HAC Healthcare Accounting Billing & Reimbursement 2 — Questions and Answers
Question 1: Under the Medicare Inpatient Prospective Payment System (IPPS), what primarily determines the payment a hospital receives for a stay?
- The actual cost of services rendered
- The Diagnosis-Related Group (DRG) assigned to the discharge (Correct answer)
- The number of days the patient is hospitalized
- The number of procedures performed during the stay
Correct answer: The Diagnosis-Related Group (DRG) assigned to the discharge
IPPS pays hospitals a fixed amount based on the DRG assigned at discharge, not actual costs or length of stay.
Question 2: A claim is returned to the provider with a Remittance Advice Remark Code (RARC) of CO-97. What does this mean?
- The claim was paid in full
- The service was denied because it is included in the allowance for another service (Correct answer)
- The patient's eligibility could not be verified
- The claim requires additional documentation
Correct answer: The service was denied because it is included in the allowance for another service
CO-97 indicates the payment was adjusted because the service or procedure is bundled into the allowance of another service.
Question 3: Which federal law mandates the use of standardized electronic transactions and code sets in healthcare billing?
- Affordable Care Act (ACA)
- Health Insurance Portability and Accountability Act (HIPAA) (Correct answer)
- False Claims Act (FCA)
- Stark Law
Correct answer: Health Insurance Portability and Accountability Act (HIPAA)
HIPAA's Administrative Simplification provisions require the use of standardized electronic transaction formats and code sets.
Question 4: What is a 'crossover claim' in Medicare/Medicaid billing?
- A claim submitted to two different commercial payers
- A claim where Medicare pays first and automatically forwards the balance to Medicaid (Correct answer)
- A claim that spans two different fiscal years
- A claim filed for services provided across two different states
Correct answer: A claim where Medicare pays first and automatically forwards the balance to Medicaid
A crossover claim is one where Medicare is primary and automatically crosses over the remaining balance to Medicaid as the secondary payer.
Question 5: In the context of the Revenue Cycle, what does 'cash posting' refer to?
- Sending statements to patients for outstanding balances
- Recording payments received from payers and patients into the accounting system (Correct answer)
- Submitting electronic claims to insurance companies
- Verifying patient insurance eligibility before the visit
Correct answer: Recording payments received from payers and patients into the accounting system
Cash posting is the process of recording all payments, adjustments, and denials from payers and patients into the practice management system.
Question 6: A hospital's chargemaster lists a service at $5,000, but the Medicare fee schedule allows $1,200. The hospital is a participating provider. What amount is the patient's 20% coinsurance based on?
- $5,000 (the chargemaster rate)
- $1,200 (the Medicare-allowed amount) (Correct answer)
- $3,800 (the difference between chargemaster and allowed amount)
- $0, because Medicare pays 100%
Correct answer: $1,200 (the Medicare-allowed amount)
For participating providers, Medicare cost-sharing (coinsurance) is calculated on the Medicare-allowed amount, not the billed charges.
Question 7: What is the primary purpose of a National Provider Identifier (NPI)?
- To identify a patient's insurance policy number
- To serve as a unique identification number for covered healthcare providers in standard transactions (Correct answer)
- To classify the type of medical service rendered
- To indicate the geographic region of a healthcare facility
Correct answer: To serve as a unique identification number for covered healthcare providers in standard transactions
The NPI is a 10-digit unique identifier assigned to healthcare providers for use in HIPAA standard electronic transactions.
HAC Healthcare Accounting Billing & Reimbursement 2
Under the Medicare Inpatient Prospective Payment System (IPPS), what primarily determines the payment a hospital receives for a stay?