Chapter 1 — Quiz

Twenty-five self-check questions. Answer them before opening the key. All figures are constructed.

Multiple choice

1. A provider charges \$280.00. The contracted allowed amount is \$164.00. What is the contractual adjustment?

  • A. \$164.00
  • B. \$116.00
  • C. \$280.00
  • D. Cannot be determined without knowing the patient's benefit

2. Patient coinsurance is calculated on:

  • A. the billed charge
  • B. the allowed amount
  • C. the plan payment
  • D. the contractual adjustment

3. Which of the following is billed on a UB-04?

  • A. A physician's office visit in an independent practice
  • B. A hospital's emergency department facility services
  • C. An independent laboratory's professional interpretation
  • D. A durable medical equipment supplier's claim to a beneficiary

4. A claim is returned by the clearinghouse for an invalid subscriber ID before reaching the payer. This is:

  • A. a denial with full appeal rights
  • B. a rejection with no adjudication and therefore no appeal rights
  • C. a contractual adjustment
  • D. a partial payment

5. The stage of the revenue cycle at which the money becomes a receivable is:

  • A. registration
  • B. coding
  • C. claim submission
  • D. payment posting

6. In most organizations, the largest single category of preventable denial originates in:

  • A. coding
  • B. the front end — registration, eligibility, and authorization
  • C. payment posting
  • D. collections

7. One emergency department visit generates a facility claim and a professional claim. Both may carry CPT code 99284. This is:

  • A. a duplicate that must be corrected
  • B. correct — the code describes the hospital's resource intensity on one and the physician's work on the other
  • C. only permissible with modifier 59
  • D. an unbundling violation

8. A supply line on a hospital outpatient claim is allowed at \$0.00 with no patient responsibility. The most likely explanation is:

  • A. the claim was denied
  • B. the charge was packaged into the payment for another service
  • C. the patient's deductible absorbed it
  • D. the hospital billed it in error

9. A practice sets its charge for a service at \$96.00. A payer's contracted allowed amount is \$103.50. The practice will be paid:

  • A. \$103.50
  • B. \$96.00
  • C. \$99.75
  • D. \$7.50

10. The timely filing clock generally starts on:

  • A. the date the denial is received
  • B. the date of service
  • C. the date the claim is submitted
  • D. the date the patient's statement is issued

11. The appeal clock generally starts on:

  • A. the date of service
  • B. the date the claim was submitted
  • C. the date of the denial
  • D. the date the biller opens the work queue

12. Which function belongs to the middle revenue cycle?

  • A. Collecting a copay at the window
  • B. Assigning codes from the documentation
  • C. Filing a level-two appeal
  • D. Placing an account with a collection agency

13. A practice collects 20% coinsurance on the charge rather than the allowed amount. The result is:

  • A. an underpayment by the patient
  • B. an overcollection that creates a refundable credit balance
  • C. a contractual adjustment
  • D. no effect, since the amounts reconcile at posting

14. "Balance billing" refers to:

  • A. billing the patient for the contractual adjustment
  • B. billing a secondary payer after the primary pays
  • C. transferring a balance between accounts
  • D. billing for a service not documented

15. Which statement about charges is accurate?

  • A. Raising charges increases revenue on contracted business
  • B. The charge determines the patient's coinsurance
  • C. The charge is an opening figure that most payers replace with a contracted allowed amount
  • D. The charge and the allowed amount are set by the same party

Short answer

16. Write both revenue cycle equations.

17. A patient asks why they received two bills for one emergency department visit. Answer in two sentences without using the words "professional" or "technical."

18. Give one example each of a failure at registration, at charge capture, and at follow-up, and state which is hardest to detect and why.

19. State the difference between a denial and a rejection, and say why the difference is worth money.

20. A colleague says coding down is the safe choice. Give the three-part rebuttal in three sentences.

21. A service is charged at \$450.00 and allowed at \$268.00. The patient has \$100.00 of deductible remaining and 20% coinsurance after that. Compute patient responsibility and plan payment.

22. Name four things a coder is not responsible for.

23. Why should a denial work queue be sorted by appeal deadline rather than by account age or dollar amount? Name the one thing you lose by doing so.

24. Explain, in one sentence each, what the money "is" at the coding stage and at the follow-up stage.

25. In §1.2, the patient owed \$503.00 on \$4,522.00 in charges. Express that as a percentage of charges and as a percentage of the allowed amount, and say which of the two is the more meaningful figure and why.

Answer key **1.** B — \$280.00 − \$164.00 = \$116.00. **2.** B — always the allowed amount. This is the most consequential single fact in the chapter. **3.** B — the UB-04 (CMS-1450) is the institutional claim form. **4.** B — a rejection was never adjudicated, so there is no decision to appeal. It must be corrected and resubmitted, and the timely filing clock never stopped running. **5.** C — on submission. Before that the money is a promise; after adjudication it becomes a decision. **6.** B — eligibility, registration, and authorization failures. They are also the cheapest to prevent, which is the whole argument of §1.8. **7.** B — the same five digits describe two different things on two different claims. Facility acuity leveling and professional E/M leveling are separate methodologies and need not produce the same level. **8.** B — packaging. The payment for the primary service is understood to include it. The line is legitimately billed and legitimately allowed at zero, and the patient owes nothing. **9.** B — \$96.00. A payer will not pay more than you asked for. Setting a charge below the contracted allowed amount silently forfeits the difference on every instance, forever, and nothing in the remittance advice will tell you it is happening. **10.** B — the date of service. **11.** C — the date of the denial, which is usually the remittance date and not the date anyone read it. **12.** B. **13.** B — overcollection. The credit balance must be refunded, and a knowingly retained overpayment is a compliance exposure (Chapter 31 §31.9), not merely an accounting one. **14.** A — billing the patient for the contractual adjustment. Prohibited on in-network services by essentially every network contract, and now restricted in specified out-of-network situations by federal law (Chapter 32 §32.4). **15.** C. **16.** Charge − Allowed = Contractual adjustment. Allowed − Patient responsibility = Plan payment. **17.** Model answer: "The hospital billed for the room, the nurses, the supplies, and the X-ray equipment. The doctor who actually stitched your hand works for a separate group and bills for their own work — so it's one visit, two organizations, two bills, and neither one includes the other's charges." **18.** Registration: a terminated policy not caught at the desk. Charge capture: an injection performed and never charged. Follow-up: a denial that expires unworked. **Charge capture is hardest to detect**, because it produces no denial, no report, and no meeting — only an absence. It is invisible until someone reconciles the schedule against the charge file. **19.** A denial is an adjudication decision and carries appeal rights. A rejection means the claim was never adjudicated — it is not in the payer's system, nobody is working it, and it is often sitting in a report nobody opens while the filing clock runs out. **20.** Accuracy: a code that understates the service is as inaccurate as one that overstates it. Financial: it forfeits earned revenue on every instance and distorts every metric built on it. Compliance: a false record is a false record in either direction, and "I coded lower" is not a defense — it also corrupts quality and risk-adjustment data downstream. **21.** Deductible \$100.00, then coinsurance on \$168.00 (\$268.00 − \$100.00) at 20% = \$33.60. **Patient \$133.60; plan \$134.40.** Check: \$133.60 + \$134.40 = \$268.00 ✓ **22.** The clinical decision; whether the service is covered; the practice's revenue; fixing the note. (A coder may query; a coder may not write.) **23.** Because value is destroyed by deadline expiry, not by age or size — a \$1,200 denial with 60 days left is safer than a \$140 denial with 3 days left. **What you lose:** the natural tendency of age-sorted queues to surface the largest and oldest balances first, so a deadline-sorted queue needs a secondary sort by value inside each deadline band. **24.** At coding, the money is a **claim** — a factual assertion and a legal certification. At follow-up, it is a **recovery**, or it is not. **25.** \$503.00 ÷ \$4,522.00 = **11.1%** of charges. \$503.00 ÷ \$1,515.00 = **33.2%** of the allowed amount. The second is the meaningful figure, because the allowed amount is the only number in the transaction that anyone actually agreed to. The percentage-of-charges figure looks reassuring and means nothing, because the denominator is arbitrary.