M04 Medical Billing and Reimbursement Systems

Local Coverage Determination (LCD)

decisions by MACs about the coding and medical necessity of a service notices sent to physicians with information about the coding and medical necessity of a service

In the managed care industry, there are specific reimbursement concepts, such as "capitation." All of the following statements are true in regard to the concept of "capitation," EXCEPT capitation means paying a fixed amount per member per month. capitation involves a group of physicians or an individual physician. each service is paid based on the actual charges. the volume of services and their expense do not affect reimbursement.

each service is paid based on the actual charges. CORRECT Capitation pays the primary care provider, also known as the gatekeeper, on a monthly basis, whether the patient is seen or not, and includes a predetermined list of services.

Use the following case scenario to answer the question. A patient with Medicare is seen in the physician's office. The total charge for this office visit is $250.00. The patient has previously paid his deductible under Medicare Part B. The PAR Medicare fee schedule amount for this service is $200.00. The non-PAR Medicare fee schedule amount for this service is $190.00. If this physician is a nonparticipating physician who does NOT accept assignment for this claim, the total amount the physician will receive is $200.00. $218.50. $190.00. $250.00.

$218.50. CORRECT If a physician is a nonparticipating physician who does not accept assignment, he can collect a maximum of 15% (the limiting charge) over the non-PAR Medicare Fee Schedule amount. In this case, the non-PAR Medicare Fee Schedule amount is $190.00 and 15% over this amount is $28.50; therefore, the total that he can collect is $218.50.

All of the following items are "packaged" under the Medicare ASC payments, EXCEPT for implanted prosthetic devices. splints and casts. brachytherapy. medical supplies.

brachytherapy. INCORRECT Brachytherapy is a procedure that involves placing radioactive material inside the patient's body. This would have its own procedure package.

hold harmless

An indemnity clause that provides that both parties agree to defend and/or compensate the other party for asserted claims against, or liability damages incurred by, the other party due to the acts or omissions of the first party.

HCPCS/ CPT codes

CMS developed medically unlikely edits (MUEs) to prevent providers from billing units of services greater than the norm would indicate. These MUEs were implemented on January 1, 2007, and are applied to which code set?

This information is published by the Medicare Administrative Contractors (MACs) to describe when and under what circumstances Medicare will cover a service. The ICD-10-CM, ICD-10-PCS, and CPT/HCPCS codes are listed in the memoranda. LCD (Local Coverage Determinations) PEPP (Payment Error Prevention Program) OSHA (Occupational Safety and Health Administration) SI/IS (Severity of Illness/Intensity of Service Criteria)

CORRECT *Local Coverage Determinations (LCDs)* were formerly called local medical review policies (LMRPs).

The process by which health care facilities and providers ensure their financial viability by increasing revenue, improving cash flow, and enhancing the patient's experience is called auditing. revenue cycle management. accounts receivable. patient orientation.

CORRECT *Revenue cycle management* is the process of ensuring the efficiency and effectiveness of all work involved in obtaining earned revenue.

The patient is financially liable for the coinsurance amount, which is 80%. 20%. 15%. 100%.

CORRECT After the deductible is satisfied, Medicare is an 80/20 co-insurance plan for Part B. Therefore, the patient is responsible for *20%.*

The term used to indicate that the service or procedure is reasonable and necessary for the diagnosis or treatment of illness or injury consistent with generally accepted standards of care is benchmarking. medical necessity. appropriateness. evidence-based medicine.

CORRECT Also known as *medically neccesary*, this is the justification of the legal and ethical standards for providing the service.

Under the APC methodology, discounted payments occur when there are two or more (multiple) procedures that are assigned to status indicator "S." pass-through drugs are assigned to status indicator "K." modifier -78 is used to indicate a procedure is terminated after the patient is prepared but before anesthesia is started. there are two or more (multiple) procedures that are assigned to status indicator "T."

CORRECT Discounts are applied to those multiple procedures identified by CPT codes with status indicator "T."

If this physician is a participating physician who accepts assignment for this claim, the total amount the physician will receive is $200.00. $218.50. $190.00. $250.00.

CORRECT If a physician is a participating physician who accepts assignment, he will receive the lesser of "the total charges" or "the PAR Medicare Fee Schedule amount." In this case, the Medicare Fee Schedule amount is less; therefore, the total received by the physician is *$200.00.*

LCDs and NCDs are review policies that describe the circumstances of coverage for various types of medical treatment. They advise physicians which services Medicare considers reasonable and necessary and may indicate the need for an advance beneficiary notice. They are developed by the Centers for Medicare and Medicaid Services (CMS) and Medicare Administrative Contractors. LCD and NCD are acronyms that stand for local coverage determinations and national coverage determinations. list of covered decisions and noncovered decisions. local contractor's decisions and national contractor's decisions. local covered determinations and noncovered determinations.

CORRECT LCD = Local Coverage Determinations NCD = National Coverage Determinations

This prospective payment system replaced the Medicare physician payment system of "customary, prevailing, and reasonable (CPR)" charges whereby physicians were reimbursed according to their historical record of the charge for the provision of each service. Capitation Global payment Medicare Severity-Diagnosis Related Groups (MS-DRGs) Medicare Physician Fee Schedule (MPFS)

CORRECT The *Medicare Physician Fee Schedule (MPFS)* reimburses providers according to predetermined rates assigned to services.

This is a 10-digit, intelligence-free, numeric identifier designed to replace all previous provider legacy numbers. This number identifies the physician universally to all payers. This number is issued to all HIPAA-covered entities. It is mandatory on the CMS-1500 and UB-04 claim forms. National Practitioner Data Bank (NPD) Master Patient Index (MPI) National Provider Identifier (NPI) Universal Physician Number (UPN)

CORRECT The *National Provider Identifier (NPI)* is assigned to each provider for tracking to third-party payers across state lines.

If the Medicare non-PAR approved payment amount is $128.00 for a proctoscopy, what is the total Medicare approved payment amount for a doctor who does not accept assignment, applying the limiting charge for this procedure? $192.00 $140.80 $147.20 $143.00

CORRECT The limiting charge is 15% above Medicare's approved payment amount for doctors who do NOT accept assignment ($128.00 X 1.15 = $147.20).

Case-mix index

Case-mix index : 1.278 Total CMS Relative Weights (12781.730) divided by (10,000) patients

When health care providers are found guilty under any of the civil false claims statutes, the Office of Inspector General is responsible for negotiating these settlements and the provider is placed under a Recovery Audit Contract. Corporate Integrity Agreement. Fraud Prevention Memorandum of Understanding. Noncompliance Agreement.

Corporate Integrity Agreement. INCORRECT The "guilty" determination is a statement of lack of integrity on the part of the provider.

CDT codes

Current Dental Terminology Codes: 5-digit codes used to submit insurance claims

To monitor timely claims processing in a hospital, a summary report of "patient receivables" is generated frequently. Aged receivables can negatively affect a facility's cash flow; therefore, to maintain the facility's fiscal integrity, the HIM manager must routinely analyze this report. Though this report has no standard title, it is often called the remittance advice. chargemaster. DNFB (discharged, not final billed). periodic interim payments.

DNFB (discharged, not final billed). CORRECT DNFB stands for "discharged, not final billed."

HIPAA administrative simplification provisions require all of the following code sets to be used EXCEPT CPT. ICD-10-CM. CDT. DSM.

DSM. INCORRECT The Diagnostic and Statistical Manual for mental disorders is not actually a code set and not required by HIPAA. CPT, CDT, and ICD-10-CM/PCS are used.

Interrupted stay

Discharge in which the patient was discharged from the inpatient rehabilitation facility and returned within three calendar days If a pt is admitted, then transferred, then comes back, facility gets paid only once as if pt has been there all along, not twice. Payment mechanism to discourage transfer of pt between facilities for $ reasons. Transfers to and from an acute care hospital, IP rehab or SNF.

The following type of hospital is considered excluded when it applies for, and receives, a waiver from CMS. This means that the hospital does not participate in the inpatient prospective payment system (IPPS). rehabilitation hospital cancer hospital long-term care hospital psychiatric hospital

cancer hospital INCORRECT Cancer hospitals can apply for and receive waivers from the Centers for Medicare and Medicaid Services (CMS) and are therefore excluded from the inpatient prospective payment system (MS-DRGs). Rehabilitation hospitals are reimbursed under the *Inpatient Rehabilitation Prospective Payment System (IRF PPS)*. Long-term care hospitals are reimbursed under the *Long-Term Care Hospital Prospective Payment System (LTCH PPS)*. Skilled nursing facilities are reimbursed under the *Skilled Nursing Facility Prospective Payment System (SNF PPS)*.

This process involves the gathering of charge documentation from all departments within the facility that have provided services to patients. The purpose is to make certain that all charges are entered into the billing system. charge capturing insurance verification revenue cycle precertification

charge capturing CORRECT The concept is to capture all of the billable, or chargeable, services, procedures, and treatments so that they can be included on a claim or bill.

This is the amount the facility actually bills for the services it provides. charges reimbursement costs contractual allowance

charges CORRECT This is the "sticker" price for the procedure or service.

Accounts receivable (A/R) refers to denials that have been returned to the hospital. claims for which money has not yet come in. claims for which money has been received. the amount the hospital was paid.

claims for which money has not yet come in. CORRECT *Accounts receivable* are funds that have been earned and billed for, yet not received.

Medicare Severity Diagnosis Related Groups

classification that is based on diagnoses, procedures, other demographic information & the presence of complications & comorbidities

Under APCs, payment status indicator "V" means clinic or emergency department visit (medical visits). inpatient procedure. significant procedure, not discounted when multiple. ancillary services.

clinic or emergency department visit (medical visits). INCORRECT Under the APC system, there exists a list of status indicators (also called service indicators, *payment status indicators*, or payment indicators). This indicator is provided for every HCPCS/CPT code and identifies how the service or procedure would be paid (if covered) by Medicare for hospital outpatient visits.

balance billing

collecting the difference between a provider's usual fee and a payer's lower allowed charge

This accounting method attributes a dollar figure to every input required to provide a service. contractual allowance charge accounting cost accounting reimbursement

cost accounting INCORRECT Like any other business, health care facilities must calculate their out-of-pocket costs for all services they provide.

The following coding system(s) is/are utilized in the Inpatient Psychiatric Facilities (IPFs) prospective payment methodology for assignment and proper reimbursement. ICD-10-CM/ICD-10-PCS codes both HCPCS/CPT codes and ICD-10-CM/ICD-10-PCS codes HCPCS/CPT codes revenue codes

ICD-10-CM/ICD-10-PCS codes INCORRECT Diagnoses, as reported by ICD-10-CM codes and inpatient procedures and services, as reported by ICD-10-PCS.

The following coding system(s) is/are utilized in the MS-DRG prospective payment methodology for assignment and proper reimbursement. both HCPCS/CPT codes and ICD-10-CM/ICD-10-PCS codes HCPCS/CPT codes ICD-10-CM/ICD-10-PCS codes NPI codes

ICD-10-CM/ICD-10-PCS codes INCORRECT Inpatient services are categorized by the Diagnosis codes (ICD-10-CM), as well as inpatient services provided (ICD-10-PCS), as well as other details.

The computer-to-computer transfer of data between providers and third-party payers in a data format agreed upon by both parties is called HIPAA (Health Insurance Portability and Accountability Act). health data exchange (HDE). health information exchange (HIE). electronic data interchange (EDI).

INCORRECT *Electronic data interchange (EDI)* is the network used to transmit transactions.

The prospective payment system used to reimburse hospitals for Medicare hospital outpatients is called APCs. APGs. MS-DRGs. RBRVS.

INCORRECT The "A" stands for Ambulatory, which is an alternative term for outpatient. *APCs* or "*Ambulatory Payment Classifications*" are the government's method of paying facilities for outpatient services for the Medicare program.

This data is used because it provides a uniform system of *identifying procedures, services, or supplies.* Multiple columns can be available for various financial classes. HCPCS/CPT code charge/service code general ledger key revenue code

INCORRECT The *HCPCS/CPT code* is HIPAA-approved as the code used to identify the procedure, service, or treatment.

These are assigned to every HCPCS/CPT code under the Medicare hospital *outpatient prospective payment system* to identify how the service or procedure described by the code would be paid. major diagnostic categories payment status indicator geographic practice cost indices minimum data set

INCORRECT The *payment status indicator* explains whether or not the item, procedure, or service will be paid, and if so, under OPPS or other systems.

This information is the numerical identification of the service or supply. Each item has a unique number with a prefix that indicates the department number (the number assigned to a specific ancillary department) and an item number (the number assigned by the accounting department or the business office) for a specific procedure or service represented on the chargemaster. revenue code charge/service code HCPCS code general ledger key

INCORRECT This number is used for internal process.

When a patient is discharged from the inpatient rehabilitation facility and returns within three calendar days (prior to midnight on the third day) this is called a(n) qualified discharge. interrupted stay. per diem. transfer.

INCORRECT When a patient is discharged from the inpatient rehabilitation facility and returns within three calendar days (prior to midnight on the third day), this is called an *interrupted stay*.

When appropriate, under the outpatient PPS, a hospital can use this CPT code in place of, but not in addition to, a code for a medical visit or *emergency department* service. CPT Code 99358 (prolonged evaluation and management service) CPT Code 99291 (critical care) CPT Code 50300 (donor nephrectomy) CPT Code 35001 (direct repair of aneurysm)

INCORRECT When a patient meets the definition of critical care, the hospital must use *CPT Code 99291* to bill for outpatient encounters in which critical care services are furnished. This code is used instead of another E&M code.

Medicare Abuse

Includes improper payments for items or services when there was no legal entitlement to that payment

Relative Value Unit (RVU)

Measures of value used in determining Medicare reimbursement formulas, including the difficulty level of the work involved, office overhead expenses, and malpractice risk for the given service or procedure.

____ is a joint federal and state program that provides health care coverage to low-income populations and certain aged and disabled individuals. Medicare Part B TRICARE Medicare Part A Medicaid

Medicaid CORRECT Medicaid—think medicAID—aid to low-income individuals.

MS-DRGs

Medicare Severity Diagnosis Related Groups

The prospective payment system used to reimburse *home health* agencies for patients with Medicare utilizes data from the UHDDS (Uniform Hospital Discharge Data Set). UACDS (Uniform Ambulatory Core Data Set). MDS (Minimum Data Set). OASIS (Outcome and Assessment Information Set).

OASIS (Outcome and Assessment Information Set). CORRECT The *HHPPS (Home Health Prospective Payment System)* uses a case-mix methodology to adjust payment rates based on characteristics of the patient and his or her corresponding resource needs (such as diagnosis, clinical factors, functional factors, and service needs). The 60-day episode rates are adjusted by case-mix methodology based on data elements from the *Outcome and Assessment Information Set (OASIS)*.

Stark Law

Prohibits physicians from making referrals to Medicare The Stark Law clearly requires that the referring physician has no financial benefit from sending a patient to another provider.

Medicare Fraud

Providing *false* information to claim medical reimbursements beyond the scope of payment for actual healthcare services rendered. Knowingly and willfully misrepresenting information for gain or obtaining Medicare benefits by *false pretenses*.

This initiative was instituted by the government to eliminate fraud and abuse and recover overpayments, and involves the use of ______________. Charts are audited to identify Medicare overpayments and underpayments. These entities are paid based on a percentage of money they identify and collect on behalf of the government. Recovery Audit Contractors (RAC) Medicare Code Editors (MCE) Clinical Data Abstraction Centers (CDAC) Quality Improvement Organizations (QIO)

Recovery Audit Contractors (RAC) CORRECT RAC stands for *Recovery Audit Contractors.* These companies are contracted to audit previously submitted claims with the expectation of recovering funds improperly paid by Medicare.

APC status indicator 'S' and 'T' procedures

Status indicator 'S' represents a significant procedure, and is not discounted when you report multiple CPT codes that group to APCs with multiple 'S' status indicators. Status indicator 'T' is also a significant procedure, but multiple procedure reduction applies.

Capitation

System of payment used by managed care plans in which physicians and hospitals are paid a fixed, per capita amount for each patient enrolled over a stated period regardless of the type and number of services provided; reimbursement to the hospital on a per-member/per-month basis to cover costs for the members of the plan.

grouper

The "grouper" is the software that groups all of the components factored into a DRG: principal diagnosis, secondary diagnoses, age, and the like to determine the appropriate DRG. A computer software program that assigns appropriate MS-DRGs according to the information provided for each episode of care is called a(n)

DNFB

The DNFB report includes all patients who have been discharged from the facility but for whom, for one reason or another, the billing process is not complete. DNFB is an acronym for _____________. DNFB = discharged no final bill.

Medicare Summary Notice (MSN)

The Medicare Summary Notice functions as the explanation of benefits to Medicare benficiaries(patients).

write off

a balance that has been removed from a patient's account

All of the following statements are true of MS-DRGs, EXCEPT there are several types of hospitals that are excluded from the Medicare inpatient PPS. a patient claim may have multiple MS-DRGs. special circumstances can result in a cost outlier payment to the hospital. the MS-DRG payment received by the hospital may be lower than the actual cost of providing the services.

a patient claim may have multiple MS-DRGs. CORRECT Only *one MS-DRG is assigned per inpatient hospitalization*.

When the MS-DRG payment received by the hospital is lower than the actual charges for providing the inpatient services for a patient with Medicare, then the hospital makes a profit. can bill Medicare for the difference. absorbs the loss. can bill the patient for the difference.

absorbs the loss. CORRECT This is commonly known as a write-off.

When a provider, knowingly or unknowingly, uses practices that are *inconsistent* with accepted medical practice and that directly or indirectly result in *unnecessary costs* to the Medicare program, this is called hypercoding. unbundling. fraud. abuse.

abuse. INCORRECT It is important that you understand the difference between "abuse" and "fraud."

A Medicare patient was seen by Dr. Zachary, who is a nonparticipating physician. The charge for the office visit was $125. The Medicare beneficiary had already met his deductible. The Medicare Fee Schedule amount is $100. Dr. Zachary does not accept assignment. The office manager will apply a practice termed as "balance billing," which means that the patient is not financially liable for any amount. financially liable for the Medicare Fee Schedule amount. financially liable for charges in excess of the Medicare Fee Schedule, up to a limit. financially liable for only the deductible.

financially liable for charges in excess of the Medicare Fee Schedule, up to a limit. CORRECT The NON-PAR physician's charge is $125, and Medicare's allotted charge is $100. Subtract: $125 minus $100 = a balance of $25.00 Balance billing is requiring the patient to pay the balance.

CMS adjusts the Medicare Severity DRGs and the reimbursement rates every calendar year beginning January 1. fiscal year beginning October 1. quarter. month.

fiscal year beginning October 1. CORRECT CMS' fiscal year runs from October 1 to September 30.

In calculating the fee for a physician's reimbursement, the three relative value units are each multiplied by the usual and customary fees for the service. geographic practice cost indices. national conversion factor. cost of living index for the particular region.

geographic practice cost indices. CORRECT The three relative value units are *physician work, practice expense, and malpractice expense.* These are adjusted by multiplying them by the *geographical practice cost indices.* Then, this total is multiplied by the *national conversion factor.*

These are financial protections to ensure that certain types of facilities (e.g., children's hospitals) recoup all of their losses due to the differences in their APC payments and the pre-APC payments. pass through limiting charge indemnity insurance hold harmless

hold harmless INCORRECT These hospitals are assured that the loss will not harm their ability to provide services. Therefore, the differences in the payment structures are harmless to them.

What prospective payment system reimburses the provider according to determined rates for a 60-day episode of care? long-term care Medicare severity diagnosis-related groups home health resource groups the skilled nursing facility prospective payment system inpatient rehabilitation facility

home health resource groups INCORRECT HHRGs reimburse for covered home care services, provided to Medicare beneficiaries, during a 60-day episode of care.

Under APCs, the payment status indicator "N" means that the payment is for a clinic or an emergency visit. is for ancillary services. is packaged into the payment for other services. is discounted at 50%.

is packaged into the payment for other services. CORRECT Payment indicator "N" is described as "No additional payment, payment included in line items with APCs for incidental service."

This information provides a *narrative name of the services* provided. This information should be presented in a clear and concise manner. When possible, the narratives from the HCPCS/CPT book should be utilized. general ledger key revenue code item/service description HCPCS

item/service description CORRECT Having both the narrative and the code enable an easier way to audit to ensure accuracy.

Under Medicare, a beneficiary has lifetime reserve days. All of the following statements are true, EXCEPT lifetime reserve days are paid under Medicare Part B. lifetime reserve days are not renewable, meaning once a patient uses all of their lifetime reserve days, the patient is responsible for the total charges. the patient has a total of 60 lifetime reserve days. lifetime reserve days are usually reserved for use during the patient's final (terminal) hospital stay.

lifetime reserve days are paid under Medicare Part B. CORRECT Lifetime reserve days are applicable for hospital inpatient stays that are payable under Medicare Part A, not Medicare Part B.

Under Medicare Part B, all of the following statements are true and are applicable to nonparticipating physician providers, EXCEPT providers must file all Medicare claims. fees are restricted to charging no more than the "limiting charge" on nonassigned claims. collections are restricted to only the deductible and coinsurance due at the time of service on an assigned claim. nonparticipating providers have a higher fee schedule than that for participating providers.

nonparticipating providers have a higher fee schedule than that for participating providers. CORRECT Under Medicare Part B, Congress has mandated special incentives to increase the number of health care providers signing PAR (participating) agreements with Medicare. One of those incentives includes a 5% higher fee schedule for PAR providers than for non-PAR (nonparticipating) providers.

In a global payment methodology, which is sometimes applied to radiological and similar types of procedures that involve professional and technical components, all of the following are part of the "technical" components EXCEPT radiologic technicians. radiological supplies. radiological equipment. physician's services.

physician's services. INCORRECT The physician's services are the professional component.

revenue cycle management (RCM)

process of making sure sufficient monies flow into the practice to pay the practice's bills managing the activities associated with a patient encounter to ensure that the provider receives full payment for services

brachytherapy

radiation therapy in which the source of radiation is implanted in the tissue to be treated

Under APCs, payment status indicator "T" means significant procedure, multiple procedure reduction applies. clinic or emergency department visit (medical visits). ancillary services. significant procedure, not discounted when multiple.

significant procedure, multiple procedure reduction applies. CORRECT Under the APC system, there exists a list of status indicators (also called service indicators, payment status indicators, or payment indicators). This indicator is provided for every HCPCS/CPT code and identifies how the service or procedure would be paid (if covered) by Medicare for hospital outpatient visits. Payment Status Indicator (PSI) "T" means that if a patient has more than one CPT code with this PSI, the procedure with the highest weight will be paid at 100% and all others will be reduced or discounted and paid at 50%.

Under APCs, payment status indicator "S" means significant procedure, multiple procedure reduction applies. significant procedure, multiple procedure reduction does not apply. ancillary services. clinic or emergency department visit (medical visits).

significant procedure, multiple procedure reduction does not apply. INCORRECT Under the APC system, there exists a list of *status indicators* (also called service indicators, payment status indicators, or payment indicators). This indicator is provided for every HCPCS/CPT code and identifies how the service or procedure would be paid (if covered) by Medicare for hospital outpatient visits. *Payment Status Indicator (PSI)* "S" means that if a patient has more than one CPT code with this PSI, none of the procedures will be discounted or reduced. They will all be paid at 100%.

The prospective payment system based on resource utilization groups (RUGs) is used for reimbursement to ____________________ for patients with Medicare. intermediate care facilities hospital-based outpatients freestanding ambulatory surgery centers skilled nursing facilities

skilled nursing facilities CORRECT The Skilled Nursing Facility Prospective Payment System uses a relative resource intensity measure that would typically be associated with each patient's clinical condition as identified through the resident assessment process. This data is collected using a patient classification system of Resource Utilization Groups (RUGs).

Case Mix Index (CMI)

sum of DRG-relative weights of all patients seen in years time divided by patients hospitalized A measure of the clinical severity or resource requirements of the patients in a particular hospital or treated by a particular clinician during a specific time period.

Case Mix Index calculations:

summing the Medicare DRG weight for every inpatient discharge and dividing by the number of discharges. (LaTour 470)

Electronic Data Interchange (EDI)

the computer-to-computer exchange of business documents from a retailer to a vendor and back a standard format for the electronic exchange of information between supply chain participants

medical necessity

treatment provided by a physician to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, or its symptoms in a manner that is appropriate and is provided in accordance with generally accepted standards of medical practice

The Health Insurance Portability and Accountability Act (HIPAA) requires the retention of health insurance claims and accounting records for a minimum of ____ years, unless state law specifies a longer period. 6 5 7 10

5 INCORRECT As per 42 CFR 482.24(b)(1), health records are to be maintained for at least 5 years by CMS.

MS-DRG grouper

A computer program that assigns inpatient cases to Medicare severity diagnosis-related groups and determines the Medicare reimbursement rate. Software that helps coders assign the appropriate Medicare severity diagnosis-related group based on the level of services provided, severity of the illness or injury, and other factors.

Health care claims transactions use one of three *electronic* formats, including which one of those listed below? CMS-1500 flat-file format ANSI ASC X12N 837 format National Claim Format Medicare Summary Notice format

ANSI ASC X12N *837* format INCORRECT Each electronic version of a claim form has its own designation.

Currently, which prospective payment system is used to determine the payment to the "physician" for physician services covered under Medicare Part B, such as outpatient surgery performed on a Medicare patient? APCs RBRVS MS-DRGs ASC PPS

ASC PPS INCORRECT Outpatient surgery is performed in an Ambulatory Surgery Center (ASC); therefore, the reimbursement would be processed under the ASC PPS (prospective payment system).

Which of the following statements is FALSE regarding the use of modifiers with the CPT codes? Modifiers are appended to the end of the CPT code. Some procedures may require more than one modifier. All modifiers will alter (increase or decrease) the reimbursement of the procedure. Not all procedures need a modifier.

All modifiers will alter (increase or decrease) the reimbursement of the procedure. CORRECT Some modifiers provide rationale or explanation, but do not necessarily impact reimbursement.

Payment status indicator (PSI)

An alphabetic code assigned to CPT/HCPCS codes to indicate whether a service or procedure is to be reimbursed under the Medicare outpatient prospective payment system

cost accounting

An area of accounting that involves measuring, recording, and reporting product costs. Used to reduce and eliminate costs in a business. Cost accounting is used to determine a price for a product or service that will allow earnings of a reasonable profit.

Use the following case scenario to answer the question. A patient with Medicare is seen in the physician's office. The total charge for this office visit is $250.00. The patient has previously paid his deductible under Medicare Part B. The PAR Medicare fee schedule amount for this service is $200.00. The non-PAR Medicare fee schedule amount for this service is $190.00. If this physician is a nonparticipating physician who does NOT accept assignment for this claim, the total amount of the patient's financial liability (out-of-pocket expense) is $66.50. $152.00. $38.00. $190.00.

$66.50. INCORRECT If a physician is a nonparticipating physician who does not accept assignment, he or she may collect a maximum of *15% (the limiting charge) over the non-PAR Medicare fee schedule amount.* $190.00 = non-PAR Medicare schedule amount *$190.00 x 0.20* = $38.00 = patient liable for 20% coinsurance (patient previously met the deductible) $190.00 x 0.80 = $152.00 = Medicare pays 80% *$190.00 x 0.15* = $28.50 = *15% (limiting charge)* over non-PAR Medicare fee schedule amount Physician can balance bill and collect from the patient the difference between the non-PAR Medicare fee schedule amount and the total charge amount. Therefore, the patient's financial liability is $38.00 (*coinsurance*) + 28.50 (*limiting charge*) = *$66.50.*

Under ASC PPS, when multiple procedures are performed during the same surgical session, a *payment reduction* is applied. The procedure in the highest level group is reimbursed at _____ and all remaining procedures are reimbursed at ______. 100%, 75% 50%, 25% 100%, 25% 100%, 50%

100%, 50% INCORRECT The "reduction" is based on the fact that, for the second procedure, the preparation and other work is already done.

Under ASC PPSs, bilateral procedures are reimbursed at _______ of the payment rate for their group. 100% 50% 150% 200%

150% CORRECT 100% for the first side + 50% for the second side.

Medicaid

Federal program that provides medical benefits for low-income persons.

Home Health Agencies (HHAs) utilize a data entry software system developed by the Centers for Medicare and Medicaid Services (CMS). This software is available to HHAs at no cost through the CMS website or on a CD-ROM. HAVEN (Home Assessment Validation and Entry) HHASS (Home Health Agency Software System) PEPP (Payment Error Prevention Program) PACE (Patient Assessment and Comprehensive Evaluation)

HAVEN (Home Assessment Validation and Entry) INCORRECT Think of it this way—for many people, their home is their HAVEN.

The term "hard coding" refers to ICD-10-CM/ICD-10-PCS codes that appear in the hospital's chargemaster and that are automatically included on the patient's bill. ICD-10-CM/ICD-10-PCS codes that are coded by the coders. HCPCS/CPT codes that are coded by the coders. HCPCS/CPT codes that appear in the hospital's chargemaster and will be included automatically on the patient's bill.

HCPCS/CPT codes that appear in the hospital's chargemaster and will be included automatically on the patient's bill. INCORRECT Codes for services that are always provided.

Ambulatory Payment Classification (APC)

Hospital Outpatient Prospective Payment System (HOPPS). The classification is a resource-based reimbursement system. The payment unit is the ambulatory payment classification group (APC group). Prospective payment system used to calculate reimbursement for outpatient care according to similar clinical characteristics and in terms of resources required.

APC Status Indicator Codes

The icons below are shown on the appropriate CPT® and HCPCS codes. A Services Paid under Fee Schedule or Payment System other than OPPS B Codes Not Recognized by OPPS when submitted on Outpatient Hospital Part B Bill Type (12x/13x) C Inpatient Procedures, not paid under OPPS D Discontinued Codes E1 Non-Covered Service, not paid under OPPS E2 Items and Services for which pricing information and claims data are not available F Corneal, CRNA and Hepatitis B G Pass-Through Drugs and Biologicals H Pass-Through Device Categories J1 Hospital Part B services paid through a comprehensive APC J2 Hospital Part B Services That May Be Paid Through a Comprehensive APC K Nonpass-Through Drugs and Nonimplantable Biologicals, Including Therapeutic Radiopharmaceuticals L Influenza Vaccine; Pneumococcal Pneumonia Vaccine M Items and Services Not Billable to the Fiscal Intermediary/MAC N Items and Services Packaged into APC Rates P Partial Hospitalization Q1 STVX-Packaged Codes Q2 T-Packaged Codes Q3 Codes That May Be Paid Through a Composite APC Q4 Conditionally packaged laboratory tests R Blood and Blood Products S Significant Procedure, Not Discounted When Multiple T Significant Procedure, Multiple Reduction Applies U Brachytherapy Sources V Clinic or Emergency Department Visit X Ancillary Services Y Non-Implantable Durable Medical Equipment

National Provider Identifier (NPI)

Unique 10-digit code for providers required by HIPAA.

Hard coding

Use of the charge description master to code repetitive services. Embedding a specific value throughout the code.

Hospital-Acquired Conditions (HACs)

When these conditions are not present on admission, it is assumed that it was hospital acquired and therefore, the hospital may not receive additional payment.