Financial Management and Accounts Receivable Flashcards

A patient's insurance EOB shows a 'contractual adjustment' of $150. What does this mean?

Answer: The provider must write off $150 due to the payer contract

A contractual adjustment is the amount the provider agrees to write off as part of their contract with the insurance company.

Which aging bucket indicates the most urgent collection priority?

Answer: Over 120 days

Accounts over 120 days are the most difficult to collect and represent the highest risk of bad debt, requiring urgent action.

A patient asks to pay their $600 balance in monthly installments of $100. What document should the medical office use?

Answer: Payment plan agreement

A payment plan agreement formally documents the terms of the installment arrangement between the patient and the practice.

When posting a Medicare remittance, the CARC code PR-2 indicates:

Answer: The patient is responsible for the coinsurance amount

CARC PR-2 (Patient Responsibility – Coinsurance) indicates the balance is the patient's coinsurance obligation.

A practice's collection ratio is calculated as:

Answer: Total payments collected divided by total net charges

The collection ratio measures efficiency by dividing total collections by total net (after adjustments) charges, expressed as a percentage.

Which of the following is an example of a 'credit balance' on a patient account?

Answer: Insurance paid more than the amount billed

A credit balance occurs when a payment exceeds the amount owed, such as when insurance overpays, and may require a refund.

Under HIPAA, protected health information (PHI) on a billing statement must be:

Answer: Limited to the minimum necessary for billing purposes

HIPAA's minimum necessary standard requires that only the PHI needed to accomplish the billing purpose be disclosed on financial documents.