Chapter 3 — Exercises

Items marked † have worked solutions in Answers to Selected Exercises, along with every odd-numbered item. All fee schedule amounts are constructed; verify current values before using any of them.

A. Recall and vocabulary

3.1 Name the four channels through which Medicare's methodology reaches claims where Medicare is not the payer.

3.2 State what each of Parts A, B, C, and D covers, and which claim form each is billed on where applicable.

3.3 † Explain the Part A benefit period. How many Part A deductibles can a beneficiary owe in one calendar year, and what determines it?

3.4 What is the out-of-pocket maximum in Original Medicare? Explain the consequence of your answer.

3.5 List five things a Medicare Administrative Contractor does and two things it does not.

3.6 † Distinguish participating, non-participating, and opt-out status. For each, state how the provider is paid and by whom.

3.7 Distinguish a national coverage determination from a local coverage determination. Which document usually carries the list of covered ICD-10-CM codes?

3.8 Distinguish a statutorily excluded service from one that is not reasonable and necessary. Why does the distinction matter operationally?

3.9 Name five things that change operationally when a patient is enrolled in Medicare Advantage rather than Original Medicare.

3.10 † State the two Medicare Secondary Payer employee-count thresholds and which entitlement basis each attaches to.

3.11 What is a Qualified Medicare Beneficiary, and what may a provider not do?

3.12 Why must Medicaid eligibility be verified at every visit rather than periodically?

B. Applied arithmetic

3.13 † The participating fee schedule amount for a service is \$260.00. Compute: (a) the non-participating amount; (b) the limiting charge; (c) what Medicare pays a participating provider who accepts assignment, assuming the deductible is met; (d) what the beneficiary owes in that case; (e) what a non-participating provider who does not accept assignment collects, and from whom; (f) the beneficiary's net out-of-pocket in case (e).

3.14 Repeat 3.13 for a participating amount of \$88.00 and again for \$1,450.00. At which amount is the dollar advantage of non-participation without assignment largest, and is the percentage advantage the same in all three cases?

3.15 † A Medicare Summary Notice line shows: charged \$640.00, Medicare-approved \$318.00, Medicare paid \$254.40, maximum you may be billed \$63.60. Verify every figure and identify the assumption the notice is making.

3.16 Using the Encounter's Medicare counterfactual, compute what the patient would owe if the Part B deductible had not been met and \$140.00 of it remained. Show the full table.

3.17 † A practice's payer mix is 46% commercial, 34% Medicare, 14% Medicaid, and 6% self-pay. Using the Encounter's allowed amounts (\$216.28 commercial, \$168.24 Medicare) and assuming Medicaid allows 62% of the Medicare amount and self-pay collects 30% of charges, compute the blended expected collection on 1,000 identical encounters.

C. Read the document

3.18 A remittance advice from a Medicare Administrative Contractor denies a claim with a reason code indicating the claim is not covered by this payer or contractor. Name the most likely cause, the second most likely, and the one check that would have prevented both.

3.19 † You find an LCD through a search engine that appears to cover the service you are asking about, and its covered-diagnosis list does not include your patient's diagnosis. List four things you must verify about that document before you rely on it.

3.20 A Medicare Summary Notice shows "maximum you may be billed" as \$41.20. Your practice's statement to that patient says \$67.90. Give three possible explanations, and say which one is legitimate.

3.21 † A patient presents a card reading "[Large National Insurer] Medicare Advantage HMO" and also a red-white-and-blue Medicare card. Where do you send the claim, and what would happen if you sent it to the other one?

D. Judgment and process

3.22 † Your practice is deciding whether to participate in Medicare for the coming year. Write the five-point analysis you would give the owners, covering revenue per service, collection burden, patient impact, administrative consequences, and the risk you would flag.

3.23 A physician wants to bill a Medicare beneficiary directly, at the practice's full charge, for a service Medicare covers, "because Medicare's rate is insulting." Explain what statuses would and would not permit this, and what the practice would have to do first.

3.24 † Your billing system routinely transfers Medicare coinsurance balances to patient statements after the remittance posts. Explain why this is a compliance problem for a specific subset of patients, and design the control that fixes it.

3.25 A colleague says "we don't need to check eligibility for Medicare patients — Medicare is Medicare." Give three counterexamples from this chapter.

3.26 † Your practice keeps getting denials from a commercial payer for a code combination and the payer's policy is not published anywhere you can find. Describe your investigation, in order, and say what you expect to find.

E. Certification-style questions

3.27 † The participating Medicare fee schedule amount for a procedure is \$400.00. What is the limiting charge?

  • A. \$460.00
  • B. \$437.00
  • C. \$380.00
  • D. \$420.00

3.28 Medicare Part B covers all of the following except:

  • A. physician office visits
  • B. outpatient hospital services
  • C. inpatient hospital room and board
  • D. durable medical equipment

3.29 † A 70-year-old beneficiary is actively working for an employer with 45 employees and is covered by the employer group health plan. Which is primary?

  • A. Medicare
  • B. The group health plan
  • C. Whichever adjudicates first
  • D. Medicare, with the group health plan as secondary

3.30 A document published by a Medicare Administrative Contractor stating whether an item or service is reasonable and necessary within its jurisdiction is a(n):

  • A. national coverage determination
  • B. local coverage determination
  • C. Advance Beneficiary Notice
  • D. Medicare Summary Notice

3.31 † A provider may not bill which of the following for Medicare deductibles and coinsurance?

  • A. any dual-eligible beneficiary
  • B. a Qualified Medicare Beneficiary
  • C. any Medicaid recipient
  • D. any beneficiary over 75

3.32 Medicaid is best described as:

  • A. a federal program administered uniformly nationwide
  • B. a joint federal-state program administered by the states, and the payer of last resort
  • C. a supplement to Medicare for beneficiaries over 65
  • D. a private insurance product sold under federal contract

3.33 † An Advance Beneficiary Notice of Noncoverage is appropriately issued when:

  • A. a service is statutorily excluded from Medicare
  • B. a normally covered service is expected to be denied as not reasonable and necessary
  • C. every time a Medicare beneficiary is seen, as a routine protection
  • D. the patient has exhausted their Part A benefit period

F. Write it

3.34 † Write the 90-word explanation a front desk gives a patient who says "I have Medicare" while handing over a Medicare Advantage card, when the practice is not in that plan's network.

3.35 Draft the one-page reference card your practice would post for Medicare Secondary Payer determination. It must fit on one page and be usable by someone who has not read this chapter.

3.36 Write the two-sentence note you would put in an account when you have confirmed a patient's QMB status, so that the next person to touch the account does not bill them.

G. The Encounter

3.37 † Verify every figure in the Medicare counterfactual table independently, including both checks. Then compute the percentage difference between the commercial and Medicare allowed amounts for each of the four lines separately. Is the discount uniform across lines? What does the answer suggest?

3.38 The chapter observes that the Medicare beneficiary owes less than the commercial patient (\$33.65 versus \$47.58) and attributes it to the copay. Construct a variant of the Encounter in which the commercial patient would owe less than the Medicare beneficiary, changing only the benefit design.

3.39 † Suppose Account 10-4471's patient were a dual eligible with QMB status, in Original Medicare, with Medicaid secondary. Medicaid's allowed amount for these services is below what Medicare already paid. Compute what the practice collects and what the patient may be billed, and state the rule that governs the second answer.

3.40 Update your Encounter Workbook (Appendix C) with the Medicare counterfactual. In your own words, write one sentence explaining why a practice's payer mix determines whether it is financially viable, using the two numbers from this chapter.