AAPC Reimbursement Methods & Fee Schedules 1 — Questions and Answers
Question 1: What is a fee-for-service (FFS) reimbursement model?
- Paying a fixed amount per patient per month
- Paying providers for each individual service or procedure performed (Correct answer)
- Paying based on patient outcomes
- Paying a bundled amount per episode of care
Correct answer: Paying providers for each individual service or procedure performed
In fee-for-service, providers are paid a separate fee for each service rendered, incentivizing volume of services rather than outcomes.
Question 2: What is capitation in managed care reimbursement?
- A penalty for excessive billing
- A fixed per-member-per-month payment to a provider for all covered services regardless of utilization (Correct answer)
- A type of stop-loss insurance
- A reimbursement method based on diagnosis codes
Correct answer: A fixed per-member-per-month payment to a provider for all covered services regardless of utilization
Capitation pays providers a set monthly amount for each enrolled patient, regardless of whether that patient seeks services.
Question 3: What is the Medicare Physician Fee Schedule (MPFS)?
- A list of excluded services
- A payment schedule that determines how much Medicare pays physicians for covered services based on RVUs (Correct answer)
- A list of approved medications
- A credentialing requirement for physicians
Correct answer: A payment schedule that determines how much Medicare pays physicians for covered services based on RVUs
The MPFS establishes payment rates for services provided by physicians and other qualified professionals under Medicare Part B, calculated using relative value units.
Question 4: What does a relative value unit (RVU) represent in physician reimbursement?
- The patient's out-of-pocket cost
- A numeric value representing the work, practice expense, and malpractice components of a medical service (Correct answer)
- The number of services performed per day
- A patient satisfaction score
Correct answer: A numeric value representing the work, practice expense, and malpractice components of a medical service
RVUs quantify the physician work, practice expenses, and malpractice insurance costs associated with each service, forming the basis of Medicare physician payments.
Question 5: In the Medicare Physician Fee Schedule, what is the 'conversion factor'?
- A formula for converting ICD-10 codes to CPT codes
- A dollar amount multiplied by total RVUs to calculate Medicare's payment for a service (Correct answer)
- The ratio of denied to paid claims
- A factor used to adjust for geographic location
Correct answer: A dollar amount multiplied by total RVUs to calculate Medicare's payment for a service
The conversion factor is a national dollar amount set by CMS annually that, when multiplied by the total RVUs for a service, determines the Medicare payment rate.
Question 6: What is a bundled payment model?
- Billing each service separately
- A single payment to cover all services related to a specific episode of care or condition (Correct answer)
- A monthly capitation payment
- A Medicare fee schedule adjustment
Correct answer: A single payment to cover all services related to a specific episode of care or condition
Bundled payments provide a single lump-sum payment for all services during a defined episode of care, encouraging coordination and efficiency.
AAPC Reimbursement Methods & Fee Schedules 1
What is a fee-for-service (FFS) reimbursement model?