Reimbursement Methods & Fee Schedules Flashcards
6 cards from real AAPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Reimbursement Methods & Fee Schedules flashcards as text
What is the difference between a 'participating' and 'non-participating' provider under Medicare?
Answer: Participating providers accept Medicare's allowed amount as payment in full; non-participating may charge more but have lower reimbursement
Participating providers accept assignment and receive 100% of the Medicare fee schedule, while non-participating providers receive only 95% and may charge up to 115% of the fee schedule.
What does 'allowed amount' mean in insurance billing?
Answer: The maximum amount an insurer will pay for a covered service based on their fee schedule or contract
The allowed amount is the negotiated rate between the provider and payer (or the established fee schedule amount) that sets the payment ceiling for a service.
What is geographic practice cost index (GPCI) used for?
Answer: Adjusting Medicare physician fee schedule payments based on the cost of practicing in different geographic locations
GPCIs adjust the work, practice expense, and malpractice RVU components of the Medicare fee schedule to reflect regional cost differences.
What is a stop-loss provision in a provider contract?
Answer: A limit on the financial risk a provider assumes, after which the payer covers additional costs
Stop-loss provisions protect providers (especially under capitation) from catastrophic financial losses by shifting risk back to the payer once a threshold is reached.
What is risk adjustment in managed care?
Answer: A process of modifying payments to plans or providers based on the health status of the enrolled population
Risk adjustment modifies capitation payments based on the health risk of enrolled members, ensuring plans and providers receive appropriate compensation for treating sicker patients.
What is coinsurance in health insurance?
Answer: The percentage of costs a patient shares with the insurer after meeting the deductible
Coinsurance is the patient's percentage share of costs for covered services after the deductible is met, for example, paying 20% while the insurer pays 80%.