20 Revenue Cycle & Reimbursement Practice Questions & Answers

1. 1. A practice's denial report shows that most denials come from coverage that had already terminated before the date of service. Which revenue cycle step, performed correctly, would prevent most of these denials?

   • A.Resubmitting the claim to the same payer under a new number
   • B.Appealing each denial after the remittance advice arrives
   • C.Verifying insurance eligibility before each scheduled encounter✓ Answer
   • D.Transferring the balance to the patient as soon as it denies

   Eligibility is a front-end step: coverage can change or terminate between visits, so it is verified before the encounter and re-verified at every visit. Back-end work such as appealing or rebilling cannot recover coverage that did not exist on the date of service, which is why front-end verification failures are the leading avoidable cause of denials.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (verify insurance and eligibility in the EHR)Report a problem with this question

2. 2. A clearinghouse returns a claim to the practice before the payer has adjudicated it because the subscriber ID is invalid. What is the correct way to handle this claim?

   • A.File a written appeal with the payer's appeals department
   • B.Correct the subscriber ID and submit the claim again✓ Answer
   • C.Post a zero payment and bill the balance to the patient
   • D.Write the charge off to the practice as a contractual adjustment

   A claim stopped by front-end or clearinghouse edits is rejected, not denied: it never entered adjudication, so no payer decision exists to appeal. The correction is made and the claim is transmitted again as a new submission, whereas an appeal is the remedy only for a claim the payer adjudicated and refused.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (claims submission procedures; Electronic Data Interchange)Report a problem with this question

3. 3. After a claim is adjudicated, the payer issues adjudication results to two parties. Which document goes to which party?

   • A.The Explanation of Benefits goes to the provider; the Remittance Advice goes to the patient
   • B.Both the Explanation of Benefits and the Remittance Advice go to the patient
   • C.Both the Explanation of Benefits and the Remittance Advice go to the provider
   • D.The Explanation of Benefits goes to the patient; the Remittance Advice goes to the provider✓ Answer

   Both documents report the same adjudication decision, but they are addressed to different recipients: the Explanation of Benefits informs the patient or subscriber of how the claim was processed, while the Remittance Advice, sent electronically as the 835 transaction, tells the provider what was allowed, adjusted and paid so the payment can be posted.

   Source: CMS Medicare Claims Processing Manual, remittance advice; HIPAA standard transactions, 45 CFR Part 162Report a problem with this question

4. 4. A practice dispenses a walker to a patient during an office visit and must report the walker itself on the claim. Which code set is used for that item?

   • A.HCPCS Level II codes✓ Answer
   • B.ICD-10-CM codes
   • C.CPT Category III codes
   • D.ICD-10-PCS codes

   Each code set answers a different question, and HCPCS Level II, maintained by CMS, exists for the supplies, durable medical equipment, drugs and transport that CPT does not cover. HCPCS Level I is CPT itself, maintained by the AMA for professional procedures and services; ICD-10-CM reports diagnoses, and ICD-10-PCS reports inpatient hospital procedures only.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (types of codes; structure of coding and classification systems); CMS HCPCS Level IIReport a problem with this question

5. 5. In claims processing, what does code linkage mean?

   • A.Matching the billed charge on the claim to the payer's fee schedule
   • B.Pairing each procedure code with the diagnosis that justifies the service✓ Answer
   • C.Joining a procedure code to the modifier that describes how it was done
   • D.Connecting the patient's account number to the guarantor's account record

   Code linkage is how a claim demonstrates medical necessity: each procedure or service line must point to the diagnosis that explains why the service was needed. When the linked diagnosis does not support the service, the payer treats it as not medically necessary and denies that line even though both codes are individually valid.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (medical necessity and code linkage)Report a problem with this question

6. 6. A provider's note documents a brief, problem-focused visit, but the charge slip entered into the system shows a higher-level office visit. What should the EHR specialist do?

   • A.Submit the higher level, because the provider chose the charge slip entry
   • B.Bill the visit at a lower level and note the change on the claim
   • C.Amend the progress note so that it matches the level on the charge slip
   • D.Query the provider to reconcile the note and the charge before billing✓ Answer

   Documentation accuracy drives reimbursement: a service that the record does not support is not billable, and the remedy is always to resolve the discrepancy with the provider rather than move the code or the note. Submitting the unsupported higher level is upcoding, and altering the note to fit the charge falsifies the record; both are fraud rather than optimization.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (link between documentation accuracy and reimbursement; verify diagnoses and procedural descriptions)Report a problem with this question

7. 7. Under the National Correct Coding Initiative, what does a Medically Unlikely Edit limit?

   • A.The units of service reported for one code, one patient, one date✓ Answer
   • B.The number of claims a provider may submit for one patient monthly
   • C.The pairs of codes that may be reported together on one date
   • D.The dollar amount a payer will allow on a single service line

   NCCI has two edit types with different targets: Medically Unlikely Edits cap the units of service for a single code for one beneficiary on one date, catching quantity and keying errors, while Procedure-to-Procedure edits stop two codes from being reported together and target unbundling. Neither edit sets an allowed amount, and an Advance Beneficiary Notice cannot be used to shift liability in an NCCI situation.

   Source: CMS National Correct Coding Initiative Policy Manual (Medically Unlikely Edits; Procedure-to-Procedure edits)Report a problem with this question

8. 8. A Medicare claim is expected to be denied because the service is not reasonable and necessary for the patient's diagnosis. What must the practice do to hold the beneficiary financially responsible?

   • A.Add a modifier to the procedure line so the claim bypasses the edit
   • B.Obtain a prior authorization number from the Medicare contractor
   • C.Bill the beneficiary once the remittance advice shows the denial
   • D.Issue an Advance Beneficiary Notice of Noncoverage before the service✓ Answer

   The Advance Beneficiary Notice of Noncoverage transfers financial liability only if the beneficiary is informed and signs before the service is furnished, because its purpose is to let the patient make an informed choice about accepting the cost. Once the service has been delivered without that notice, the provider generally absorbs the charge and may not bill the beneficiary.

   Source: CMS Advance Beneficiary Notice of Noncoverage (Form CMS-R-131) instructionsReport a problem with this question

9. 9. What is the role of the superbill, also called the encounter form or charge slip, in the revenue cycle?

   • A.It is the statement sent to the guarantor showing the balance due
   • B.It is the claim form transmitted to the payer for adjudication
   • C.It is the payer's advance approval of the services planned for the visit
   • D.It is the record of services rendered so charges can be entered✓ Answer

   The superbill is an internal charge capture document, not a claim: it lists the practice's commonly used procedure and diagnosis codes with fees so that what happened at the visit becomes a billable charge in the system. Because it never goes to the payer as a claim, a service missed on the superbill becomes revenue that is simply never billed.

   Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (navigate the EHR to create a superbill, encounter form or charge form)Report a problem with this question

10. 10. A real-time eligibility inquiry is sent from the practice management system before a scheduled visit. What does the payer's response provide?

    • A.The final allowed amount and the payment the practice will receive
    • B.Active coverage, cost-sharing amounts and authorization requirements✓ Answer
    • C.An approval number that guarantees payment for the planned service
    • D.The diagnosis codes the payer considers medically necessary

    Real-time eligibility runs the 270 inquiry and returns the 271 response, which confirms whether coverage is active on the date of service and reports plan dates, copayment, coinsurance, remaining deductible and whether authorization is required. It is a benefits check, not an adjudication, so it cannot state the final allowed amount or guarantee payment for a specific service.

    Source: HIPAA standard transactions, 45 CFR Part 162 (270 eligibility inquiry and 271 response)Report a problem with this question

11. 11. A child is covered as a dependent under both parents' health plans. Under the birthday rule, which plan is primary?

    • A.The plan of the parent whose birthday falls earlier in the calendar year✓ Answer
    • B.The plan of the parent who is older by year of birth
    • C.The plan that has been in effect for the longer period of time
    • D.The plan of the parent who is listed first on the registration form

    Coordination of benefits uses the month and day of the parents' birthdays only, so the parent whose birthday comes first in the calendar year holds the primary plan regardless of which parent is older. Registering the wrong plan as primary sends the claim to the secondary payer first, which produces a denial and delays payment on both claims.

    Source: NAIC Coordination of Benefits Model Regulation (birthday rule for dependent children)Report a problem with this question

12. 12. A payer reviews a proposed service and issues a non-binding estimate of what it would pay, without committing to cover the service. What is this called?

    • A.A prior authorization
    • B.A predetermination of benefits✓ Answer
    • C.A referral
    • D.A coordination of benefits review

    A predetermination is only an advance estimate of benefits and creates no obligation for the payer, which is why it cannot substitute for an authorization when one is required. A prior authorization is the payer approving a service in advance, a referral is the primary care provider directing the patient to a specialist, and coordination of benefits decides which of two plans pays first.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (procedures for prior authorizations and pre-authorizations; payer authorization policies)Report a problem with this question

13. 13. A payer authorized a set number of physical therapy visits, and the patient attended more visits than were approved. What happens to the extra visits when they are billed?

    • A.They are rejected before adjudication and may simply be resubmitted
    • B.They are denied, because they exceed the approved units✓ Answer
    • C.They are paid at the out-of-network rate under the same authorization
    • D.They are paid, because the authorization number appears on the claim

    An authorization approves specific codes, a specific number of units or visits, and a specific date range, so services beyond any of those limits fall outside the approval and are denied on adjudication. This is why the approved codes, units and effective and expiration dates are documented in the record and tracked against the visits actually delivered.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (obtain and document authorizations in the EHR)Report a problem with this question

14. 14. Which claim format does a physician practice use to bill professional services electronically?

    • A.The 270, whose paper equivalent is the UB-04
    • B.The 837P, whose paper equivalent is the CMS-1500✓ Answer
    • C.The 835, whose paper equivalent is the CMS-1500
    • D.The 837I, whose paper equivalent is the UB-04

    Professional claims from physicians and other individual providers are submitted on the 837P, the electronic form of the CMS-1500, while institutional claims from hospitals and facilities use the 837I, the electronic form of the UB-04 (CMS-1450). The 835 is the remittance advice returning to the provider and the 270 is an eligibility inquiry, so neither carries charges to the payer.

    Source: HIPAA standard transactions, 45 CFR Part 162; CMS Medicare Claims Processing Manual (CMS-1500 and CMS-1450 claim forms)Report a problem with this question

15. 15. What does a clearinghouse do with the claims it receives from a practice?

    • A.Scrubs them against payer edits and forwards them to the payers✓ Answer
    • B.Holds them until the payer's timely filing period has expired
    • C.Assigns the diagnosis and procedure codes for each claim line
    • D.Adjudicates them and issues the resulting payment to the practice

    A clearinghouse is an intermediary that validates and reformats claims against payer-specific requirements before transmitting them, returning errors to the practice quickly so they can be fixed. Because adjudication and payment remain the payer's function, catching a claim at the clearinghouse costs far less time than a denial discovered weeks later on a remittance advice.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (claims submission procedures; Electronic Data Interchange)Report a problem with this question

16. 16. A plan pays a service subject to 20% coinsurance after the deductible is met. The patient's coinsurance is calculated on which figure?

    • A.The remaining balance of the patient's annual deductible
    • B.The monthly premium the subscriber pays for coverage
    • C.The provider's billed charge for the service
    • D.The allowed amount for the service under the payer's contract✓ Answer

    Coinsurance is a percentage of the contracted allowed amount, not of the gross charge, because the allowed amount is the maximum the payer and provider agreed the service is worth. Estimating from the billed charge overstates what the patient owes, and it is the fixed-dollar copayment, not coinsurance, that is collected at check-in.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (health insurance terminology; fee schedules)Report a problem with this question

17. 17. A participating provider bills $200 for a service and the payer's allowed amount is $120. What must happen to the $80 difference?

    • A.Written off as a contractual adjustment on the account✓ Answer
    • B.Appealed to the payer as an underpayment on the claim line
    • C.Applied to the patient's annual deductible for the plan year
    • D.Billed to the patient as the balance remaining on the account

    By signing a participating provider agreement, the practice accepts the payer's allowed amount as payment in full, so the difference between the charge and the allowed amount is a contractual adjustment the practice absorbs. Billing that difference to the patient is balance billing, which the participating agreement prohibits; the patient still owes only the deductible, copayment or coinsurance calculated from the allowed amount.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (fee schedules; health insurance terminology); CMS Medicare Claims Processing Manual, participating provider assignmentReport a problem with this question

18. 18. A minor patient is covered under her father's policy, and her mother is recorded as the guarantor on the account. To whom is the patient statement addressed?

    • A.The payer, as the party that adjudicated the claim
    • B.The father, as the subscriber named on the policy
    • C.The mother, as the guarantor recorded on the account✓ Answer
    • D.The patient, as the person who received the services

    The guarantor is the person who accepted financial responsibility for the account, and the statement follows financial responsibility rather than insurance or treatment. The subscriber holds the policy and the patient received the care, but neither role determines who is billed for the remaining balance after the payer has adjudicated.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (guarantors; navigate the EHR to provide patient statements)Report a problem with this question

19. 19. A patient asks the specialist what a scheduled procedure will cost her. On what should the estimate be based?

    • A.Last year's payment for the service and the plan's deductible limit
    • B.The practice's gross charge and the patient's monthly premium
    • C.The contracted allowed amount and the patient's remaining cost sharing✓ Answer
    • D.The national average payment and the patient's copayment amount

    A patient estimate is built from the payer's fee schedule, which sets the contracted allowed amount for each code, combined with the deductible, copayment and coinsurance the eligibility response reports as still owed. Estimating from the gross charge overstates the patient's share, since the participating provider never collects the amount written off as a contractual adjustment.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (provide estimated patient costs; fee schedules)Report a problem with this question

20. 20. A remittance advice shows one claim line paid at zero with a denial reason code. How should that line be handled in the system?

    • A.Transfer the full charge to the patient without any further review
    • B.Delete the charge line so the account balances to the day's receipts
    • C.Post a zero payment with the denial reason on the charge line✓ Answer
    • D.Leave the charge line open until an appeal has been decided

    Non-payment must be documented just as payment is: posting a zero payment with the reason and remark codes closes the adjudication loop, keeps the ledger reconcilable against the day's receipts, and creates the record that drives appeal or rebilling. Deleting the line destroys the audit trail, and moving the balance to the patient before reviewing the reason can bill the patient for something the payer's contract does not allow.

    Source: NHA CEHRS Test Plan, Revenue Cycle/Finance (documentation for payment and non-payment; balance reconciliation)Report a problem with this question

Practice questions based on the NHA CEHRS Test Plan, the HIPAA Privacy and Security Rules (45 CFR Part 164), and the HITECH Act. This site is not affiliated with or endorsed by the National Healthcareer Association. Every electronic health record system arranges its own screens and menus, so workflows here are described in general terms — follow your own system's documentation and your facility's policies. Record-retention periods, permissible abbreviations, and many release-of-information details are set by state law and facility policy rather than federally, and penalty amounts are adjusted over time; verify all of these against current sources rather than against a practice test. Confirm current eligibility and exam requirements with NHA before you test. About the CEHRS certification →