Billing, Coding & Insurance

1. A medical assistant is coding an office visit where the physician performed a procedure that required significantly more work than usual due to the patient's complex condition. Which CPT modifier should be appended?

Modifier -22 indicates increased procedural services beyond what is typically required. Modifier -25 is used for a significant, separately identifiable E/M service on the same day as a procedure. Modifier -59 identifies a distinct procedural service, and Modifier -51 indicates multiple procedures performed at the same session.

2. A provider intentionally submits claims using CPT codes that reflect a higher level of service than was actually provided in order to receive greater reimbursement. This practice is known as:

Upcoding is the fraudulent practice of billing a higher-level code than the service warranted. Downcoding is billing at a lower level, often done by payers when documentation is insufficient. Bundling combines related services under one code, while unbundling separates them to increase reimbursement (also fraudulent).

3. A Medicare patient is scheduled for a service that Medicare may not cover. Which form must the medical assistant have the patient sign before the service is rendered so the patient understands they may be financially responsible?

The Advance Beneficiary Notice (ABN) informs a Medicare patient that a service may not be covered and that the patient may be responsible for payment. The EOB is sent to patients after a claim is processed, the RA is sent to providers, and the NPP addresses HIPAA privacy rights.

4. Which coding system is used to report durable medical equipment, ambulance services, and certain injectable drugs?

HCPCS Level II codes are used to report supplies, DME, ambulance services, and injectable medications not covered by CPT. ICD-10-CM reports diagnoses, CPT Category I reports physician procedures, and ICD-10-PCS is used for inpatient hospital procedures.

5. A claim is denied because the diagnosis code did not support the medical necessity of the procedure performed. This is a failure of:

Code linkage refers to connecting each CPT procedure code with an ICD diagnosis code that justifies medical necessity. Precertification is prior payer approval, bundling involves grouping codes, and eligibility verification confirms coverage status—none of these directly address the diagnosis-procedure relationship.

6. A patient has a $1,500 annual deductible. They have paid $800 toward it this year and now receive a bill for $500 for covered services. How much will the patient owe toward the deductible for this visit?

The patient still has $700 remaining on their deductible ($1,500 − $800). Since the $500 bill is less than the remaining deductible, the patient owes the full $500. They would owe $0 only if the deductible were met, and $200 or $700 do not reflect the correct calculation.

7. Which federal insurance program provides healthcare coverage for active-duty military members and their dependents?

TRICARE covers active-duty service members, retirees, and their families. CHAMPVA covers dependents of veterans with permanent service-connected disabilities. Medicaid serves low-income individuals, and Medicare Part B covers outpatient services for those 65+ or disabled.

8. A medical assistant is reviewing the accounts receivable aging report. An account listed in the 90-120 day column indicates:

An aging report categorizes unpaid balances by how long they have been outstanding, so 90-120 days means the balance has gone unpaid for that time period. Older accounts are more difficult to collect and may require collection agency involvement.

9. Before scheduling an MRI for a patient with commercial insurance, the medical assistant contacts the insurance company to obtain approval. This process is called:

Precertification (prior authorization) is obtaining insurer approval before performing certain services to confirm coverage. Coordination of benefits determines primary vs. secondary payer, adjudication is the claim review process, and assignment of benefits authorizes payment directly to the provider.

10. A remittance advice (RA) is best described as:

A remittance advice is sent by the payer to the provider explaining how claims were adjudicated, including payments, adjustments, and denials. An EOB is the patient-facing equivalent. An ABN is used for potentially non-covered Medicare services, and prior authorization is a pre-service approval.

1. Which of the following BEST describes accounts payable in a medical practice?

Accounts payable represents debts the practice owes to others, such as suppliers and vendors. Accounts receivable is money owed to the practice. Write-offs are uncollectible amounts, and point-of-service collections are patient payments received at the visit.

2. A patient's insurance policy requires them to pay 20% of the allowed charges after the deductible has been met. This 20% payment is called:

Co-insurance is a percentage of allowed charges the patient pays after meeting the deductible. A co-payment is a fixed dollar amount paid at the visit. A premium is the monthly cost of the policy, and the deductible is the amount paid before insurance begins covering services.

3. A medical assistant discovers a coworker is billing for services that were never provided. This is an example of:

Billing for services never rendered is insurance fraud, an intentional act of deception for financial gain. Abuse involves practices inconsistent with sound business or medical practices but without intent to deceive. Downcoding is billing at a lower level, and unbundling separates bundled procedures.

4. At the end of the day, the medical assistant compares the day sheet totals to the payments collected and the encounter forms generated. This process is known as:

End-of-day reconciliation verifies that all charges, payments, and adjustments are accurately recorded and match the day's activity. Adjudication is done by the payer, aging of accounts tracks outstanding balances by time, and posting adjustments involves recording write-offs or corrections.

5. A worker slips on a wet floor at their job and injures their back. Which type of insurance should be billed for their medical treatment?

Workers' compensation covers medical expenses and lost wages resulting from job-related injuries or illnesses. Private insurance, Medicare, and Medicaid are generally not billed for work-related injuries when workers' compensation applies.

6. Under the Fair Debt Collection Practices Act (FDCPA), which of the following actions is PROHIBITED when collecting a patient's overdue account?

The FDCPA prohibits threats, harassment, and false statements such as threatening arrest for unpaid medical bills. Calls between 8 AM and 9 PM are allowed, and providing itemized statements and offering payment plans are appropriate collection practices.

7. A patient's insurance claim is rejected because the insurance ID number was entered incorrectly. The BEST first action for the medical assistant is to:

A rejection due to a clerical error such as an incorrect ID number should be corrected and resubmitted; this is not a denial requiring appeal. Writing off the balance or sending the account to collections would be premature and inappropriate.

8. Which type of managed care plan typically requires the patient to select a primary care provider (PCP) who coordinates all care and provides referrals to specialists?

HMOs require patients to choose a PCP who serves as a gatekeeper and provides referrals for specialist care. PPOs allow self-referrals to specialists, indemnity plans have no network restrictions, and EPOs restrict to a network but generally do not require PCP referrals.

9. In double-entry bookkeeping for a medical practice, a debit to the patient's account represents:

In accounts receivable, a debit increases the patient's balance, such as when a charge is posted for services rendered. Credits decrease the balance and include payments received, write-off adjustments, and refunds applied to the account.

10. SCHIP (State Children's Health Insurance Program) primarily provides coverage for:

SCHIP (also called CHIP) provides health coverage for children in families whose income is too high to qualify for Medicaid but too low to afford private insurance. Military dependents use TRICARE, disabled beneficiaries use Medicare, and federal employee children are covered under FEHB.

1. A medical assistant is coding a procedure that involves two distinct services performed on the same day. To indicate that these were separate and identifiable procedures, which CPT modifier should be appended?

Modifier -59 indicates a distinct procedural service that is separate from other services performed on the same day. Modifier -25 is used for a significant, separately identifiable E/M service. Modifier -50 indicates a bilateral procedure, and modifier -76 indicates a repeat procedure by the same physician.

2. A provider intentionally reports a higher-level office visit code than what was actually performed to increase reimbursement. This practice is known as:

Upcoding is the fraudulent practice of billing for a more expensive service than was actually rendered. Downcoding is the opposite—billing at a lower level. Bundling combines related services under one code, and unbundling improperly separates them to increase reimbursement.

3. A Medicare patient is scheduled for a service that Medicare may not cover. What form must the medical assistant have the patient sign before the service is provided?

The ABN informs Medicare patients in advance that a service may not be covered, making them financially responsible if Medicare denies the claim. An EOB is sent to patients after claim processing, a Remittance Advice is sent to providers, and a HIPAA Privacy Notice addresses protected health information, not payment liability.

4. Which coding system is used to report supplies, durable medical equipment (DME), and services not included in CPT?

HCPCS Level II codes cover supplies, DME, ambulance services, and drugs administered by injection—items not typically included in CPT. ICD-10-CM is for diagnoses, CPT Category I is for procedures/services by providers, and DSM-5 is used for mental health diagnoses.

5. A patient has a $1,500 annual deductible and has paid $800 toward it this year. She receives a $500 covered service. How much will she owe toward her deductible for this service (assuming no copay/coinsurance)?

The patient still has $700 remaining on her deductible ($1,500 − $800). Since the service costs $500, which is less than the remaining deductible, she is responsible for the full $500. She has not yet met the deductible, so insurance will not pay.

6. Which type of insurance is designed to cover medical expenses and lost wages for employees injured on the job?

Workers' compensation is a state-mandated insurance program that covers medical expenses and lost wages for work-related injuries or illnesses. Medicaid covers low-income individuals, TRICARE covers military members and their families, and Medicare Part B covers outpatient medical services for those 65 or older or disabled.

7. A medical assistant reviews an accounts receivable aging report showing a balance in the 90+ day column. What does this indicate?

An aging report categorizes outstanding balances by how long they have been unpaid; the 90+ day column shows accounts unpaid for more than 90 days. It does not indicate a credit balance, timely payment, or automatic write-off—those require separate actions by the office.

8. Before scheduling an MRI, a medical assistant contacts the insurance company to obtain approval. This process is known as:

Prior authorization (precertification) is the process of obtaining approval from an insurer before a service is provided to confirm coverage. Claim submission occurs after the service, a remittance advice details payment, and coordination of benefits determines primary/secondary payer order.

9. A claim is denied because the diagnosis code does not support the necessity of the procedure performed. This is a failure of:

Code linkage connects the CPT procedure code to the ICD diagnosis code to demonstrate medical necessity; if the diagnosis does not justify the procedure, the claim is denied. Prior authorization involves pre-approval, coordination of benefits addresses multi-payer order, and timely filing refers to submission deadlines.

10. Which of the following BEST describes accounts payable?

Accounts payable represents money the practice owes to outside vendors, suppliers, or creditors. Money owed to the practice is accounts receivable, insurance payments are posted as credits/payments, and adjustments are write-offs or corrections applied to accounts.

1. A medical assistant is performing end-of-day reconciliation. Which of the following is the primary purpose of this task?

End-of-day reconciliation verifies that all financial transactions posted match the day's totals (charges, payments, adjustments) to identify errors. Claim submission, deductible calculation, and aging reports are separate financial tasks.

2. Under the Fair Debt Collection Practices Act (FDCPA), when may a medical assistant call a patient to collect a debt?

The FDCPA prohibits contacting consumers before 8:00 a.m. or after 9:00 p.m. in the debtor's local time. Contact at other times, including anytime day/night or only 6 a.m.–11 p.m., would violate the law. Business hours are not the specified restriction.

3. A federally funded insurance program that provides health coverage for children in low-income families who do not qualify for Medicaid is:

SCHIP (State Children's Health Insurance Program, also called CHIP) covers children in families with incomes too high to qualify for Medicaid but too low to afford private insurance. TRICARE serves military families, CHAMPVA serves families of disabled/deceased veterans, and Medicare Advantage is for Medicare beneficiaries.

4. A medical assistant receives an Explanation of Benefits (EOB) showing the insurance paid less than the billed amount, and the contract specifies the difference must be adjusted off. This entry is called a:

A contractual write-off (adjustment) reduces the patient's balance based on the contracted rate between the provider and payer. A debit increases the balance, a copayment is paid by the patient at the visit, and a credit balance occurs when overpayment exceeds the amount owed.

5. Which of the following is an example of insurance abuse rather than fraud?

Abuse involves unintentional practices that result in unnecessary costs, such as inadvertent billing errors. Fraud requires intentional deception—such as billing for services not performed, falsifying diagnoses, or receiving kickbacks—all of which are illegal fraudulent acts.

6. A managed care plan requires patients to select a primary care provider (PCP) who acts as a gatekeeper for specialty referrals. This describes a:

HMOs require members to choose a PCP who coordinates all care and provides referrals to specialists. PPOs allow patients to see specialists without a referral, indemnity plans give full provider choice with no gatekeeping, and while POS plans use a PCP, the question specifies a gatekeeper model most characteristic of HMOs.

7. A patient's insurance charges 20% coinsurance after the deductible is met. The allowed amount for the service is $400 and the deductible has been met. How much does the patient owe?

Coinsurance of 20% of the $400 allowed amount equals $80 owed by the patient. The insurance would pay the remaining $320. $20 and $40 are incorrect calculations of the percentage.

8. A claim is denied by the insurance company. The provider believes the denial was incorrect. What is the appropriate next step?

When a claim is denied and the denial is believed to be incorrect, an appeal should be filed with supporting documentation such as medical records. Writing off the balance forfeits payment, billing the patient without recourse may be improper, and resubmitting an identical claim will typically result in another denial.

9. A medical assistant is verifying insurance eligibility before a patient's visit. Which piece of information is MOST essential to confirm?

Verifying that the insurance is active and covers the service on the specific date is essential to ensure the claim will be paid and the patient is informed of financial responsibility. Marital status, employer phone, and CEO name are not relevant to eligibility verification.

10. A patient receives an itemized statement from the medical office. This document should include:

An itemized statement lists each date of service, the procedures performed, charges, payments/adjustments applied, and the outstanding balance so the patient can review specific charges. Providing only a total lacks transparency, and including tax returns or other patients' information would be inappropriate and violate HIPAA.

1. A provider intentionally reports a CPT code for a more complex service than was actually performed to receive higher reimbursement. This practice is known as:

Upcoding is billing a higher-level service than what was actually performed and is considered insurance fraud. Downcoding is reporting a lower level of service than was provided. Bundling groups related services under a single code, while unbundling improperly separates bundled services to increase reimbursement (also fraud, but distinct from upcoding).

2. A Medicare patient is scheduled for a service that may not be covered by Medicare. Which document must be provided to the patient before the service is rendered so the patient can decide whether to accept financial responsibility?

The Advance Beneficiary Notice (ABN) is given to Medicare patients before services that Medicare may not cover, allowing the patient to accept or decline financial responsibility. An EOB is sent to the patient after claim processing, an RA is sent to the provider, and a COB form is used when a patient has multiple insurance plans.

3. Which type of insurance provides healthcare coverage for active-duty military personnel, retirees, and their dependents?

TRICARE is the healthcare program for active-duty service members, retirees, and their dependents. CHAMPVA covers dependents of veterans with permanent service-connected disabilities. Medicaid is a state/federal program for low-income individuals, and SCHIP covers children in families with incomes above Medicaid limits.

4. A medical assistant is reviewing an aging report and notices that a patient's balance has been outstanding for 95 days. Into which aging category does this account fall?

An account outstanding for 95 days falls into the 91-120 day category on a standard aging report. Aging reports typically categorize accounts in 30-day increments to help track collections. Accounts in later aging categories require more aggressive collection efforts.

5. A patient's insurance policy has a $1,500 annual deductible. The patient has paid $800 toward the deductible this year and now receives a bill for $500 in covered services. How much of this bill will the patient owe before insurance begins to pay?

The patient still owes $700 on the deductible ($1,500 - $800). Since the current bill is $500 and the remaining deductible exceeds this amount, the patient owes the full $500 before insurance begins to pay. Insurance would begin paying only after the full $1,500 deductible is satisfied.

6. A medical assistant is submitting a claim for a diagnostic procedure. To meet medical necessity guidelines, the claim must include:

Medical necessity requires that each procedure code (CPT) be linked to a diagnosis code (ICD-10-CM) that justifies why the service was performed. Without proper linkage, the claim will likely be denied. Submitting only one code type does not demonstrate medical necessity, and duplicate CPT codes without justification would trigger a denial.

7. A patient's insurance requires approval from the insurance company before an MRI can be performed. This process is called:

Prior authorization (or precertification) is the process of obtaining approval from an insurance company before providing certain services, medications, or procedures. Coordination of benefits determines the payment order when a patient has multiple insurances. Capitation is a payment model paying a set fee per patient, and assignment of benefits allows the provider to receive payment directly from the insurer.

8. At the end of the business day, a medical assistant performs end-of-day reconciliation. Which of the following best describes this task?

End-of-day reconciliation involves comparing the day's posted charges, payments, and adjustments against actual receipts (cash, checks, credit cards) to ensure the totals balance. This process helps identify posting errors and prevents financial discrepancies. Claim submission, statement mailing, and collection follow-up are separate accounts receivable tasks.

9. Which CPT modifier is used to indicate that a procedure was bilateral?

Modifier -50 indicates a bilateral procedure (performed on both sides of the body). Modifier -25 indicates a significant, separately identifiable E/M service on the same day as a procedure. Modifier -59 indicates a distinct procedural service, and modifier -76 indicates a repeat procedure by the same physician.

10. A federal law requires that when a patient requests it, a medical practice must stop making collection calls. This is part of which act?

The Fair Debt Collection Practices Act (FDCPA) regulates debt collection practices, including requirements to stop contacting a debtor upon written request and prohibiting harassment. HIPAA governs patient privacy, TILA requires disclosure of credit terms when payments are made in more than four installments, and ECOA prohibits discrimination in credit decisions.