Insurance Policies & Contracts Flashcards
7 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 7 Insurance Policies & Contracts flashcards as text
Which term describes the process by which an insurer reviews a claim after payment and recoups funds that were paid in error?
Answer: Retroactive denial / post-payment audit
A retroactive denial or post-payment audit allows payers to recover funds already paid if the claim is later found to have been paid incorrectly or fraudulently.
A plan document states coverage is provided for 'medically necessary' services. The term 'medical necessity' in this context is primarily defined by:
Answer: The payer's own criteria as stated in the policy or contract
Payers define medical necessity within their own policy or contract language, and their criteria govern coverage decisions regardless of the provider's opinion.
A provider contract states that disputes must go through binding arbitration. This means that in a payment dispute:
Answer: A neutral arbitrator's decision is final and cannot be appealed in court
Binding arbitration requires both parties to accept the arbitrator's decision as final, waiving the right to litigate the dispute in court.
A patient's Explanation of Benefits (EOB) shows a 'contractual adjustment' of $350. This means:
Answer: The provider wrote off $350 as the difference between billed and allowed amounts
A contractual adjustment represents the amount the provider agreed to write off as a condition of their participation contract with the insurer.
An insurance policy's 'coordination of benefits' (COB) provision prevents:
Answer: Overpayment when a patient has more than one insurance plan
COB provisions establish the order of payment when a patient has multiple insurers and ensure combined payments do not exceed 100% of the allowed charges.
A provider receives a notice that their contract with a payer will terminate in 90 days. During this 90-day period, the provider should:
Answer: Continue treating existing patients and notify them of the upcoming change
During a contract termination notice period, providers should continue treating existing patients and notify them of the change to allow time to transition care or find new providers.
Which provision in a commercial insurance contract specifies how long after a service date the provider has to submit a claim?
Answer: Timely filing provision
The timely filing provision in a provider contract establishes the deadline by which claims must be submitted, after which they may be denied.