Week 5 - Medicare Knowledge Test

Question 1

What is revised by Medicare each year as a list of predetermined service rates?

CPT codes
HCPCS
Eligibility
Medicare
Physician Fee Schedule

Answer 1

✅ Medicare Physician Fee Schedule
Medicare revises the Medicare Physician Fee Schedule (MPFS) each year. It’s the list that contains predetermined payment rates for medical services and procedures covered under Medicare.

Quick context:
CPT codes – describe procedures, not payment rates
HCPCS – coding system (includes CPT), not the payment list itself
Eligibility – who qualifies, not pricing
Medicare Physician Fee Schedule – ✔ where the annual service rates are set

Question 2

Which type of procedures have a 10-day global period?

Simple procedure
Extensive procedures
Minor procedure
Major procedures

Answer 2

✅ Minor procedure
Quick guide:
0 days – minor procedure with no post-op follow-up included
10 days – minor procedure (limited post-op care included)
90 days – major procedures

Question 3

When a preauthorization is provided so that the patient can see a specialist, this is a(n) __________.

Remittance
ABN
Referral
Dismissal

Answer 3

✅ Referral

A referral is the preauthorization given so a patient can see a specialist, usually from a primary care provider.

Why the others are incorrect:
Remittance – explanation of payment from insurance
ABN (Advance Beneficiary Notice) – notice that Medicare may not pay
Dismissal – termination of care/provider relationship

Question 4

What type of referral is being conducted when a primary care physician contacts the specialist and provides approval?

Verbal
Direct
Self
Formal

Answer 4

Verbal

Question 5

Billing for a higher level of service than what was provided is an example of what coding error?

Upcoding
Downcoding
Code linkage
None of the above

Answer 5

✅ Upcoding
Upcoding occurs when a provider bills for a higher level of service or more expensive procedure than what was actually performed, often to receive higher reimbursement.
Quick contrast:
Downcoding – billing a lower level than performed
Code linkage – connecting diagnosis codes to procedure codes
None of the above – doesn’t apply here

Question 6

What document is provided to a patient when the physician believes that Medicare will not pay for a service?

Remittance advice
Advance beneficiary notice
Preauthorization
Payment plan

Answer 6

✅ Advance Beneficiary Notice (ABN)
An ABN is given to a patient when the physician believes Medicare may not cover a service, so the patient is informed they may be financially responsible if Medicare denies payment.

Quick context on the others:
Remittance advice – explanation of payment from insurance
Preauthorization – approval before a service is provided
Payment plan – arrangement for patient to pay bills over time

Question 7

What is the name of a claim form with no billing or coding errors?

Edited
Dirty
Clean
Eligible

Answer 7

✅ Clean

Question 8

If a claim is rejected, which could be a reason?

filed not timely
missing patient info
code linkage error
all of the above

Answer 8

✅ all of the above

Question 9

Where is a CMS-1500 or HIPAA837P claim used?

Answer 9

✅ Physician’s office

Question 10

Which is approval obtained from the insurance payer prior to a patient being admitted to the hospital?

Referral
Preauthorization
Authorization
Precertification

Answer 10

✅ Precertification

Precertification is the approval obtained from the insurance payer before a patient is admitted to the hospital to ensure the service is medically necessary and covered.
Quick distinctions:

Referral – PCP sends patient to a specialist
Preauthorization – prior approval for services, often outpatient or procedures
Authorization – general approval from payer, broader term
Precertification – specifically for hospital admissions

Question 11

Which form is important to the revenue cycle to capture information and track the patient’s office visit?

Answer 11

✅ Encounter form

Question 12

Which are paper-based claim guidelines for outpatient billing?

Use original red form
Use CMS-1500
Print in black ink
All of the above

Answer 12

✅ All of the above
For paper-based outpatient claims, the standard guidelines include:
Use original red form – the CMS-1500 red-ink form for paper submission
Use CMS-1500 – the designated claim form for outpatient services
Print in black ink – required for machine readability

Question 13

The global package includes which of the following?

Time units
Preoperative visit
Physical status
Qualifying circumstances

Answer 13

✅ Preoperative visit
The global package (or global surgical package) includes all the routine services related to a surgery, such as:
Preoperative visits
The surgery itself
Postoperative care related to the procedure
It does not include:
Time units – not billed separately
Physical status – relates to anesthesia scoring
Qualifying circumstances – may affect anesthesia billing, not included in global surgical package

Question 14

Improper coding that could lead to an inappropriate payment is part of which national Medicare Correct Coding Initiative?

CPT
CMS
MUE
NCCI

Answer 14

✅ NCCI (National Correct Coding Initiative)
The NCCI is designed to prevent improper coding that could lead to inappropriate Medicare payments. It provides rules and edits to ensure services are coded correctly and not duplicated or unbundled.
Quick context on the others:
CPT – coding system for procedures
CMS – Centers for Medicare & Medicaid Services, oversees Medicare
MUE – Medically Unlikely Edits, a subset of NCCI that limits units of

Question 15

To determine the correct diagnosis to assign to a procedure, what must be understood?

Was the diagnosis present on admission
Medical necessity for code linkage
Medications prescribed
All of the above

Answer 15

✅ Medical necessity for code linkage
To assign the correct diagnosis to a procedure, you must understand the medical necessity, which ensures that the procedure is justified based on the patient’s condition. This is called code linkage — connecting diagnosis codes to procedure codes.
Why the others aren’t required for this purpose:
Diagnosis present on admission – important for inpatient reporting, but not for general code linkage
Medications prescribed – may support treatment, but not required to assign the diagnosis

Question 16

Which federal provision provides incentives for electronic health records utilization?

Federal Register
Quality initiatives
Meaningful use
CMA reporting

Answer 16

✅ Meaningful use
The Meaningful Use program, established under federal law, provides incentives to healthcare providers for the adoption and effective use of electronic health records (EHRs) to improve patient care.
Quick context on the others:
Federal Register – official government publication for rules and notices
Quality initiatives – general programs to improve care, not specific EHR incentives
CMA reporting – relates to reporting to the California Medical Association or similar, not federal EHR incentives

Question 17

Medicare uses the Medicare Physician Fee Schedule (MPFS) based on which of the following?

AMA
RVS
CMS
RBRVS

Answer 17

✅ RBRVS (Resource-Based Relative Value Scale)
Medicare’s Medicare Physician Fee Schedule (MPFS) uses the RBRVS system to determine payment rates. This system assigns relative value units (RVUs) to services based on the resources required: physician work, practice expense, and malpractice costs.
Quick context:
AMA – American Medical Association, maintains CPT codes
RVS – relative value scale, general term, not the full Medicare system
CMS – Centers for Medicare & Medicaid Services, administers MPFS but doesn’t determine RVUs

Question 18

Which was developed by the Centers for Medicare and Medicaid Services as a correct coding initiative?

NCCI
CMS
LCD
NCD

Answer 18

✅ NCCI (National Correct Coding Initiative)
The NCCI was developed by CMS to promote correct coding and prevent improper Medicare payments. It provides coding edits and rules to ensure that procedures are billed appropriately.
Quick context on the others:
CMS – the agency itself, not a coding initiative
LCD (Local Coverage Determination) – rules for coverage at the local Medicare contractor level
NCD (National Coverage Determination) – national rules on what Medicare will cover

Question 19

What is used to indicate where a service is provided?

CPT
HCPCS
POS
None of the above

Answer 19

✅ POS (Place of Service)
POS codes are used on claims to indicate where a healthcare service was provided, such as a physician’s office, hospital, or outpatient clinic.
Quick context:
CPT – describes the procedure or service performed
HCPCS – codes for procedures, supplies, and equipment (includes CPT)

Question 20

Which type of managed care plan has the least flexibility?

Answer 20

✅ HMO

Question 21

Which physician contracts with the third-party payer and accepts the allowed amount as payment in full?

Credentialed
Participating
Nonparticipating
Guarantor

Answer 21

✅ Participating
A participating physician has a contract with the third-party payer (insurance company) and agrees to accept the payer’s allowed amount as full payment for covered services.
Quick context:
Credentialed – verified qualifications, not necessarily payment agreements
Nonparticipating – may not accept the payer’s allowed amount; can balance bill
Guarantor – the person responsible for payment, usually the patient

Question 22

Which determines whether a Medicare service or procedure is covered at the local level?

PQRS
NCD
CMS
LCD

Answer 22

✅ LCD (Local Coverage Determination)
An LCD is issued by a Medicare Administrative Contractor (MAC) to determine whether a specific service or procedure is covered locally, based on medical necessity and local policies.
Quick context:
PQRS – Physician Quality Reporting System, tracks quality, not coverage
NCD – National Coverage Determination, applies nationwide
CMS – administers Medicare but doesn’t make local coverage rules

Question 23

Which payment system is used by Medicare and many other payers?

RBRVS
POS
CMS
Charge-based

Answer 23

✅ RBRVS (Resource-Based Relative Value Scale)
RBRVS is the payment system used by Medicare and many other payers to determine physician reimbursement. It assigns relative value units (RVUs) based on:
Physician work
Practice expense
Malpractice costs
Quick context on the others:
POS – Place of Service, not a payment system
CMS – the agency, not the payment methodology
Charge-based – older system based on billed charges, largely replaced by RBRVS

Question 24

What type of claim allows for quicker payment, as it contains no errors or issues that would prevent timely payment?

Audit
Electronic
Clean
Rejected

Answer 24

✅ Clean
A clean claim is a claim that is free of errors or issues and meets all payer requirements, allowing for quicker, timely payment.
Quick context:
Audit – review of claims for accuracy, may delay payment
Electronic – method of submission, not necessarily error-free
Rejected – contains errors and will not be paid until corrected

Question 25

Which represents a gap, or the amount of money that a Medicare patient has to pay out of pocket for prescription drugs?

Answer 25

✅ Donut Hole

Question 26

When does an insurance claim begin? When the encounter is completed When the patient calls for an appointment When the authorization is approved None of the Above

Answer 26

✅ When the patient calls for an appointment

Question 27

When an employer and employee share the cost of health insurance, which type of insurance plan is this? Commercial Group Individual Managed

Answer 27

✅ Group A group health insurance plan is purchased by an employer (or another organization) and typically shared between the employer and employee, making it more affordable than individual coverage. Quick context: Commercial – general term for privately offered insurance Individual – purchased by a single person, not through an employer Managed – refers to a managed care structure (like HMO or PPO), not cost-sharing

Question 28

Which method is used to obtain authorization for a specific medical procedure? Preauthorization Referral Precertification Statement

Answer 28

✅ Precertification Precertification is the method used to obtain authorization for a specific medical procedure before it is performed, to verify medical necessity and coverage. Why the others don’t fit best in this question: Preauthorization – often used as a general term, but many exams distinguish it from precertification Referral – permission to see a specialist, not approval for a procedure Statement – a billing document, not an authorization method On many certification exams: Precertification = approval for procedures/services Preauthorization = broader term, sometimes used for referrals or services depending on context

Question 29

If a government agency conducts an audit on an office's documentation for claims submitted, this is a(n) __________ audit? Internal External Denied Retrospective

Answer 29

✅ External An external audit is conducted by a government agency or outside organization to review an office’s documentation and claims for accuracy and compliance. Quick context: Internal – done by the office itself Denied – refers to a claim that was not paid, not an audit type Retrospective – review of past claims, could be internal or external, but the key here is government agency involvement, making it external

Question 30

What is included with the surgical service package? Preoperative visit Postoperative visit Surgical procedure All of the above

Answer 30

✅ All of the above