CBCS — Certified Billing and Coding Specialist — Questions and Answers

Question 1: What does the acronym HCPCS stand for?

Health Claims Processing and Coding Standards
Hospital Coding and Payment Classification System
Healthcare Common Procedure Coding System (Correct answer)
Health Care Procedural Coding System

Correct answer: Healthcare Common Procedure Coding System

HCPCS stands for Healthcare Common Procedure Coding System, which includes Level I (CPT codes) and Level II (alphanumeric codes for supplies, equipment, and services not in CPT).

Question 2: What does an 'Excludes1' note in ICD-10-CM mean?

The two codes cannot be used together on the same claim (Correct answer)
The code is exempt from POA reporting
The excluded code may be used together with the code
The excluded code is a manifestation code

Correct answer: The two codes cannot be used together on the same claim

Excludes1 means the two conditions cannot occur together and therefore cannot both be coded.

Question 3: A large hospital system that employs hundreds of physicians applies for a National Provider Identifier (NPI) to use for billing purposes for the organization itself. Which type of NPI would this entity receive?

Type 2 (Organization) (Correct answer)
Type 3 (Facility)
Group Practice NPI
Type 1 (Individual)

Correct answer: Type 2 (Organization)

NPIs come in two types. Type 1 NPIs are for individual healthcare providers (e.g., physicians, dentists). Type 2 NPIs are for organizational healthcare providers, such as hospitals, group practices, and nursing homes.

Question 4: What is a fee-for-service (FFS) reimbursement model?

A model where providers are paid a flat monthly rate per patient
A model that pays providers based on achieving patient outcomes benchmarks
A traditional payment model where providers are paid a separate fee for each service performed (Correct answer)
A model where patients pay providers directly without insurance involvement

Correct answer: A traditional payment model where providers are paid a separate fee for each service performed

Fee-for-service is the traditional model where providers receive a separate payment for each individual service rendered. Volume of services drives revenue rather than quality or outcomes.

Question 5: What is the Stark Law's 'in-office ancillary services exception'?

An exception that exempts small practices from the Stark Law's referral restrictions
An exception that permits physicians to refer patients to their own practice or group practice for designated health services (DHS) that are provided in the same building and supervised by the referring physician (Correct answer)
An exception that allows physicians to self-refer patients to any service within their own office building
An exception that allows self-referral to hospital services owned by the physician

Correct answer: An exception that permits physicians to refer patients to their own practice or group practice for designated health services (DHS) that are provided in the same building and supervised by the referring physician

The in-office ancillary services exception allows physician practices to provide and bill for certain DHS (like lab, imaging, PT) within their practice, provided specific location, supervision, and billing requirements are met.

Question 6: A billing specialist receives a remittance advice (RA) that shows a claim for a complex patient visit, billed with CPT code 99215, was reimbursed at the lower rate for CPT code 99213. The payer did not deny the claim but adjusted the payment. This action by the payer is known as:

Rejection
Downcoding (Correct answer)
Upcoding
Unbundling

Correct answer: Downcoding

Downcoding occurs when a payer changes a submitted CPT code to a lower-level, less complex, and lower-paying code. This often happens if the payer's adjudication system determines the submitted documentation does not support the higher-level code. Rejection refers to a claim that is not processed due to errors, unbundling is billing separately for procedures that should be grouped, and upcoding is the fraudulent practice of billing a higher-level code than the service provided.

Question 7: What is the purpose of collecting a patient's demographic information at registration?

To schedule future appointments only
To determine the patient's diagnosis
To select the appropriate CPT codes
To ensure accurate claim submission and correct patient identification (Correct answer)

Correct answer: To ensure accurate claim submission and correct patient identification

Accurate demographic information (name, DOB, address, insurance ID) is critical for submitting error-free claims and preventing claim rejections.

Question 8: What is the first step a medical biller should take upon receiving a claim denial?

Immediately write off the denied amount
Identify the denial reason code and determine whether the denial is correctable, appealable, or valid (Correct answer)
Resubmit the claim without changes
Contact the patient to collect the balance

Correct answer: Identify the denial reason code and determine whether the denial is correctable, appealable, or valid

Upon receiving a denial, the first step is to review the reason/remark codes on the remittance advice to understand why the claim was denied and determine the appropriate course of action.

Question 9: What should a billing specialist do if they discover a significant billing error that could affect reimbursement?

Correct the error and resubmit the claim without notifying the insurance company
Ignore the error if it benefits the practice financially
Wait for the insurance company to identify the error before taking any action
Notify the insurance company immediately about the error and request an adjustment (Correct answer)

Correct answer: Notify the insurance company immediately about the error and request an adjustment

Ethical billing practices require transparency and honesty. If a significant billing error is discovered, the billing specialist must immediately notify the insurance company to correct the claim. This ensures compliance with regulations, prevents potential fraud accusations, and maintains the integrity of the billing process.

Question 10: A patient's insurance requires a referral from their PCP before seeing a specialist. This is characteristic of which plan type?

PPO
Indemnity plan
EPO
HMO (Correct answer)

Correct answer: HMO

Health Maintenance Organizations (HMOs) typically require a referral from the primary care physician before a member can see a specialist.

Question 11: Which of the following is a common reason for prior authorization denial?

Insufficient clinical documentation to support medical necessity (Correct answer)
The requested service is listed as covered in the patient's benefit plan
The provider is in-network with the payer
The patient has met their annual deductible

Correct answer: Insufficient clinical documentation to support medical necessity

Insufficient or incomplete clinical documentation is one of the most common reasons prior authorization requests are denied.

Question 12: What is CHIP (Children's Health Insurance Program)?

A joint federal-state program providing low-cost health coverage to children in families that earn too much to qualify for Medicaid but cannot afford private insurance (Correct answer)
A Medicare program providing dental coverage for children of Medicare beneficiaries
A federal grant program for children's hospitals to provide uncompensated care
A commercial insurance plan specifically designed for pediatric patients

Correct answer: A joint federal-state program providing low-cost health coverage to children in families that earn too much to qualify for Medicaid but cannot afford private insurance

CHIP provides low-cost health coverage to children in families with incomes above the Medicaid threshold but who cannot afford private insurance. It is administered by states within federal guidelines.

Question 13: When verifying insurance at registration, which item confirms the patient's plan is currently active?

Remittance advice
Eligibility and benefits verification (Correct answer)
Explanation of Benefits (EOB)
Prior authorization number

Correct answer: Eligibility and benefits verification

Eligibility and benefits verification confirms that the patient's insurance is active, identifies coverage details, and prevents claim denials for inactive coverage.

Question 14: What is the Medicare redetermination process?

A process for reviewing Medicare premium calculations
A Medicare audit process for identifying fraud
The first level of Medicare's five-level administrative appeals process, where the Medicare Administrative Contractor reviews the claim denial (Correct answer)
A secondary billing process for Medicare crossover claims

Correct answer: The first level of Medicare's five-level administrative appeals process, where the Medicare Administrative Contractor reviews the claim denial

Medicare redetermination is the first level of appeal, filed with the Medicare Administrative Contractor (MAC) within 120 days of the initial determination. The MAC reviews the claim and makes a new determination.

Question 15: Which CPT code range covers pathology and laboratory services?

70010–79999
90281–99199
80047–89398 (Correct answer)
86000–89999

Correct answer: 80047–89398

CPT codes 80047-89398 cover pathology and laboratory services.

Question 16: A surgeon performs a procedure on a patient's left fourth toe. To specify the exact anatomical location, which type of modifier should be appended to the CPT code?

A HCPCS Level II modifier (Correct answer)
A payment policy modifier
A CPT informational modifier
A CPT Modifier 51

Correct answer: A HCPCS Level II modifier

HCPCS Level II modifiers are used to provide specific details not covered by CPT modifiers, including precise anatomical locations such as individual fingers and toes (e.g., T1-T9). Modifiers like -T3 would be used to specify the left fourth toe.

Question 17: What is a HIPAA breach and what are the notification requirements?

Any unauthorized viewing of PHI by a non-clinical staff member, requiring immediate patient notification
An impermissible acquisition, access, use, or disclosure of PHI that compromises its security or privacy, requiring notifications to individuals, HHS, and potentially the media (Correct answer)
Only a cyberattack that exposes ePHI to external hackers, requiring law enforcement notification
Any accidental mailing of a bill to the wrong address, requiring no notification

Correct answer: An impermissible acquisition, access, use, or disclosure of PHI that compromises its security or privacy, requiring notifications to individuals, HHS, and potentially the media

A HIPAA breach is an impermissible use or disclosure of unsecured PHI that is presumed to be a breach unless a risk assessment shows low probability that PHI was compromised. Notification to affected individuals, HHS, and (for large breaches) media is required.

Question 18: What is a guarantor in the context of patient accounts?

The patient's primary care physician
The person financially responsible for the patient's account (Correct answer)
The insurance company
The referring provider

Correct answer: The person financially responsible for the patient's account

The guarantor is the individual (often the patient or a parent/guardian) who is legally responsible for paying the medical bill.

Question 19: What is the purpose of a voice authorization in insurance verification?

To verify coverage and obtain an authorization number from the payer over the phone when electronic verification is unavailable or inconclusive (Correct answer)
To obtain written permission from the patient to verify their insurance
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.

Question 20: Which chapter in ICD-10-CM contains codes for external causes of morbidity?

Chapter 18
Chapter 21
Chapter 20 (Correct answer)
Chapter 19

Correct answer: Chapter 20

Chapter 20 (V00–Y99) contains codes for external causes of morbidity.

Question 21: Under HIPAA, which of the following is considered a covered entity?

A medical billing software vendor
A pharmaceutical manufacturer
An employer providing workers' compensation benefits
A health plan, healthcare clearinghouse, or healthcare provider that transmits health information electronically (Correct answer)

Correct answer: A health plan, healthcare clearinghouse, or healthcare provider that transmits health information electronically

HIPAA covered entities are health plans, healthcare clearinghouses, and healthcare providers that conduct covered transactions electronically. Business associates that work with covered entities also have HIPAA obligations.

Question 22: In ICD-10-CM, what does the 'Includes' note indicate?

Codes that require an additional diagnosis
Codes that must be sequenced first
Conditions that are excluded from the code
Conditions that are classified to the code or category (Correct answer)

Correct answer: Conditions that are classified to the code or category

An 'Includes' note clarifies the scope of a code by listing conditions classified within that code or category.

Question 23: What does the 'Z' category of ICD-10-CM codes represent?

Codes for factors influencing health status and contact with health services (non-disease reasons for encounters) (Correct answer)
Codes for injuries and trauma
Codes for late effects of disease or injury
Codes for uncertain or unconfirmed diagnoses

Correct answer: Codes for factors influencing health status and contact with health services (non-disease reasons for encounters)

Z codes (Chapter 21) represent encounters for reasons other than illness or injury, such as preventive care, screenings, immunizations, family history, status codes, and follow-up visits.

Question 24: Under Medicare Secondary Payer (MSP) rules, in which situation is Medicare the secondary payer?

When an employee aged 70 is covered by their employer's group health plan (Correct answer)
When a patient has a Medicare Supplement (Medigap) policy
When a patient is over age 65 with no other insurance
When a patient is on Medicare and Medicaid simultaneously

Correct answer: When an employee aged 70 is covered by their employer's group health plan

Under MSP rules, for active employees aged 65+ at companies with 20+ employees, the employer's group health plan is primary and Medicare is secondary.

Question 25: What is the purpose of a HIPAA Notice of Privacy Practices (NPP)?

To notify patients that their information has been shared with another healthcare provider
To provide patients with a list of all providers who have accessed their records
To inform patients of how their PHI may be used and disclosed, their privacy rights, and the covered entity's legal duties regarding PHI (Correct answer)
To notify patients of upcoming changes to their insurance premiums

Correct answer: To inform patients of how their PHI may be used and disclosed, their privacy rights, and the covered entity's legal duties regarding PHI

The NPP is a document that covered entities must provide to patients describing their privacy rights, how PHI may be used and disclosed, the covered entity's privacy obligations, and how patients can exercise their rights.

Question 26: What are relative value units (RVUs) used for in physician payment?

To rate the quality of care provided by a physician compared to peers
To determine the licensing requirements for a physician in each state
To measure a physician's productivity and calculate Medicare payment based on the complexity and resource intensity of services (Correct answer)
To classify hospital inpatient stays by diagnosis and resource utilization

Correct answer: To measure a physician's productivity and calculate Medicare payment based on the complexity and resource intensity of services

RVUs measure the relative work, practice expense, and malpractice risk associated with a physician service. The Medicare Physician Fee Schedule payment is calculated by multiplying total RVUs by a conversion factor.

Question 27: What is the correct action when a patient's name on the insurance card differs slightly from the registration system?

Verify the correct legal name with the patient and update the record to match insurance records (Correct answer)
Ignore the discrepancy and submit the claim
Use the registration system name regardless
Cancel the appointment

Correct answer: Verify the correct legal name with the patient and update the record to match insurance records

Name mismatches between registration and insurance records cause claim rejections, so the billing team must verify and correct the name to match insurer records.

Question 28: What does 'Medigap' (Medicare Supplement Insurance) cover?

Services that Medicare considers experimental or investigational
Out-of-pocket costs associated with Original Medicare, such as deductibles, copays, and coinsurance, sold by private insurance companies (Correct answer)
Dental, vision, and hearing services excluded from Original Medicare
Prescription drugs not covered by Medicare Part B

Correct answer: Out-of-pocket costs associated with Original Medicare, such as deductibles, copays, and coinsurance, sold by private insurance companies

Medigap plans are standardized supplemental insurance policies sold by private insurers that help pay the patient's share of Original Medicare costs (deductibles, coinsurance, copays).

Question 29: What are patients' rights under the HIPAA Privacy Rule?

The right to have all their medical bills forgiven if information is disclosed without permission
The right to have all of their PHI destroyed upon request
The exclusive right to decide who can access their complete medical record, with no exceptions
Rights including access to their PHI, request for amendments, accounting of disclosures, right to restrict certain uses/disclosures, and right to receive confidential communications (Correct answer)

Correct answer: Rights including access to their PHI, request for amendments, accounting of disclosures, right to restrict certain uses/disclosures, and right to receive confidential communications

The HIPAA Privacy Rule gives patients specific rights: access their health records, request corrections (amendments), obtain an accounting of certain disclosures, request restrictions on use/disclosure, and receive confidential communications.

Question 30: What should be verified during insurance eligibility verification before an appointment?

Insurance coverage and the patient's social security number
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
Only whether the patient has active insurance coverage

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.

Question 31: What is an external appeal in the context of insurance claim denials?

An appeal filed directly with CMS for Medicare denials
An appeal reviewed by an independent organization outside the insurance company, available after exhausting internal appeals (Correct answer)
An appeal sent to a different department within the insurance company
An appeal submitted by the patient rather than the provider

Correct answer: An appeal reviewed by an independent organization outside the insurance company, available after exhausting internal appeals

An external appeal (independent external review) is conducted by an Independent Review Organization (IRO) outside the insurance company after the internal appeals process has been exhausted, providing an unbiased review.

Question 32: What is the ACA's individual mandate and what impact did it have on insurance billing?

A requirement for providers to accept all patients regardless of insurance status
A requirement that insurance companies cover all pre-existing conditions
A mandate requiring employers with 50+ employees to offer health insurance
The ACA requirement that most individuals obtain health insurance or pay a tax penalty, which expanded the insured population and reduced uncompensated care (Correct answer)

Correct answer: The ACA requirement that most individuals obtain health insurance or pay a tax penalty, which expanded the insured population and reduced uncompensated care

The individual mandate (reduced to $0 penalty federally after 2018) required most Americans to have minimum essential coverage or pay a tax penalty, expanding the insured population and reducing uncompensated care in healthcare settings.

Question 33: When coding obstetric cases in ICD-10-CM, what must always be assigned?

A code from Chapter 18 for signs and symptoms
A POA indicator for all obstetric codes
A final character for the trimester or weeks of gestation (Correct answer)
A code from Chapter 21 for pre-existing conditions

Correct answer: A final character for the trimester or weeks of gestation

Obstetric codes require a final character designating the trimester (1st, 2nd, 3rd) or, in some cases, weeks of gestation.

Question 34: What is the difference between a 'subscriber' and a 'dependent' in health insurance?

A subscriber pays higher premiums; dependents pay lower premiums
A subscriber is the individual who enrolls in and is primarily covered by the insurance policy; a dependent is a family member (spouse, child) covered under the subscriber's plan (Correct answer)
There is no practical billing difference between subscriber and dependent
A subscriber is the patient; a dependent is the patient's physician

Correct answer: A subscriber is the individual who enrolls in and is primarily covered by the insurance policy; a dependent is a family member (spouse, child) covered under the subscriber's plan

The subscriber (or policyholder) is the person who enrolled in the health plan, often through an employer. Dependents are family members who receive coverage under the subscriber's policy.

Question 35: What does 'coinsurance' mean in health insurance billing?

Dual coverage from two insurers
The percentage of costs a patient pays after the deductible is met (Correct answer)
The maximum benefit limit
A fixed per-visit fee

Correct answer: The percentage of costs a patient pays after the deductible is met

Coinsurance is the percentage of covered costs the patient is responsible for after meeting their deductible (e.g., 20% after a 80/20 plan).

Question 36: What is the OIG Exclusion Database and why must providers check it?

The List of Excluded Individuals/Entities (LEIE) — a registry of providers barred from participating in federal healthcare programs; employers must check it to avoid employing excluded individuals (Correct answer)
A list of insurance companies excluded from Medicare participation
A database of medications excluded from Medicare Part D formularies
A list of billing codes excluded from Medicare coverage nationally

Correct answer: The List of Excluded Individuals/Entities (LEIE) — a registry of providers barred from participating in federal healthcare programs; employers must check it to avoid employing excluded individuals

The LEIE is the OIG's registry of individuals and entities excluded from federal healthcare programs. Employing or contracting with an excluded person can result in civil monetary penalties for every claim submitted involving that person.

Question 37: What is the purpose of a National Provider Identifier (NPI)?

To classify diagnoses for billing purposes
To uniquely identify healthcare providers in standard transactions (Correct answer)
To identify a patient's insurance plan
To authorize prior approval for services

Correct answer: To uniquely identify healthcare providers in standard transactions

The NPI is a unique 10-digit identification number assigned to healthcare providers for use in standard electronic transactions under HIPAA.

Question 38: When a surgeon performs an arthroscopic knee procedure, which CPT code range applies?

29800–29999 (Correct answer)
27300–27499
27580–27599
20900–20999

Correct answer: 29800–29999

Arthroscopic knee procedures are found in the 29800–29999 range of CPT (arthroscopy section under musculoskeletal).

Question 39: What is interoperability in the context of electronic health records?

The ability of an EHR system to prevent data breaches
The ability of different EHR systems to exchange and use health information (Correct answer)
The process of converting paper records to electronic format
The ability to perform billing functions within an EHR

Correct answer: The ability of different EHR systems to exchange and use health information

Interoperability refers to the ability of different EHR systems to communicate, exchange, and use health information seamlessly.

Question 40: What is a compliance program in healthcare?

A software system for tracking patient compliance with treatment plans
An organizational framework of policies, procedures, and training designed to prevent, detect, and correct fraud, waste, and abuse (Correct answer)
A quality improvement initiative focused on patient safety
A government-mandated audit of all Medicare claims

Correct answer: An organizational framework of policies, procedures, and training designed to prevent, detect, and correct fraud, waste, and abuse

A healthcare compliance program is an internal system organizations use to ensure adherence to laws, regulations, and ethical standards, thereby preventing fraud and abuse.

Question 41: What is the purpose of the Medicare/Medicaid exclusion screening requirement?

To screen new Medicare beneficiaries for fraud history before granting enrollment
To exclude Medicare/Medicaid patients from receiving experimental treatments
To ensure that no federal healthcare program payments are made for services provided by an excluded individual or entity, protecting program integrity (Correct answer)
To exclude certain high-cost services from Medicare coverage to control costs

Correct answer: To ensure that no federal healthcare program payments are made for services provided by an excluded individual or entity, protecting program integrity

Exclusion screening ensures that providers, employees, contractors, and vendors who are barred from federal programs are not involved in Medicare/Medicaid service delivery or billing, preventing improper payments.

Question 42: Under HIPAA, which of the following is a covered entity?

An employer who sponsors a health plan
A health plan that pays for medical services (Correct answer)
A software company that builds EHR systems
A marketing firm that analyzes patient data for a hospital

Correct answer: A health plan that pays for medical services

Health plans are covered entities under HIPAA, along with healthcare providers and healthcare clearinghouses.

Question 43: Which federal program uses the Prospective Payment System (PPS) to reimburse hospitals?

Children's Health Insurance Program (CHIP)
TRICARE
Medicare (Correct answer)
Medicaid

Correct answer: Medicare

Medicare, the federal health insurance program for people 65 or older and certain younger people with disabilities, uses the Prospective Payment System (PPS) to reimburse hospitals. Under PPS, hospitals are paid a predetermined, fixed amount for each case based on the diagnosis-related group (DRG), regardless of the actual costs incurred. This system aims to control healthcare costs and encourage efficiency.

Question 44: A medical biller discovers that a physician has been consistently billing for services that were not documented. What is the biller's professional obligation?

Report the issue internally through the compliance program and refuse to submit fraudulent claims (Correct answer)
Ignore the issue as it is the physician's responsibility
Submit the claims and notify the payer directly
Continue processing claims to avoid disrupting cash flow

Correct answer: Report the issue internally through the compliance program and refuse to submit fraudulent claims

Healthcare professionals have an ethical and legal obligation to report suspected fraud through internal compliance channels and refuse to participate in fraudulent billing activities.

Question 45: Which of the following best demonstrates effective communication skills in a billing and coding role?

Providing clear explanations and answering patient questions thoroughly (Correct answer)
Assuming patients know the details about their insurance coverage
Using technical language without ensuring the patient understands
Sending standard form letters without personalization

Correct answer: Providing clear explanations and answering patient questions thoroughly

Effective communication in billing and coding involves ensuring patients fully understand their financial responsibilities and insurance processes. Providing clear, jargon-free explanations and patiently answering questions builds trust and reduces confusion. This approach empowers patients and minimizes disputes, unlike using technical language or making assumptions.

Question 46: What is CMS's Conditions of Participation (CoPs) for hospitals?

The participation agreement between hospitals and Medicare Administrative Contractors
The financial terms under which hospitals agree to participate in Medicare managed care plans
The conditions under which CMS authorizes new hospitals to begin operations
Federal health and safety standards that hospitals must meet to receive Medicare and Medicaid reimbursement (Correct answer)

Correct answer: Federal health and safety standards that hospitals must meet to receive Medicare and Medicaid reimbursement

CoPs are the minimum health and safety standards established by CMS that healthcare organizations (hospitals, home health agencies, SNFs, etc.) must meet to participate in Medicare and Medicaid programs.

Question 47: What is the main difference between a charge and a payment in the revenue cycle?

A charge is the amount collected; a payment is the amount billed
A charge is the copay; a payment is the deductible
A charge is the amount billed by the provider; a payment is the amount received from the payer or patient (Correct answer)
A charge is the Medicare fee schedule amount; a payment is the negotiated rate

Correct answer: A charge is the amount billed by the provider; a payment is the amount received from the payer or patient

A charge is the amount a provider bills for a service, while a payment is the amount actually received. The difference may result in adjustments, write-offs, or patient balances.

Question 48: Which of the following correctly describes 'laterality' in ICD-10-CM?

The sequencing of secondary diagnoses
The severity level of a diagnosis
A code specifying right, left, or bilateral (Correct answer)
The encounter type for traumatic injuries

Correct answer: A code specifying right, left, or bilateral

Laterality refers to identifying whether a condition affects the right side, left side, or both sides of the body.

Question 49: What is the HIPAA Security Rule's requirement for electronic PHI (ePHI)?

ePHI must be stored only on servers within the United States
ePHI access must be limited to licensed healthcare providers only
Covered entities must implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of ePHI (Correct answer)
ePHI must be encrypted using AES-256 encryption at all times

Correct answer: Covered entities must implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of ePHI

The Security Rule requires covered entities and business associates to implement three types of safeguards — administrative, physical, and technical — to protect ePHI from unauthorized access, use, or disclosure.

Question 50: What is the Federal Employees Health Benefits (FEHB) Program?

The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans (Correct answer)
Medicare coverage for federal government retirees
A health plan exclusively for members of Congress
A government-subsidized program for unemployed federal workers

Correct answer: The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans

FEHB is the health benefits program for federal civilian employees and retirees, offering enrollment in a choice of approved health plans (fee-for-service, HMO, HDHP/HSA) administered by OPM.

Question 51: Which code set is used to report physician and outpatient services on a CMS-1500 claim form?

ICD-10-CM
HCPCS Level III
UB-04
CPT (Correct answer)

Correct answer: CPT

CPT (Current Procedural Terminology) codes are used to report physician services, outpatient procedures, and other medical services on the CMS-1500 claim form.

Question 52: Which of the following is an example of a combination code in ICD-10-CM?

I10 (Essential hypertension)
J18.9 (Pneumonia, unspecified organism)
E11.40 (Type 2 diabetes with diabetic neuropathy, unspecified) (Correct answer)
E11.9 (Type 2 diabetes mellitus without complications)

Correct answer: E11.40 (Type 2 diabetes with diabetic neuropathy, unspecified)

E11.40 is a combination code that captures both type 2 diabetes and the associated neuropathy complication.

Question 53: Which of the following is a function of a healthcare clearinghouse?

Translating claims between non-standard formats and HIPAA-standard formats for transmission to payers (Correct answer)
Negotiating reimbursement rates between providers and payers
Credentialing providers for participation in insurance networks
Processing medical claims on behalf of patients directly

Correct answer: Translating claims between non-standard formats and HIPAA-standard formats for transmission to payers

Clearinghouses act as intermediaries that translate non-standard electronic claims into HIPAA-compliant formats and check claims for errors before sending them to payers.

Question 54: What is the primary purpose of the AHIMA and AAPC codes of ethics for medical coders?

To determine which coding credentials are most valuable
To set billing rates for coding services
To guide professional conduct, ensure accurate coding, and protect patient privacy (Correct answer)
To establish continuing education requirements

Correct answer: To guide professional conduct, ensure accurate coding, and protect patient privacy

Professional codes of ethics for coders emphasize accurate and complete coding, protecting patient confidentiality, avoiding fraud, and maintaining professional competence.

Question 55: Which insurance plan type requires members to choose a primary care physician (PCP) and get referrals to see specialists?

HMO (Correct answer)
POS
PPO
EPO

Correct answer: HMO

Health Maintenance Organizations (HMOs) typically require members to choose a primary care physician (PCP) within the network. The PCP acts as a gatekeeper, coordinating all of the patient's care and providing referrals to specialists if needed. This structure aims to manage costs and ensure integrated care within a defined network.

Question 56: What is a write-off in medical billing, and when is it appropriate?

A write-off is required whenever a patient has a deductible
A write-off is the adjustment of a balance that cannot or should not be collected — appropriate for contractual adjustments, small balance write-offs per policy, and hardship cases (Correct answer)
A write-off is always a loss for the practice; it should be avoided in all circumstances
A write-off should only be performed by the physician, not billing staff

Correct answer: A write-off is the adjustment of a balance that cannot or should not be collected — appropriate for contractual adjustments, small balance write-offs per policy, and hardship cases

Write-offs are appropriate for contractual adjustments (required by payer contracts), small balances (per practice policy), uncollectible accounts, and charity care — but should never be used to avoid collecting legitimate patient balances improperly.

Question 57: How should a billing specialist handle a situation where they realize a billing error could lead to overpayment by a patient?

Wait for the patient to notice and bring it up
Ignore the error if it benefits the practice financially
Cover up the mistake to avoid embarrassment
Correct the error, inform the patient, and provide a refund if necessary (Correct answer)

Correct answer: Correct the error, inform the patient, and provide a refund if necessary

Ethical billing practices dictate that any overpayment by a patient due to a billing error must be rectified promptly. The billing specialist has a responsibility to correct the mistake, transparently communicate it to the patient, and issue a refund for the overpaid amount. This upholds trust, ensures financial accuracy, and complies with consumer protection principles.

Question 58: What is the significance of CARC (Claim Adjustment Reason Codes) on a remittance advice?

They indicate the amount the patient owes after insurance payment
They are codes assigned by the provider to explain why a service was medically necessary
They are standardized codes that explain why a claim was adjusted or denied, used to categorize and manage denials effectively (Correct answer)
They identify which ICD-10-CM codes triggered a medical necessity review

Correct answer: They are standardized codes that explain why a claim was adjusted or denied, used to categorize and manage denials effectively

CARCs are standardized codes maintained by the X12 organization that appear on ERAs/RAs to explain why a payment was adjusted or denied. They allow for systematic tracking and management of denials.

Question 59: What is TRICARE and who is eligible for it?

A state-administered insurance program for government employees
A federal health program for low-income families
A supplemental insurance plan for Medicare beneficiaries
The health care program for active-duty service members, retirees, and their families through the Department of Defense (Correct answer)

Correct answer: The health care program for active-duty service members, retirees, and their families through the Department of Defense

TRICARE is the healthcare benefit for members of the uniformed services (active duty, National Guard/Reserve, retired) and their eligible family members, administered by the Department of Defense.

Question 60: What anatomical region is described by the term 'lumbar'?

Shoulder region
Upper chest
Neck
Mid-back and sides between ribs and pelvis (Correct answer)

Correct answer: Mid-back and sides between ribs and pelvis

The lumbar region refers to the lower back area between the thoracic spine and the sacrum, often documented in musculoskeletal billing.

Question 61: The abbreviation 'Hx' in clinical notes stands for:

History (Correct answer)
Hemorrhage
Hypoxia
Hypertension

Correct answer: History

Hx is a standard clinical abbreviation for 'history,' referring to the patient's medical history as documented by the provider.

Question 62: What is charge capture and why is it critical to the revenue cycle?

The process of documenting patient demographics at the time of service
The process of recording all services, procedures, and supplies provided to a patient so they can be billed accurately — revenue cannot be generated for services that are not captured (Correct answer)
The process of capturing insurance card images and storing them digitally
The automated process of matching diagnosis codes to CPT codes

Correct answer: The process of recording all services, procedures, and supplies provided to a patient so they can be billed accurately — revenue cannot be generated for services that are not captured

Charge capture is the process of recording all billable services and supplies from clinical documentation into the billing system. Missed charges represent permanent revenue loss — you cannot bill for what you didn't capture.

Question 63: A coder cannot determine the definitive diagnosis from the record of an outpatient visit. What should be coded?

The sign(s) or symptom(s) that prompted the visit (Correct answer)
An unspecified condition code
The working diagnosis listed by the physician
The highest-risk potential diagnosis

Correct answer: The sign(s) or symptom(s) that prompted the visit

For outpatient coding, when a definitive diagnosis has not been established, signs and symptoms are coded.

Question 64: When verifying a patient's eligibility, the CBCS confirms the patient has both a primary and a secondary insurance plan. What critical step must be taken to ensure proper claim submission?

Verify the Coordination of Benefits (COB) to determine the correct billing order. (Correct answer)
Submit the claim to both insurance companies simultaneously.
Ask the patient which insurance they would prefer to use.
Bill only the primary insurance to simplify the process.

Correct answer: Verify the Coordination of Benefits (COB) to determine the correct billing order.

When a patient has multiple insurance plans, it is essential to determine the Coordination of Benefits (COB) to establish the correct order for billing. Billing the wrong payer first will lead to claim denials and payment delays.

Question 65: Which form is also known as the CMS-1450?

CMS-1500
UB-92
HCFA-1500
UB-04 (Correct answer)

Correct answer: UB-04

The UB-04 claim form, also known as the CMS-1450, is the standardized form used by institutional providers, such as hospitals, to bill for inpatient and outpatient services. It is distinct from the CMS-1500, which is used by professional providers. The UB-04 captures comprehensive information about facility charges and patient demographics.

Question 66: A patient calls requesting a copy of their medical records. Under HIPAA, the covered entity must provide access within:

30 calendar days (with a possible 30-day extension) (Correct answer)
10 business days
60 calendar days
7 calendar days

Correct answer: 30 calendar days (with a possible 30-day extension)

Under HIPAA's Privacy Rule, covered entities must act on a request for access to PHI within 30 calendar days, with one possible 30-day extension if the entity provides written notice.

Question 67: What is upcoding in medical billing?

Using outdated codes from a previous year's code set
Coding a service that was never performed
Combining multiple codes into a single bundled code
Assigning a higher-level code than documented to receive greater reimbursement (Correct answer)

Correct answer: Assigning a higher-level code than documented to receive greater reimbursement

Upcoding is a fraudulent practice where a provider bills for a higher-level service than what was actually documented or performed, resulting in inflated reimbursement.

Question 68: In ICD-10-CM, which POA indicator is assigned when the condition could not be determined as present on admission or not?

N (No)
Y (Yes)
W (Clinically undetermined)
U (Unknown) (Correct answer)

Correct answer: U (Unknown)

POA indicator 'U' is used when documentation is insufficient to determine if a condition was present at the time of admission.

Question 69: What is the VA Community Care Program and how does it affect billing?

A program allowing eligible veterans to receive care from non-VA providers in their community when VA services are inaccessible or unavailable, billed to the VA or its contractors (Correct answer)
A program where the VA provides care to non-veteran community members in rural areas
A VA-administered Medicaid supplemental plan for low-income veterans
A volunteer program where community physicians donate care to veterans

Correct answer: A program allowing eligible veterans to receive care from non-VA providers in their community when VA services are inaccessible or unavailable, billed to the VA or its contractors

VA Community Care allows eligible veterans to seek care from non-VA community providers when VA care is unavailable, inaccessible, or not in the best interest of the veteran. Providers bill the VA or its contracted administrators (Optum/TriWest).

Question 70: What is revenue integrity in healthcare?

The process of protecting the healthcare organization from cybersecurity threats to billing systems
Maximizing reimbursement by identifying all possible billable services regardless of documentation
Ensuring that all revenue is deposited into accounts with high interest rates
A comprehensive approach to ensuring that all healthcare services are accurately captured, coded, billed, and collected in compliance with regulations and payer requirements (Correct answer)

Correct answer: A comprehensive approach to ensuring that all healthcare services are accurately captured, coded, billed, and collected in compliance with regulations and payer requirements

Revenue integrity encompasses all processes that ensure complete and accurate charge capture, coding, billing, and collection — balancing revenue optimization with regulatory compliance and ethical standards.

Question 71: Which federal law mandated the adoption of electronic health records by eligible healthcare professionals?

HITECH Act (Correct answer)
ARRA only
HIPAA
ACA

Correct answer: HITECH Act

The Health Information Technology for Economic and Clinical Health (HITECH) Act mandated EHR adoption and incentivized meaningful use.

Question 72: What is the purpose of an Advance Beneficiary Notice (ABN) in Medicare billing?

To inform a Medicare beneficiary that a service may not be covered by Medicare so they can decide whether to receive the service and accept financial responsibility (Correct answer)
To document that a Medicare beneficiary has chosen a specific Medicare Advantage plan
To notify Medicare before a beneficiary is admitted to a hospital
To authorize a Medicare beneficiary to appeal a denial on their own behalf

Correct answer: To inform a Medicare beneficiary that a service may not be covered by Medicare so they can decide whether to receive the service and accept financial responsibility

An ABN is a written notice given to a Medicare beneficiary before a service is provided when the provider believes Medicare may not cover the service, allowing the patient to make an informed financial decision.

Question 73: What is patient financial counseling in the revenue cycle?

The process of informing patients of their financial responsibility, payment options, and available assistance programs before and after services are rendered (Correct answer)
Advising patients on how to invest their healthcare savings
Collecting all outstanding balances from patients at the time of service
Negotiating with insurance companies on behalf of patients

Correct answer: The process of informing patients of their financial responsibility, payment options, and available assistance programs before and after services are rendered

Patient financial counseling helps patients understand their insurance benefits, out-of-pocket costs, and available payment assistance options, improving collections and patient satisfaction while reducing bad debt.

Question 74: What is the primary purpose of prior authorization in healthcare?

To verify that a proposed service meets the payer's criteria for medical necessity before it is performed (Correct answer)
To ensure the provider is credentialed with the payer
To allow patients to self-refer to specialists
To notify the patient of their financial responsibility

Correct answer: To verify that a proposed service meets the payer's criteria for medical necessity before it is performed

Prior authorization confirms that a payer agrees the service is medically necessary before it is performed, reducing denial risk.

Question 75: What is a charge master (CDM) and how does it relate to billing?

A master list of all credentialed providers in a health system and their billing rates
A database of all payer contracts and their reimbursement rates
A comprehensive list of all services, procedures, supplies, and their associated charges used by a facility to generate patient bills and insurance claims (Correct answer)
A master schedule for all billing staff work assignments

Correct answer: A comprehensive list of all services, procedures, supplies, and their associated charges used by a facility to generate patient bills and insurance claims

The charge master (CDM) is a healthcare facility's comprehensive price list containing every billable item (services, procedures, supplies, drugs) with associated CDM codes, revenue codes, CPT/HCPCS codes, and charge amounts.

Question 76: A physician's office needs to bill for a routine patient check-up provided in their clinic. Which standard claim form should be used to submit this professional service to the insurance payer?

ABN (Advanced Beneficiary Notice)
UB-04
CMS-1490S
CMS-1500 (Correct answer)

Correct answer: CMS-1500

The CMS-1500 is the standard claim form used by non-institutional providers, such as physicians in an office setting, to bill for professional services. The UB-04 is used for institutional claims, like those from hospitals or skilled nursing facilities. An ABN is a notice given to a Medicare beneficiary, not a claim form, and the CMS-1490S is a form a patient can use to request Medicare payment.

Question 77: Which ICD-10-CM code set is used for neoplasm coding?

Codes from the V-code section
Codes from Chapter 19 only
Codes from Chapter 2 (C00–D49) (Correct answer)
Codes from Chapter 18 only

Correct answer: Codes from Chapter 2 (C00–D49)

Neoplasm codes are found in Chapter 2 of ICD-10-CM, ranging from C00 to D49.

Question 78: What does the prefix 'brady-' mean in medical terminology?

Small
Slow (Correct answer)
Fast
Large

Correct answer: Slow

The prefix 'brady-' means slow, as in bradycardia (slow heart rate).

Question 79: What is the purpose of a write-off analysis in the revenue cycle?

To identify which physicians are writing off the most charges
To review and categorize adjustments and write-offs to ensure they are appropriate, authorized, and not masking underpayments or improper billing patterns (Correct answer)
To calculate the practice's annual tax deductions for charitable care
To determine which patient accounts should be sent to collections

Correct answer: To review and categorize adjustments and write-offs to ensure they are appropriate, authorized, and not masking underpayments or improper billing patterns

Write-off analysis examines adjustments to ensure contractual write-offs match payer contracts (detecting underpayments), non-contractual write-offs are authorized, and patterns don't indicate fraud or billing errors.

Question 80: What is a prospective payment system (PPS)?

A reimbursement structure based on the number of patients seen per day
A reimbursement method where predetermined fixed payments are made for services based on diagnosis or procedure categories (Correct answer)
A system that pays providers a flat monthly fee per patient regardless of services
A system where providers are paid retrospectively based on actual costs incurred

Correct answer: A reimbursement method where predetermined fixed payments are made for services based on diagnosis or procedure categories

Under a prospective payment system, payment amounts are predetermined based on the patient's diagnosis or procedure category, encouraging efficiency and cost control.

Question 81: Medicare uses which system to pay physicians for their professional services?

Ambulatory Payment Classifications (APCs)
DRG-based prospective payment
Medicare Physician Fee Schedule (MPFS)
Resource-Based Relative Value Scale (RBRVS) via MPFS (Correct answer)

Correct answer: Resource-Based Relative Value Scale (RBRVS) via MPFS

Medicare pays physicians based on the Resource-Based Relative Value Scale (RBRVS), implemented through the Medicare Physician Fee Schedule.

Question 82: Which of the following best describes the concept of 'minimum necessary' under HIPAA?

Patients must provide only the minimum required consent for treatment
Covered entities must use or disclose only the minimum amount of PHI needed to accomplish the intended purpose (Correct answer)
Healthcare providers must collect the least amount of patient information possible at registration
Insurance companies must pay at least the minimum required reimbursement

Correct answer: Covered entities must use or disclose only the minimum amount of PHI needed to accomplish the intended purpose

The minimum necessary standard requires covered entities to make reasonable efforts to limit PHI use and disclosure to what is necessary to accomplish the intended purpose.

Question 83: When multiple burns are coded, how should they be sequenced?

Sequence the largest surface area burn first
Sequence burns in the order they were treated
Sequence the most severe (highest degree) burn first (Correct answer)
Sequence by body site in anatomical order

Correct answer: Sequence the most severe (highest degree) burn first

ICD-10-CM guidelines require the highest degree burn to be sequenced first when multiple burns are present.

Question 84: Which registration form obtains the patient's permission for treatment and acknowledges their financial responsibility?

ABN
Assignment of benefits
Patient consent and financial responsibility form (Correct answer)
HIPAA Privacy Notice

Correct answer: Patient consent and financial responsibility form

The patient consent and financial responsibility form obtains consent for treatment and informs the patient they are responsible for any unpaid balances.

Question 85: What is a peer-to-peer review in the context of insurance denials?

An audit where multiple billers review each other's work for quality
A review of a coder's work by a fellow credentialed coder
A review process where two insurance companies assess the same claim
A physician-to-physician discussion between the treating provider and the payer's medical reviewer to discuss a denied or potentially denied service (Correct answer)

Correct answer: A physician-to-physician discussion between the treating provider and the payer's medical reviewer to discuss a denied or potentially denied service

A peer-to-peer review involves direct physician communication between the treating provider and the insurance company's medical director to discuss medical necessity for a denied or precertification decision.

Question 86: Which of the following is true about authorizations for durable medical equipment (DME)?

Medicare requires prior authorization for certain high-cost DME items (Correct answer)
DME never requires prior authorization
DME purchases never have quantity limits
DME authorization is only required for Medicaid patients

Correct answer: Medicare requires prior authorization for certain high-cost DME items

Medicare has a Prior Authorization Program for certain high-cost or frequently abused DME items to prevent unnecessary utilization.

Question 87: What is a self-funded (self-insured) employer health plan?

A small employer that qualifies for a government subsidy to fund health benefits
An employer that provides health benefits funded entirely by employee payroll deductions
An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA (Correct answer)
An employer that purchases a standard insurance policy from an insurer

Correct answer: An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA

In a self-funded plan, the employer directly pays employee health claims from its own funds rather than buying insurance. A Third-Party Administrator (TPA) typically processes claims using the employer's money.

Question 88: What is the purpose of the National Correct Coding Initiative (NCCI) edits?

To validate that diagnosis codes match the procedure codes billed
To check patient eligibility before claim submission
To prevent improper payment of CPT code combinations that should not be billed together on the same date of service (Correct answer)
To identify upcoded E/M services in physician billing

Correct answer: To prevent improper payment of CPT code combinations that should not be billed together on the same date of service

NCCI edits consist of code pair edits and medically unlikely edits (MUEs) that CMS uses to prevent inappropriate payment of bundled code combinations or unlikely units of service.

Question 89: What does 'out-of-pocket maximum' mean on a health insurance plan?

The cap on total costs a patient pays in a year, after which the insurer covers 100% (Correct answer)
The maximum number of visits covered
The highest premium the patient will pay
The maximum amount the insurer will pay

Correct answer: The cap on total costs a patient pays in a year, after which the insurer covers 100%

The out-of-pocket maximum is the annual cap on a patient's cost-sharing; once reached, the insurer pays 100% of covered services for the rest of the year.

Question 90: During a review of the practice's finances, a CBCS is tasked with analyzing the Accounts Receivable Aging Report. The report shows a significant balance in the '120+ days' category. What does this indicate for the revenue cycle?

Front-end registration errors have been eliminated.
There is a problem with collecting payments in a timely manner. (Correct answer)
The practice is collecting payments from patients too quickly.
The charge capture process is highly efficient.

Correct answer: There is a problem with collecting payments in a timely manner.

The A/R aging report categorizes outstanding balances by the length of time they have been unpaid. A large balance in the '120+ days' bucket indicates that many claims are significantly overdue, highlighting inefficiencies and problems in the A/R follow-up and collections process which negatively impact cash flow.

Question 91: What is 'step therapy' and why is it relevant to prior authorization?

The process of stepping up insurance coverage levels
A physical therapy progression protocol
A treatment protocol requiring patients to try less costly or less intensive treatments before a more expensive one is approved (Correct answer)
A billing method for phased treatment plans

Correct answer: A treatment protocol requiring patients to try less costly or less intensive treatments before a more expensive one is approved

Step therapy (fail-first) requires patients to try and fail on first-line or less expensive treatments before a payer will authorize a more expensive option.

Question 92: What is Workers' Compensation insurance, and how does billing differ from standard health insurance?

Insurance for employers to cover their liability if an employee injures a patient
Insurance that employees purchase themselves to cover job-related injuries
Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury (Correct answer)
A federal insurance program for all injury-related medical care

Correct answer: Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury

Workers' compensation covers medical care and lost wages for work-related injuries/illnesses. Claims are billed to the employer's WC carrier using state-specific forms, focus only on the work injury, and follow different reimbursement rules than standard health insurance.

Question 93: What does HL7 FHIR stand for in health IT?

Health Level 7 Federal Interoperability Requirements
Health Level 7 Fast Interoperability Resources
Health Level 7 Fast Healthcare Interoperability Resources (Correct answer)
Health Linking 7 Federal Health Integration Records

Correct answer: Health Level 7 Fast Healthcare Interoperability Resources

FHIR stands for Fast Healthcare Interoperability Resources, a standard for exchanging healthcare information electronically.

Question 94: What is the primary purpose of the HIPAA Security Rule?

To set standards for patient consent in clinical research
To protect paper health records from physical damage
To regulate the transfer of health records between states
To establish safeguards for electronic protected health information (ePHI) (Correct answer)

Correct answer: To establish safeguards for electronic protected health information (ePHI)

The HIPAA Security Rule establishes national standards to protect electronic PHI (ePHI) through administrative, physical, and technical safeguards.

Question 95: What is a National Coverage Determination (NCD)?

A determination made by a provider as to whether a service is medically necessary
A state-level insurance mandate requiring coverage of specific conditions
A CMS policy determining whether a service, item, or procedure is covered nationally under Medicare, binding on all MACs and Medicare Advantage plans (Correct answer)
A coverage decision made by a commercial insurer for its subscriber population

Correct answer: A CMS policy determining whether a service, item, or procedure is covered nationally under Medicare, binding on all MACs and Medicare Advantage plans

An NCD is a national Medicare coverage policy issued by CMS that determines whether a specific medical service is covered, covered with conditions, or non-covered for all Medicare beneficiaries nationwide.

Question 96: What is a National Provider Identifier (NPI)?

A CMS-assigned billing number used only for Medicare claims
A number assigned to each health plan by the federal government
A state-issued license number for healthcare providers
A unique 10-digit identifier assigned to healthcare providers under HIPAA (Correct answer)

Correct answer: A unique 10-digit identifier assigned to healthcare providers under HIPAA

The NPI is a unique 10-digit number required by HIPAA to identify covered healthcare providers in standard transactions.

Question 97: Which of the following is the BEST practice for collecting patient co-payments?

Waive the copay for all established patients
Only collect if the insurance requests it
Bill the patient after the visit only
Collect at the time of service before or after the appointment (Correct answer)

Correct answer: Collect at the time of service before or after the appointment

Best practice and most payer contracts require collection of co-payments at the time of service to reduce accounts receivable and write-offs.

Question 98: What does the term 'accounts receivable (AR)' represent in medical billing?

The total charges generated in a billing period
Money owed to the practice for services rendered but not yet paid (Correct answer)
Amounts owed to vendors by the practice
Money the practice has already collected

Correct answer: Money owed to the practice for services rendered but not yet paid

Accounts receivable (AR) represents the total amount owed to a healthcare provider for services already rendered but not yet paid by payers or patients.

Question 99: What is a 'peer-to-peer review' in the context of prior authorization?

A review of a patient's records by two different physicians simultaneously
A second opinion requested by the insurance company
A direct conversation between the treating physician and the payer's medical reviewer to discuss a denied authorization (Correct answer)
A quality review of a physician's practice conducted by another physician

Correct answer: A direct conversation between the treating physician and the payer's medical reviewer to discuss a denied authorization

A peer-to-peer review is a conversation between the treating physician and the payer's medical director to advocate for an authorization that has been denied.

Question 100: What is a secondary claim in medical billing?

A corrected claim replacing a previously submitted claim
A claim for a secondary diagnosis unrelated to the primary reason for the visit
A claim submitted after the primary insurer has processed and paid their portion, sent to the secondary insurer to cover remaining balances (Correct answer)
A duplicate claim submitted for the same service

Correct answer: A claim submitted after the primary insurer has processed and paid their portion, sent to the secondary insurer to cover remaining balances

A secondary claim is submitted to a patient's secondary insurance after the primary insurer has adjudicated the claim. It includes the primary insurance's payment information so the secondary can determine how much they owe.

Question 101: What is the ICD-10-CM code for a patient presenting with essential (primary) hypertension?

I15.0
I12.9
I10 (Correct answer)
I11.0

Correct answer: I10

I10 is the ICD-10-CM code for essential (primary) hypertension.

Question 102: A billing specialist receives an explanation of benefits (EOB) with a denial code CO-16. This indicates the 'Claim/service lacks information which is needed for adjudication.' The data on the submitted claim form itself appears to be complete. Which of the following is the MOST likely reason for this denial?

The claim was submitted after the payer's timely filing limit.
The service was performed on a date the patient's policy was not active.
The payer required supporting documentation, like a prior authorization number or medical records, which was not sent with the claim. (Correct answer)
The diagnosis code does not support medical necessity for the procedure.

Correct answer: The payer required supporting documentation, like a prior authorization number or medical records, which was not sent with the claim.

Denial code CO-16 signifies that the claim is missing information needed to process it. While this can mean missing data on the form, it often indicates that required attachments or supporting documents, such as a certificate of medical necessity, prior authorization details, or relevant clinical notes, were not included with the submission.

Question 103: Which federal law requires providers to give patients a Good Faith Estimate of expected costs before scheduled services?

HIPAA
No Surprises Act (Correct answer)
False Claims Act
Stark Law

Correct answer: No Surprises Act

The No Surprises Act requires providers to give uninsured or self-pay patients a Good Faith Estimate of expected costs before scheduled services.

Question 104: What is a Medicare Administrative Contractor (MAC)?

A Medicare-approved company that provides managed care plans
A contractor that audits Medicare Advantage organizations
A private company that designs Medicare benefit plans
A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction (Correct answer)

Correct answer: A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction

MACs are private companies that serve as Medicare's claim processors in specific geographic regions (jurisdictions), handling Part A and Part B claims submission, payment, and audit functions.

Question 105: In ICD-10-PCS, what does the 'approach' character in a code represent?

The device left in place after the procedure
The body system being treated
The type of anesthesia used during the procedure
The technique used to reach the procedure site (Correct answer)

Correct answer: The technique used to reach the procedure site

The 'approach' character in ICD-10-PCS describes the technique used to reach the procedure site (e.g., open, percutaneous, endoscopic).

Question 106: What is a co-payment in health insurance?

The percentage the patient owes after the deductible
A fixed dollar amount paid by the patient at the time of service (Correct answer)
The maximum out-of-pocket annual cost
The annual amount a patient must pay before insurance activates

Correct answer: A fixed dollar amount paid by the patient at the time of service

A co-payment (copay) is a fixed amount (e.g., $25) the patient pays at the time of each service visit, separate from the deductible.

Question 107: What is a Business Associate Agreement (BAA) under HIPAA?

A written contract between a covered entity and a business associate that specifies permitted uses of PHI and requires the business associate to protect PHI (Correct answer)
A consent form signed by patients authorizing their information to be shared with third parties
An agreement between two competing healthcare providers not to share patient information
A contract between an insurance company and a healthcare provider specifying reimbursement rates

Correct answer: A written contract between a covered entity and a business associate that specifies permitted uses of PHI and requires the business associate to protect PHI

A BAA is a legally required contract between a covered entity and any business associate who may access, use, or disclose PHI in the course of performing services. It specifies permitted uses and requires appropriate safeguards.

Question 108: In CPT E/M coding for office visits (2021 guidelines), what two components determine the level of service?

Chief complaint and history
Number of diagnoses and data reviewed
History and physical exam
Medical decision making and time (Correct answer)

Correct answer: Medical decision making and time

Under 2021 revised guidelines, office/outpatient E/M levels are based on medical decision making (MDM) or total time.

Question 109: A patient's insurance card shows a group number and member ID. What is the group number used for?

Determining the patient's deductible amount
Identifying the individual patient
Identifying the employer-sponsored plan (Correct answer)
Authorizing a referral

Correct answer: Identifying the employer-sponsored plan

The group number identifies the employer or group plan sponsor under which the patient's coverage is provided, while the member ID identifies the individual.

Question 110: What is the net collection rate and how is it calculated?

Payments received divided by the total number of claims submitted
Total charges divided by total collections over 12 months
Total payments received divided by total charges billed
Payments collected divided by net collectible revenue (total charges minus contractual adjustments), expressed as a percentage; the most accurate measure of billing effectiveness (Correct answer)

Correct answer: Payments collected divided by net collectible revenue (total charges minus contractual adjustments), expressed as a percentage; the most accurate measure of billing effectiveness

Net collection rate = (Payments / (Charges - Contractual Adjustments)) × 100. It measures what percentage of collectible revenue was actually collected, excluding amounts that were never owed due to contracts.

Question 111: What is a Personal Health Record (PHR) compared to an EHR?

A PHR is used only in hospitals; an EHR is used in clinics
A PHR is controlled by the patient; an EHR is controlled by the provider (Correct answer)
A PHR is required by law; an EHR is optional
A PHR is only accessible by the patient's insurer

Correct answer: A PHR is controlled by the patient; an EHR is controlled by the provider

A PHR is a health record that the patient manages and controls, while an EHR is maintained and controlled by the healthcare provider.

Question 112: What is a Certificate of Creditable Coverage and why is it relevant to billing?

A document from a prior health plan confirming the length of previous creditable coverage, which can reduce pre-existing condition waiting periods under some plans (Correct answer)
A certification that a claim has been reviewed and approved by the insurer
A document required when billing for experimental or investigational procedures
A document certifying that a provider is credentialed with an insurance network

Correct answer: A document from a prior health plan confirming the length of previous creditable coverage, which can reduce pre-existing condition waiting periods under some plans

A Certificate of Creditable Coverage documents a patient's prior continuous health insurance coverage. Under pre-ACA rules, it could reduce waiting periods for pre-existing condition exclusions under new employer group plans.

Question 113: What constitutes Protected Health Information (PHI) under HIPAA?

Individually identifiable health information in any form (electronic, paper, oral) held or transmitted by a covered entity or business associate (Correct answer)
Only information relating to diagnoses and treatment plans
Health information that a patient has specifically requested be kept private
Only information stored in electronic medical records

Correct answer: Individually identifiable health information in any form (electronic, paper, oral) held or transmitted by a covered entity or business associate

PHI is any individually identifiable health information in any format (electronic, paper, verbal) that relates to a person's past, present, or future physical or mental health condition, provision of healthcare, or payment for healthcare.

Question 114: What is a 'birthday rule' in insurance coordination of benefits?

The rule that terminates dependent coverage at age 26
The rule that determines which parent's plan is primary for a dependent child, based on whose birthday falls earlier in the calendar year (Correct answer)
The Medicare eligibility rule triggered at age 65
The rule requiring annual plan re-enrollment on the beneficiary's birthday

Correct answer: The rule that determines which parent's plan is primary for a dependent child, based on whose birthday falls earlier in the calendar year

The birthday rule is used when a dependent child is covered under both parents' plans. The plan of the parent whose birthday falls earliest in the calendar year (month and day, not year) is primary.

Question 115: What are the four HIPAA Administrative Simplification standards?

Transactions and Code Sets, Privacy, Security, and National Identifier standards (Correct answer)
Covered Entities, Business Associates, PHI Protection, and Audit Controls
Privacy, Security, Electronic Claims, and Patient Rights
Privacy, Security, Enforcement, and Breach Notification

Correct answer: Transactions and Code Sets, Privacy, Security, and National Identifier standards

HIPAA's Administrative Simplification provisions include: (1) Transactions and Code Sets, (2) Privacy Rule, (3) Security Rule, and (4) National Identifier standards (NPI, employer identifier).

Question 116: What is an open enrollment period in the context of insurance coverage?

A designated time period when employees can enroll in, change, or cancel employer-sponsored health insurance coverage (Correct answer)
A period when insurance companies must accept new individual market applicants
The time period during which Medicare beneficiaries can appeal coverage denials
The period when new patients can enroll in a practice's patient panel

Correct answer: A designated time period when employees can enroll in, change, or cancel employer-sponsored health insurance coverage

Open enrollment is the annual window during which eligible individuals can select or change their health insurance plan. Outside of open enrollment, changes are generally only allowed for qualifying life events.

Question 117: What is an Independent Practice Association (IPA) model HMO?

A group of physicians who collectively own their own insurance plan
An HMO that employs all its physicians directly in a staff model
An HMO model where independent physicians in private practice contract with the IPA to provide services to HMO enrollees on a capitated or discounted fee basis (Correct answer)
A Medicare Advantage plan administered by a group of academic medical centers

Correct answer: An HMO model where independent physicians in private practice contract with the IPA to provide services to HMO enrollees on a capitated or discounted fee basis

In the IPA model, independent physicians in private practice (not employed by the HMO) contract through an IPA to provide care to HMO members. Physicians maintain their private practices and see both HMO and non-HMO patients.

Question 118: What is the difference between a claim denial and a claim rejection in terms of next steps?

Denials require a new claim number; rejections use the original claim number
Denied claims require a formal appeal through the payer's process; rejected claims are corrected and resubmitted as a new claim (Correct answer)
There is no practical difference in next steps
Denials can only be handled by the provider; rejections can be handled by billing staff

Correct answer: Denied claims require a formal appeal through the payer's process; rejected claims are corrected and resubmitted as a new claim

A rejected claim was never processed — correct the errors and resubmit as a new claim. A denied claim was processed and requires a formal appeal through the payer's established appeals process.

Question 119: What is a 'participating provider' vs. 'non-participating provider' in insurance networks?

Participating providers have signed contracts with the insurance plan and accept negotiated rates; non-participating providers have no contract and may charge higher rates with different patient liability (Correct answer)
Participating providers always accept Medicare; non-participating providers do not accept any government insurance
There is no difference in billing requirements between participating and non-participating providers
Participating providers have more patients; non-participating providers see fewer patients

Correct answer: Participating providers have signed contracts with the insurance plan and accept negotiated rates; non-participating providers have no contract and may charge higher rates with different patient liability

Participating (in-network) providers have contracts with the insurance plan and agree to accept the negotiated allowed amount. Non-participating (out-of-network) providers have no contract, and patients typically face higher out-of-pocket costs.

Question 120: A CBCS is verifying benefits for a specific surgical procedure. Beyond confirming the policy is active, which piece of information is crucial to obtain?

Whether pre-authorization is required for the procedure. (Correct answer)
The patient's complete medical history.
The name of the insurance agent who sold the policy.
The patient's preferred pharmacy.

Correct answer: Whether pre-authorization is required for the procedure.

A complete eligibility check includes verifying whether a prior authorization or referral is required for the specific service. Failing to secure a necessary pre-authorization is a common reason for claim denials, making this a critical step in the verification process.

CBCS — Certified Billing and Coding Specialist

The NHA CBCS exam certifies medical billing and coding specialists in claims processing, regulatory compliance, CPT/ICD-10-CM coding, reimbursement, and revenue cycle management.

120

Questions

180 min

Time Limit

78%

To Pass

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