21 Claim Edits, Necessity & Denials Practice Questions & Answers

1. 1. Two CPT codes reported by the same practitioner for the same patient on the same date appear as a pair in the NCCI Procedure-to-Procedure table. How is the pair adjudicated?

   • A.The Column 1 code is paid and the Column 2 code denies unless a modifier bypasses it✓ Answer
   • B.Both codes are paid in full because PTP edits apply only to facility outpatient claims
   • C.Both codes deny and the provider must resubmit them on separate dates of service
   • D.The Column 2 code is paid and the Column 1 code denies as the more inclusive service

   A procedure-to-procedure edit pairs a comprehensive Column 1 code with a component Column 2 code. When both are billed for the same beneficiary, provider and date of service, only the Column 1 code is payable; the Column 2 code denies unless the edit's modifier indicator permits a bypass that the documentation genuinely supports.

   Source: CMS National Correct Coding Initiative Policy Manual, Chapter I (Column One/Column Two correct coding edits)Report a problem with this question

2. 2. How does a Medically Unlikely Edit differ from an NCCI Procedure-to-Procedure edit?

   • A.The MUE is a payer-specific edit, while the PTP edit is written by each MAC
   • B.The MUE compares two different codes billed together on one date of service
   • C.The MUE limits the units of service allowed on a single code for one date✓ Answer
   • D.The MUE applies only to inpatient claims, while the PTP edit applies outpatient

   An MUE is the maximum units of service a provider would report for one HCPCS/CPT code, for one beneficiary, on one date of service, so it is a units edit on a single code. A PTP edit instead evaluates two different codes reported together. Both are national CMS programs, not payer-written or contractor-written policies.

   Source: CMS National Correct Coding Initiative — Medically Unlikely Edits (MUE) program descriptionReport a problem with this question

3. 3. An NCCI Procedure-to-Procedure edit carries a correct coding modifier indicator of 0. What does that indicator tell the coder?

   • A.The edit may be bypassed once the payer grants a written exception in advance
   • B.The edit may be bypassed with a modifier when documentation shows a distinct service
   • C.The edit has been deleted, so both codes may be reported without a modifier
   • D.The edit can never be bypassed by any modifier; report the Column 1 code alone✓ Answer

   The correct coding modifier indicator states whether the edit may be bypassed at all: 0 means no modifier will ever override it, 1 means an NCCI-associated modifier may bypass it when documentation supports a distinct service, and 9 means the edit has been deleted and does not apply. Candidates most often reverse 0 and 1.

   Source: CMS NCCI Policy Manual, Chapter I — Correct Coding Modifier Indicators (0, 1, 9)Report a problem with this question

4. 4. A claim line exceeds the code's MUE value, and the edit's MUE Adjudication Indicator is 2. What does that mean for the excess units?

   • A.The excess units are held until the provider submits the operative report
   • B.The excess units can never be paid, because the limit rests on regulation or anatomy✓ Answer
   • C.The excess units pay automatically once the primary line is adjudicated
   • D.The excess units may be split onto a second line with an appropriate modifier

   MAI 1 is a claim-line edit whose excess units may sometimes be reported on another line with an appropriate modifier, and MAI 3 units may be paid on appeal with documentation supporting medical necessity. MAI 2 is an absolute date-of-service edit grounded in regulation or anatomic impossibility, so units above the value are never payable.

   Source: CMS Medically Unlikely Edits — MUE Adjudication Indicator (MAI) values 1, 2 and 3Report a problem with this question

5. 5. A PTP edit with modifier indicator 1 rejects a line, but the operative note documents only one procedure at one site. What should the coder do?

   • A.Report the Column 1 code alone, because the record documents no distinct service✓ Answer
   • B.Append an X{EPSU} modifier instead, since it overrides the edit more reliably
   • C.Bill the Column 2 code to the patient, since the payer refused to cover it
   • D.Append modifier 59 to the Column 2 code so that the line clears the edit

   A modifier indicator of 1 permits a bypass only when the documentation shows a genuinely distinct service — a different session, site, lesion, incision or injury. Appending any modifier to force a line through an edit that the record does not support is unbundling and violates the AHIMA Standards of Ethical Coding.

   Source: CMS NCCI Policy Manual, Chapter I (modifier use with PTP edits); AHIMA Standards of Ethical CodingReport a problem with this question

6. 6. Which situation is an example of unbundling?

   • A.Reporting a service twice on one claim after the first line was never paid
   • B.Reporting the components of a single bundled service separately to raise payment✓ Answer
   • C.Reporting one comprehensive code when the payer's fee schedule pays less for it
   • D.Reporting a higher-level service than the documentation in the record supports

   Unbundling, also called fragmentation, is reporting separately the components that a single comprehensive code already includes, in order to increase reimbursement. Reporting a level above what the record supports is upcoding, and repeating a line on the same claim produces a duplicate, not an unbundling, problem.

   Source: CMS NCCI Policy Manual, Chapter I (unbundling/fragmentation); CPT 'separate procedure' conventionReport a problem with this question

7. 7. A physician performs a minor procedure and at the same visit provides a significant, separately identifiable evaluation and management service. Which modifier is appended to the E/M code?

   • A.Modifier 59, which identifies a distinct procedural service on that date
   • B.Modifier 25, which identifies a separately identifiable E/M on the same day✓ Answer
   • C.Modifier 91, which identifies a medically necessary repeat laboratory test
   • D.Modifier 76, which identifies a repeat procedure by the same physician

   Modifier 25 separates an evaluation and management service from a procedure performed the same day, and requires work above and beyond the usual pre- and post-procedure care. Modifier 59 separates two procedures from each other, 91 marks a medically necessary repeat laboratory test, and 76 marks a repeat procedure by the same physician.

   Source: CPT Appendix A — Modifier 25 (contrasted with modifiers 59, 76 and 91)Report a problem with this question

8. 8. A hospital's denial log shows that one payer's medical-necessity denials cluster on a single outpatient service line. What is the most productive use of that pattern?

   • A.Write off the affected balances and stop reporting that service to the payer
   • B.Add the payer's covered diagnosis codes to future claims for that service
   • C.Appeal each denied claim individually and take no further action on the trend
   • D.Educate coders and providers on the documentation that payer's policy requires✓ Answer

   Denial data is a prevention tool: trending by reason code and by payer identifies a fixable root cause, and front-end education on what the coverage policy requires the record to show stops the denials from recurring. Adding diagnoses drawn from a coverage list rather than from the record is coding to the policy, which is prohibited.

   Source: AHIMA CCA Exam Content Outline (2022), Domain 2 tasks 10–11 (evaluate and process claim denials)Report a problem with this question

9. 9. A documented, medically appropriate service was performed, but the payer denied it as not reasonable and necessary. What establishes medical necessity on the claim?

   • A.The place of service and the revenue code assigned to the line
   • B.The procedure code, whose descriptor defines the covered indication
   • C.The provider's attestation in the record that it was necessary
   • D.The diagnosis linked to the service line, which must justify it✓ Answer

   Medicare pays only for items and services that are reasonable and necessary for the diagnosis or treatment of illness or injury, and that necessity is demonstrated by the ICD-10-CM diagnosis reported and linked to the service. A service can be performed perfectly well and still be non-covered when no supporting diagnosis appears on the line.

   Source: Social Security Act §1862(a)(1)(A) — 'reasonable and necessary' coverage standardReport a problem with this question

10. 10. A Medicare Administrative Contractor's local policy covers a service in a way that conflicts with an existing national coverage determination. Which rule governs?

    • A.The contractor's policy governs, because local jurisdictions adjudicate the claim
    • B.The more recent of the two documents governs regardless of who issued it
    • C.The national determination governs, and the local policy may only fill its gaps✓ Answer
    • D.The policy the provider cites at the time of billing governs the claim

    A national coverage determination is issued by CMS and binds every jurisdiction, while a local coverage determination is issued by a MAC and applies only within that contractor's jurisdiction. A MAC may not adopt local policy that conflicts with an NCD; local policy may address only the questions the NCD leaves open.

    Source: Social Security Act §1862(l); CMS Program Integrity Manual, Chapter 13 (LCDs may not conflict with an NCD)Report a problem with this question

11. 11. Since 2019, where does a coder find the ICD-10-CM codes that support coverage for a service addressed by a local coverage determination?

    • A.In the NCCI Policy Manual chapter covering the relevant body system
    • B.In the determination itself, which lists covered and non-covered codes
    • C.In the remark codes returned on the remittance with the denied line
    • D.In the companion local coverage article for billing and coding✓ Answer

    Since the 2019 reform, local coverage determinations contain only reasonable-and-necessary language; the covered and non-covered ICD-10-CM and CPT/HCPCS code lists were moved into companion local coverage billing and coding articles. The article is therefore where diagnosis-to-service linkage is verified before submission.

    Source: CMS Program Integrity Manual, Chapter 13 — 2019 LCD reform and Local Coverage Billing and Coding ArticlesReport a problem with this question

12. 12. The record documents a service, but the only diagnosis documented does not support coverage and the physician's note is ambiguous about the patient's condition. What should the coder do?

    • A.Assign a diagnosis from the coverage policy's list so the claim will pay
    • B.Query the physician, offering the clinically reasonable options without leading✓ Answer
    • C.Hold the claim and let the billing department choose a payable diagnosis
    • D.Submit the claim as coded and appeal the medical-necessity denial

    Ethical coding requires every code to be supported by the health-record documentation, and when documentation is conflicting, ambiguous or incomplete the correct step is a compliant query that presents the clinically reasonable options without steering the answer. Choosing a diagnosis from a coverage list to secure payment is prohibited.

    Source: AHIMA Standards of Ethical Coding, Standards 1, 4 and 6 (documentation support and non-leading queries)Report a problem with this question

13. 13. Which practice makes an Advance Beneficiary Notice of Noncoverage invalid for shifting liability to a Medicare fee-for-service patient?

    • A.Having the beneficiary or a representative sign and date the notice
    • B.Issuing it routinely to every patient at registration as a standing practice✓ Answer
    • C.Delivering it far enough before the service for the patient to decide
    • D.Naming the specific item, the specific reason it may be denied, and a cost estimate

    A valid ABN must be delivered before the service, early enough for a reasoned decision, and must identify the specific item, a specific reason denial is expected, and an estimated cost, and be signed and dated. Blanket or routine notices issued to every patient are prohibited and do not transfer liability.

    Source: CMS Form CMS-R-131 ABN instructions; Medicare Claims Processing Manual, Chapter 30 §50 (routine/blanket ABNs prohibited)Report a problem with this question

14. 14. A Medicare beneficiary signs an ABN and selects Option 1: receive the service and have the claim submitted to Medicare. What does that choice preserve?

    • A.Immunity from any charge for the service until an appeal concludes
    • B.Appeal rights on the resulting denial, with a refund if Medicare pays✓ Answer
    • C.An automatic second review by the contractor without a written request
    • D.A waiver of the patient's liability if the claim is denied as necessary

    Option 1 means the beneficiary wants the item or service, accepts financial responsibility, and requires that the claim be sent to Medicare so a formal determination is issued and can be appealed, with a refund if Medicare ultimately pays. Option 2 receives the service without billing Medicare and forfeits appeal rights; Option 3 declines the service.

    Source: Medicare Claims Processing Manual, Chapter 30 §50.7 — ABN Options 1, 2 and 3Report a problem with this question

15. 15. A service is expected to be denied as not reasonable and necessary, and no ABN was obtained from the beneficiary. Which modifier reports that situation?

    • A.Modifier GX, reporting that a voluntary notice was given to the patient
    • B.Modifier GA, reporting that a required waiver of liability is on file
    • C.Modifier GZ, reporting that no advance notice was issued to the patient✓ Answer
    • D.Modifier GY, reporting an item excluded by statute from any benefit

    GZ reports a service expected to be denied as not reasonable and necessary when no ABN was obtained; such lines are denied automatically and the charge cannot be billed to the patient. GA reports a required ABN on file, GY a statutory exclusion, and GX a voluntary notice, and GA and GX may not appear together on one line.

    Source: Medicare Claims Processing Manual, Chapter 30 §§40, 50 — liability modifiers GA, GX, GY and GZReport a problem with this question

16. 16. On the CMS-1500 claim form, what is entered in Box 24E for each service line?

    • A.The letter or letters from Box 21 identifying the supporting diagnoses✓ Answer
    • B.The full ICD-10-CM diagnosis code that supports the service on that line
    • C.The rendering provider's national provider identifier for the line
    • D.The CPT or HCPCS code and up to four modifiers for the service

    Box 24E is the diagnosis pointer. It carries the reference letters A through L assigned to the diagnosis codes listed in Box 21, up to four pointers per line, with the first pointer identifying the primary diagnosis for that line. The ICD-10-CM codes themselves are never retyped into Box 24E.

    Source: NUCC 1500 Health Insurance Claim Form Reference Instruction Manual (version 02/12) — Items 21 and 24EReport a problem with this question

17. 17. On a UB-04, the Type of Bill in Form Locator 4 ends in frequency digit 7. What does that claim represent?

    • A.A void that cancels the previously processed claim entirely
    • B.An interim claim covering the first period of a long stay
    • C.An admit-through-discharge claim covering the whole inpatient stay
    • D.A replacement of a previously processed claim for the same stay✓ Answer

    The third digit of the Type of Bill is the frequency code: 1 is admit-through-discharge, 7 is a replacement of a prior claim, and 8 is a void or cancel. A replacement corrects a claim the payer already adjudicated rather than creating a new original claim, which would produce a duplicate.

    Source: NUBC Official UB-04 Data Specifications Manual — FL 4 Type of Bill, third-digit frequency codesReport a problem with this question

18. 18. A hospital bills an inpatient stay and the physician separately bills her professional service for the same admission. Which statement about the two claims is correct?

    • A.The hospital bills on the CMS-1500 and the physician on the UB-04 form
    • B.Both claims are transmitted electronically in the 837P professional format
    • C.Both claims report ICD-10-PCS codes because the encounter was inpatient
    • D.The hospital claim reports ICD-10-PCS and the physician claim reports CPT✓ Answer

    The UB-04, also called the CMS-1450 and transmitted electronically as the 837I under NUBC specifications, is the institutional claim and carries ICD-10-PCS procedure codes for inpatient stays. The CMS-1500, transmitted as the 837P and maintained by the NUCC, is the professional claim and reports CPT/HCPCS procedures.

    Source: NUBC UB-04 / NUCC CMS-1500 form scope; ICD-10-PCS Official Guidelines (inpatient procedure reporting)Report a problem with this question

19. 19. A clearinghouse returns a claim before the payer adjudicates it because the subscriber identifier is invalid. How should the biller treat it?

    • A.As a patient-responsibility balance the patient must now be billed for
    • B.As a denial with appeal rights, filed within the payer's appeal window
    • C.As a rejection to be corrected and resubmitted as an original claim✓ Answer
    • D.As a contractual write-off, since the payer never accepted the charges

    A rejection occurs before adjudication, so no determination was made, no remittance advice with adjustment reason codes is issued, and no appeal rights attach. The claim is corrected and resubmitted as an original claim, and it must still reach the payer inside the original timely-filing window.

    Source: Medicare Claims Processing Manual, Chapter 29 §10 — claims returned as unprocessable/rejected are not initial determinations and carry no appeal rightsReport a problem with this question

20. 20. A remittance advice reduces a line with group code CO and a contractual-adjustment reason. What may the provider do with that balance?

    • A.Hold it pending an appeal, then bill the patient if the appeal fails
    • B.Bill it to the patient, since the payer assigned no payment to the line
    • C.Bill it to the patient's secondary payer as an unpaid primary balance
    • D.Write it off, because the contract bars collecting it from the patient✓ Answer

    The claim adjustment group code identifies who owns the balance. CO is a contractual obligation the participating provider must write off and may not bill to the patient, while PR is patient responsibility such as deductible, coinsurance, copayment, or a non-covered charge backed by a valid ABN.

    Source: X12/WPC Claim Adjustment Group Codes — CO (Contractual Obligation) vs PR (Patient Responsibility)Report a problem with this question

21. 21. A Medicare fee-for-service claim was denied on the initial determination. What is the first appeal level and its filing deadline?

    • A.A hearing before an administrative law judge, within 60 days of that notice
    • B.Redetermination by the Medicare administrative contractor, within 120 days✓ Answer
    • C.Reconsideration by a qualified independent contractor, within 180 days
    • D.Reopening by the contractor for clerical error, within one year of payment

    The Medicare fee-for-service ladder begins with redetermination by the MAC, requested within 120 days of the initial determination, followed by reconsideration by a qualified independent contractor within 180 days, then an ALJ hearing, the Medicare Appeals Council, and judicial review. A reopening corrects clerical errors and is not an appeal level.

    Source: Medicare Claims Processing Manual, Chapter 29; 42 CFR §405.942 (120 days) and §405.962 (180 days)Report a problem with this question

Practice questions based on the AHIMA Certified Coding Associate (CCA) Exam Content Outline, the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and Reporting, and the AHIMA Standards of Ethical Coding. This site is not affiliated with or endorsed by AHIMA. Code sets and their official guidelines are revised every year, so no question here keys a specific code value — always assign codes from the current code books, encoder and official guidelines in effect for the date of service, never from a practice test. Confirm current eligibility and exam requirements with AHIMA before you test. About the CCA credential →