Chapter 4

Question 1

accept assignment

Answer 1

provider accepts as payment in full whatever is paid on the claim by the payer (except for any copayment and/or coinsurance amounts).

Question 2

accounts receivable

Answer 2

the amount owed to a business for services or goods provided.

Question 3

accounts receivable aging report

Answer 3

shows the status (by date) of outstanding claims from each payer, as well as payments due from patients.

Question 4

accounts receivable management

Answer 4

assists providers in the collection of appropriate reimbursement for services rendered; includes functions such as insurance verification/eligibility and preauthorization of services.

Question 5

allowed charges

Answer 5

the maximum amount the payer will reimburse for each procedure or service, according to the patient’s policy.

Question 6

ANSI ASC X12N

Answer 6

an electronic format standard that uses a variable-length file format to process transactions for institutional, professional, dental, and drug claims.

Question 7

appeal

Answer 7

documented as a letter, signed by the provider, explaining why a claim should be reconsidered for payment.

Question 8

assignment of benefits

Answer 8

the provider receives reimbursement directly from the payer.

Question 9

bad debt

Answer 9

accounts receivable that cannot be collected by the provider or a collection agenc

Question 10

beneficiary

Answer 10

the person eligible to receive health care benefits.

Question 11

birthday rule

Answer 11

determines coverage by primary and secondary policies when each parent subscribes to a different health insurance plan.

Question 12

case management

Answer 12

development of patient care plans to coordinate and provide care for complicated cases in a cost-effective manner.

Question 13

charge description master (CDM)

Answer 13

see chargemaster.

Question 14

chargemaster

Answer 14

document that contains a computer-generated list of procedures, services, and supplies with charges for each; chargemaster data are entered in the facility’s patient accounting system, and charges are automatically posted to the patient’s bill (UB-04).

Question 15

chargemaster maintenance

Answer 15

process of updating and revising key elements of the chargemaster (or charge description master [CDM]) to ensure accurate reimbursement.

Question 16

chargemaster team

Answer 16

team of representatives from a variety of departments who jointly share responsibility for updating and revising the chargemaster to ensure accuracy.

Question 17

claims adjudication

Answer 17

comparing a claim to payer edits and the patient’s health plan benefits to verify that the required information is available to process the claim; the claim is not a duplicate; payer rules and procedures have been followed; and procedures performed or services provided are covered benefits.

Question 18

claims adjustment reason code (CARC)

Answer 18

reason for denied claim as reported on the remittance advice or explanation of benefits.

Question 19

claims attachment

Answer 19

medical report substantiating a medical condition.

Question 20

claims denial

Answer 20

unpaid claim returned by third-party payers because of beneficiary identification errors, coding errors, diagnosis that does not support medical necessity of procedure/service, duplicate claims, global days of surgery E/M coverage issue, NCCI edits, and other patient coverage issues (e.g., procedure or service required preauthorization, procedure is not included in patient’s health plan contract, such as cosmetic surgery).

Question 21

claims processing

Answer 21

sorting claims upon submission to collect and verify information about the patient and provider.

Question 22

claims rejection

Answer 22

unpaid claim returned by third-party payers because it fails to meet certain data requirements, such as missing data (e.g., patient name, policy number); rejected claims can be corrected and resubmitted for processing.

Question 23

claims submission

Answer 23

the transmission of claims data (electronically or manually) to payers or clearinghouses for processing.

Question 24

clean claim

Answer 24

a correctly completed standardized claim (e.g., CMS-1500 claim).

Question 25

clearinghouse

Answer 25

agency or organization that collects, processes, and distributes health care claims after editing and validating them to ensure that they are error-free, reformatting them to the payer’s specifications, and submitting them electronically to the appropriate payer for further processing to generate reimbursement to the provider.

Question 26

closed claim

Answer 26

claims for which all processing, including appeals, has been completed.

Question 27

coinsurance

Answer 27

2nd insurance

Question 28

common data file

Answer 28

abstract of all recent claims filed on each patient.

Question 29

concurrent review

Answer 29

review for medical necessity of tests and procedures ordered during an inpatient hospitalization.

Question 30

Consumer Credit Protection Act of 1968

Answer 30

was considered landmark legislation because it launched truth-in-lending disclosures that required creditors to communicate the cost of borrowing money in a common language so that consumers could figure out the charges, compare costs, and shop for the best credit deal.

Question 31

coordination of benefits (COB)

Answer 31

provision in group health insurance policies that prevents multiple insurers from paying benefits covered by other policies; also specifies that coverage will be provided in a specific sequence when more than one policy covers the claim.

Question 32

covered entity

Answer 32

private sector health plans (excluding certain small self-administered health plans), managed care organizations, ERISA-covered health benefit plans (Employee Retirement Income Security Act of 1974), and government health plans (including Medicare, Medicaid, Military Health System for active duty and civilian personnel; Veterans Health Administration, and Indian Health Service programs); all health care clearinghouses; and all health care providers that choose to submit or receive transactions electronically.

Question 33

data analytics

Answer 33

tools and systems that are used to analyze clinical and financial data, conduct research, and evaluate the effectiveness of disease treatments.

Question 34

data mining

Answer 34

extracting and analyzing data to identify patterns, whether predictable or unpredictable.

Question 35

data warehouse

Answer 35

database that use reporting interfaces to consolidate multiple databases, allowing reports to be generated from a single request; data is accumulated from a wide range of sources within an organization and is used to guide management decisions.

Question 36

day sheet

Answer 36

also called manual daily accounts receivable journal; chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day.

Question 37

deductible

Answer 37

amount paid out of pocket

Question 38

delinquent account

Answer 38

see past due account.

Question 39

delinquent claim

Answer 39

claim usually more than 120 days past due; some practices establish time frames that are less than or more than 120 days past due.

Question 40

delinquent claim cycle

Answer 40

advances through various aging periods (30 days, 60 days, 90 days, and so on), with practices typically focusing internal recovery efforts on older delinquent accounts (e.g., 120 days or more).

Question 41

denied claim

Answer 41

claim returned to the provider by payers due to coding errors, missing information, and patient coverage issues

Question 42

discharge planning

Answer 42

involves arranging appropriate health care services for the discharged patient (e.g., home health care).

Question 43

downcoding

Answer 43

assigning lower-level codes than documented in the record.

Question 44

electronic data interchange (EDI)

Answer 44

computer-to-computer exchange of data between provider and payer.

Question 45

electronic flat file format

Answer 45

series of fixed-length records (e.g., 25 spaces for patient’s name) submitted to payers to bill for health care services.

Question 46

electronic funds transfer (EFT)

Answer 46

system by which payers deposit funds to the provider’s account electronically.

Question 47

Electronic Funds Transfer Act

Answer 47

established the rights, liabilities, and responsibilities of participants in electronic funds transfer systems.

Question 48

Electronic Healthcare Network Accreditation Commission (EHNAC)

Answer 48

organization that accredits clearinghouses.

Question 49

electronic media claim

Answer 49

see electronic flat file format.

Question 50

electronic remittance advice (ERA)

Answer 50

remittance advice that is submitted to the provider electronically and contains the same information as a paper-based remittance advice; providers receive the ERA more

Question 51

encounter form

Answer 51

financial record source document used by providers and other personnel to record treated diagnoses and services rendered to the patient during the current encounter.

Question 52

Equal Credit Opportunity Act

Answer 52

prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.

Question 53

Fair Credit and Charge Card Disclosure Act

Answer 53

amended the Truth in Lending Act, requiring credit and charge card issuers to provide certain disclosures in direct mail, telephone, and other applications and solicitations for open-end credit and charge accounts and under other circumstances; this law applies to providers that accept credit cards.

Question 54

Fair Credit Billing Act

Answer 54

federal law passed in 1975 that helps consumers resolve billing issues with card issuers; protects important credit rights, including rights to dispute billing errors, unauthorized use of an account, and charges for unsatisfactory goods and services; cardholders cannot be held liable for more than $50 of fraudulent charges made to a credit card.

Question 55

Fair Credit Reporting Act

Answer 55

protects information collected by consumer reporting agencies such as credit bureaus, medical information companies, and tenant screening services; organizations that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information.

Question 56

Fair Debt Collection Practices Act (FDCPA)

Answer 56

specifies what a collection source may and may not do when pursuing payment of past due accounts.

Question 57

guarantor

Answer 57

person responsible for paying health care fees

Question 58

integrated revenue cycle (IRC)

Answer 58

combining revenue cycle management with clinical, coding, and information management decisions because of the impact on financial management.

Question 59

litigation

Answer 59

legal action to recover a debt; usually a last resort for a medical practice.

Question 60

manual daily accounts receivable journal

Answer 60

also called the day sheet; a chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day.

Question 61

metrics

Answer 61

standards of measurement, such as those used to evaluate an organization’s revenue cycle to ensure financial viability.

Question 62

noncovered benefit

Answer 62

any procedure or service reported on a claim that is not included on the payer’s master benefit list, resulting in denial of the claim; also called noncovered procedure or uncovered benefit.

Question 63

nonparticipating provider (nonPAR)

Answer 63

does not contract with the insurance plan; patients who elect to receive care from nonPARs will incur higher out-of-pocket expenses

Question 64

open claim

Answer 64

submitted to the payer, but processing is not complete.

Question 65

out-of-pocket payment

Answer 65

enrollee who sees a non-HMO panel specialist without a referral from the primary care physician.

Question 66

outsource

Answer 66

contract out.

Question 67

participating provider (PAR)

Answer 67

contracts with a health insurance plan and accepts whatever the plan pays for procedures or services performed

Question 68

past-due account

Answer 68

one that has not been paid within a certain time frame (e.g., 120 days); also called delinquent account.

Question 69

patient account record

Answer 69

also called patient ledger; a computerized permanent record of all financial transactions between the patient and the practice.

Question 70

patient ledger

Answer 70

see patient account record.

Question 71

preadmission certification (PAC)

Answer 71

review for medical necessity of inpatient care prior to the patient’s admission.

Question 72

preadmission review

Answer 72

see preadmission certification.

Question 73

preauthorization

Answer 73

health plan review that grants prior approval health care services.

Question 74

precertification

Answer 74

see preauthorization.

Question 75

pre-existing condition

Answer 75

any medical condition that was diagnosed and/or treated within a specified period of time immediately preceding the enrollee’s effective date of coverage

Question 76

primary health insurance

Answer 76

associated with how a health insurance plan is billed—the insurance plan responsible for paying health care insurance claims first is considered primary.

Question 77

prior approval

Answer 77

see preauthorization

Question 78

prior authorization

Answer 78

health plan review that grants prior approval health care services.

Question 79

prospective review

Answer 79

reviewing appropriateness and necessity of care provided to patients prior to administration of care.

Question 80

Provider Remittance Notice (PRN)

Answer 80

remittance advice submitted by Medicare to providers that includes payment information about a claim.

Question 81

quarterly provider update (QPU)

Answer 81

published by CMS to simplify the process of understanding proposed or implemented instructional, policy, and changes to its programs, such as Medicare.

Question 82

remittance advice remark code (RARC)

Answer 82

additional explanation of reasons for denied claims.

Question 83

resource allocation

Answer 83

distribution of financial resources among competing groups (e.g., hospital departments, state health care organizations).

Question 84

resource allocation monitoring

Answer 84

distribution of financial resources among competing groups (e.g., hospital departments, state health care organizations).

Question 85

retrospective review

Answer 85

reviewing appropriateness and necessity of care provided to patients after the administration of care.

Question 86

revenue code

Answer 86

a four-digit code that indicates location or type of service provided to an institutional patient; reported in FL 42 of UB-04.

Question 87

revenue cycle auditing

Answer 87

assessment process that is conducted as a follow-up to revenue cycle monitoring so that areas of poor performance can be identified and corrected.

Question 88

revenue cycle management

Answer 88

process facilities and providers use to ensure financial viability.

Question 89

revenue cycle monitoring

Answer 89

involves assessing the revenue cycle to ensure financial viability and stability using metrics (standards of measurement).

Question 90

secondary health insurance

Answer 90

billed after primary health insurance has paid contracted amount, and often contains the same coverage as a primary health plan.

Question 91

source document

Answer 91

the routing slip, charge slip, encounter form, or superbill from which the insurance claim was generated.

Question 92

superbill

Answer 92

term used for an encounter form in the physician’s office.

Question 93

suspense

Answer 93

pending.

Question 94

Truth in Lending Act

Answer 94

see Consumer Credit Protection Act of 1968.

Question 95

two-party check

Answer 95

check made out to both patient and provider.

Question 96

unassigned claim

Answer 96

generated for providers who do not accept assignment; organized by year.

Question 97

unauthorized service

Answer 97

services that are provided to a patient without proper authorization or that are not covered by a current authorization

Question 98

unbundling

Answer 98

submitting multiple CPT codes when one code should be submitted.

Question 99

utilization management

Answer 99

method of controlling health care costs and quality of care by reviewing the appropriateness, efficiency, and medical necessity of care provided to patients prior to the administration of care.

Question 100

utilization review

Answer 100

see utilization management

Question 101

value-added network (VAN)

Answer 101

clearinghouse that involves value-added vendors, such as banks, in the processing of claims; using a VAN is more efficient and less expensive for providers than managing their own systems to send and receive transactions directly from numerous entities.