Unit 4: Insurance and Billing Fundamentals

• Topic 01

  Insurance Terminology — Premium, Deductible, Co-pay, Co-insurance, and OOP Max

  15 questions
• Topic 02

  Eligibility Verification — Real-Time and Manual Methods

  15 questions
• Topic 03

  Pre-authorisation and Referral Management

  15 questions
• Topic 04

  Patient Registration — Demographic and Insurance Data Entry

  15 questions
• Topic 05

  Explanation of Benefits (EOB) Interpretation

  15 questions
• Topic 06

  Patient Statements and Collections — Policies and FDCPA Basics

  15 questions
• Topic 07

  Financial Counselling and Payment Plans

  15 questions

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

1. A CMAA is managing prior authorisations for a patient with multiple chronic conditions who requires ongoing authorisations for weekly physical therapy, monthly specialist visits, and quarterly MRI scans. Each has different validity periods and renewal timelines. What system should the CMAA maintain to prevent lapses?

   • A
     Submit new authorisation requests only after each one expires to avoid duplication of requests
   • B
     Rely on the clinical staff to track their own prior auth expirations and alert the CMAA when needed
   • C
     An authorisation log tracking each service's auth number, approval date, expiration date, number of authorised visits, visits used, and renewal due date; the CMAA should set internal reminders at least 2 weeks before each expiration
     Correct answer
   • D
     Track authorisations only for Medicare Advantage patients; commercial payer authorisations do not expire
   Explanation

   Managing multiple concurrent authorisations for a complex patient requires a systematic authorisation log. Each entry should include: auth number, service type, authorised procedure/CPT code, approval date, expiration date, number of visits authorised, visits used, and renewal due date. The CMAA should set proactive renewal reminders — ideally 2 weeks before expiration — to allow time for the renewal request to be processed. Waiting until after expiration forces retro-auth requests which may be denied. Key takeaway: a detailed authorisation log with proactive expiration tracking is essential for patients with multiple ongoing prior authorisation needs.

2. What is patient registration, and why is it considered a foundational step in the healthcare revenue cycle?

   • A
     The clinical process of documenting a patient's symptoms and vital signs at the start of a visit
   • B
     The process of assigning a diagnosis code and procedure code before billing
   • C
     The scheduling step where a patient selects their preferred appointment time and provider
   • D
     The administrative process of collecting, verifying, and entering a patient's demographic and insurance data so the practice can schedule, treat, and bill correctly; errors here propagate into downstream claim denials
     Correct answer
   Explanation

   Patient registration is the administrative foundation of the revenue cycle. Every downstream process — eligibility verification, claim submission, payment posting, and patient billing — depends on accurate demographic and insurance data entered at registration. A wrong date of birth, incorrect member ID, or missing group number can cause claim rejections, denials, and delayed payments. Key takeaway: accurate registration data is the cornerstone of clean claims and a healthy revenue cycle.

3. Under the ACA, what does the independent external review process provide for a denied prior authorisation?

   • A
     A review by the state insurance commissioner that results in a refund to the patient if the denial is upheld
   • B
     A second internal review by the payer's own clinical staff that is not binding but provides a formal written response
   • C
     A CMS-conducted review available only for Medicare Advantage denials, not commercial plans
   • D
     An independent organisation (not affiliated with the payer) reviews the denial and issues a decision that is binding on the payer; available for urgent/expedited cases and standard clinical reviews
     Correct answer
   Explanation

   The ACA requires health plans (individual and group markets) to offer an independent external review process for denied claims and denied authorisations. An independent review organisation (IRO) reviews the clinical and administrative merits of the denial, and its decision is binding on the payer. This means if the IRO overturns the denial, the payer must cover the service. Expedited external review is available for urgent/time-sensitive situations. Key takeaway: ACA external review = independent, binding review of denied authorisations by a third-party IRO.