by the payer?
A: Respond to the payer's request for additional information promptly — provide the requested documentation within the stated timeframe.
240
240. Q: What is a claim attachment?
A: Clinical documentation submitted with or in support of a claim — such as operative reports, lab results, or medical records requested by the payer.
241
241. Q: What is electronic claim attachment?
A: The electronic submission of supporting clinical documentation alongside or in response to a payer request — increasingly replacing paper documentation.
242
242. Q: What is a remittance posting error?
A: An incorrect entry of payment data into the billing system — such as posting to the wrong account, wrong service line, or wrong amount.
243
243. Q: What is the consequence of a remittance posting error?
A: Inaccurate accounts receivable balances — patients may be billed incorrectly and payer balances may appear incorrect creating follow-up workflow errors.
244
244. Q: What is a denial rate?
A: The percentage of claims denied out of total claims submitted — a key performance metric for the billing department.
245
245. Q: What is an acceptable denial rate benchmark for a well-performing billing department?
A: Generally under 5 percent — higher rates indicate systemic problems in coding, registration, or claim submission processes.
246
246. Q: What is a first-pass resolution rate?
A: The percentage of claims paid on the first submission without requiring correction or appeal — a higher rate indicates a more efficient billing process.
247
247. Q: What is a net collection rate?
A: The percentage of collectible revenue actually collected — calculated by dividing payments received by the total amount that should have been collected after contractual adjustments.
248
248. Q: What is a gross collection rate?
A: The percentage of billed charges actually collected — a less meaningful metric than net collection rate because it includes non-collectible contractual adjustments.
249
249. Q: What is revenue cycle reporting used for in the billing context?
A: To analyze financial and operational metrics — including denial rates, days in A/R, collection rates, and claim submission volumes — to identify and correct systemic problems.
250
250. Q: What is the single most important principle in Domain 4 billing?
A: Every step from charge capture through patient collections must be performed accurately and timely — because errors at any point create downstream revenue loss, compliance risk, or permanent write-offs that cannot be recovered.
NHA CBCS EXAM
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