CBCS Insurance Eligibility Verification 2 — Questions and Answers
Question 1: What is the 270/271 transaction in healthcare eligibility verification?
- A form used to submit prior authorization requests
- The HIPAA standard electronic transaction for eligibility and benefit inquiry (270) and response (271) (Correct answer)
- A Medicare enrollment form for new providers
- The standard format for claim status inquiries
Correct answer: The HIPAA standard electronic transaction for eligibility and benefit inquiry (270) and response (271)
The 270 is the electronic eligibility inquiry sent to payers; the 271 is the response containing the patient's coverage details, benefits, and cost-sharing information.
The 270/271 transaction set (Healthcare Eligibility Benefit Inquiry and Response) is one of the mandated HIPAA EDI standards. The 270 includes patient demographics, insurance ID, and specific benefit categories being inquired about. The 271 response provides: subscriber/dependent information, coverage dates, plan type, deductible amounts and amounts met, copay/coinsurance, covered/non-covered services, and network status. Real-time 271 responses enable same-day eligibility verification. Most practice management systems and clearinghouses support 270/271 transactions.
Question 2: What should be verified during insurance eligibility verification before an appointment?
- Only whether the patient has active insurance coverage
- Active coverage, effective dates, deductible/coinsurance/copay amounts, referral requirements, network status of provider, and coverage for the specific services planned (Correct answer)
- Only the patient's copay amount for the visit type
- Insurance coverage and the patient's social security number
Correct answer: Active coverage, effective dates, deductible/coinsurance/copay amounts, referral requirements, network status of provider, and coverage for the specific services planned
Complete eligibility verification encompasses active coverage status, benefit details (deductible, copay, coinsurance), out-of-pocket maximum, referral/authorization requirements, and whether the planned services are covered.
Comprehensive eligibility verification checklist: (1) Active coverage (effective and termination dates), (2) Primary vs. secondary coverage, (3) In-network vs. out-of-network provider status, (4) Plan type (HMO/PPO/EPO), (5) Deductible (individual/family, amount met YTD), (6) Out-of-pocket maximum (amount met YTD), (7) Copay and coinsurance by service type, (8) Referral requirements (do they need a referral from their PCP?), (9) Prior authorization requirements for planned services, (10) Coordination of benefits if multiple plans. Verifying all elements prevents claim denials and unexpected patient bills.
Question 3: What does 'coordination of benefits (COB) information' need to be confirmed during eligibility verification for a patient with two insurance plans?
- Whether the patient prefers to use their primary or secondary insurance
- Which plan is primary (pays first), which is secondary, and whether the plans coordinate to prevent duplicate payment (Correct answer)
- Only whether both plans cover the planned services
- Whether the patient has met both plans' deductibles
Correct answer: Which plan is primary (pays first), which is secondary, and whether the plans coordinate to prevent duplicate payment
COB verification confirms the payment order — which plan is primary and which is secondary — and ensures proper billing sequence to comply with both plans' requirements and maximize claim payment.
COB verification steps: (1) Confirm all active insurance plans (patients sometimes don't disclose secondary coverage), (2) Determine primary/secondary order using COB rules (birthday rule for dependents, Medicare Secondary Payer rules for Medicare-eligible patients with employer coverage, etc.), (3) Note each plan's COB requirements — some require COB information on the primary claim, (4) Verify both plans' network status (provider may be in-network with one but not the other), (5) Document in patient account. Incorrect COB order is a common cause of claim denials and delayed reimbursement.
Question 4: What is the Medicare Secondary Payer (MSP) rule?
- Medicare always pays as the primary payer before other insurance
- Certain situations require Medicare to pay as secondary to another payer, such as employer group health plans for active workers, workers' compensation, or auto accident liability insurance (Correct answer)
- Medicare only pays for services when no other insurance exists
- Medicare automatically becomes the secondary payer when a patient turns 65
Correct answer: Certain situations require Medicare to pay as secondary to another payer, such as employer group health plans for active workers, workers' compensation, or auto accident liability insurance
MSP rules specify situations where Medicare must pay after another insurer — including active worker employer group health plans, workers' compensation, FECA, auto/liability insurance, and ESRD group health plans during a coordination period.
Key MSP situations: (1) Working aged — Medicare beneficiary has employer group health plan through current employer with 20+ employees → EGHP pays primary, (2) Large Group Health Plan (LGHP) for disability — employer with 100+ employees → LGHP pays primary, (3) ESRD — within 30-month coordination period → GHP pays primary, (4) Workers' compensation — for work-related injury, (5) No-fault/liability — for accident-related care. Providers must ask MSP questions to determine payment order. Billing Medicare primary when it should be secondary is a compliance violation.
Question 5: What is the purpose of a voice authorization in insurance verification?
- To obtain written permission from the patient to verify their insurance
- To verify coverage and obtain an authorization number from the payer over the phone when electronic verification is unavailable or inconclusive (Correct answer)
- To authorize the patient to speak on behalf of the insurance company
- To obtain a physician's verbal order for a service before billing
Correct answer: To verify coverage and obtain an authorization number from the payer over the phone when electronic verification is unavailable or inconclusive
Voice authorization involves calling the payer's provider services line to verify benefits and obtain a reference or authorization number when electronic verification doesn't provide sufficient detail or when real-time approval is needed.
Voice authorization is used for: services requiring real-time pre-authorization (same-day procedures, urgent services), cases where the electronic 271 response is insufficient or unclear, new patient benefit verification for complex cases, confirming referral status, and documenting specific benefit limitations. Best practices for voice verification: document the payer's representative name, reference/auth number, date/time of call, and specific benefits confirmed. Always record the authorization number in the patient account — this is your proof of pre-approval if the claim is later denied.
Question 6: What is the significance of the 'group number' on an insurance card?
- It identifies the specific plan design and benefits package associated with an employer's group contract with the insurance company (Correct answer)
- It is the patient's individual member identification number
- It indicates the insurance company's local branch office
- It identifies the patient's primary care physician within the plan network
Correct answer: It identifies the specific plan design and benefits package associated with an employer's group contract with the insurance company
The group number on an insurance card identifies the employer's group contract with the insurance plan, linking the patient to their specific employer-sponsored benefit package and coverage terms.
Group numbers are used by payers to identify the employer group, plan sponsor, or union that purchased the insurance coverage. Billers use group numbers when: submitting claims (required on CMS-1500 Box 11 for the insured's group number), verifying eligibility (group number helps locate the correct benefit plan when an employer offers multiple options), and identifying plan-specific rules (different group contracts may have different deductibles, copays, or covered services even with the same insurance company). Confusing the group number with the member ID is a common registration error.
CBCS Insurance Eligibility Verification 2
What is the 270/271 transaction in healthcare eligibility verification?