Chapter 40 — Exercises

How to use these. This is the last exercise set in the book and it is deliberately unlike the others. Sections A and B ask you to reproduce the capstone arithmetic and then break it — to change one input at a time and watch the conclusion move, because a conclusion you cannot move is a conclusion you have memorized rather than understood. Section C is the one that matters after you close this book: it asks you to compute a break-even from your own numbers, and then to be honest about which of them you do not actually have. Sections D through G are the career half, and every item in them is something you can do rather than something you can recite. Section J is the thirty-day plan, and it is an assignment with a date on it.

Items marked † have worked solutions in the answers appendix. No answers appear in this file.

⚠️ Two standing cautions. First: every dollar figure in this chapter is constructed. \$36.00 per hour, 58 minutes, 68%, and the 41% that follows from them are Northgate Family Medicine's numbers in a teaching example, and Northgate is not real. The method is what transfers; the numbers are not yours and are not anyone's. Second: this chapter states no salary figure, job-growth statistic, or survey result, and neither should your answers. Where an exercise asks about compensation or demand, the correct answer names the source and its limits — it never quotes a number this book did not publish, because this book did not publish one.

Section A — The complete file (items 1–5)

A.1 Without looking back at §40.1, list from memory the documents and decisions that make up Account 10-4471's complete file, in the order the file was built. Then check your list against §40.1's table and mark the ones you missed. The ones you missed are the parts of the revenue cycle you have learned least well — write down which chapters own them.

A.2 † §40.1 runs a check the book had never run before: \$70.30 + \$98.40 = \$168.70, the plan column arriving in two pieces forty-nine days apart. Run the two matching checks for the patient column across the same two remittances — what she paid on day 0, what moved to her on day 66, and what she paid on day 100 — and show that they foot to \$47.58. State which of the three amounts was a prediction and which two were facts at the time they occurred.

A.3 §40.1 says the finished file proves the claim was defensible "from every chair," and then says what it does not prove. In your own words, write the three things it does not prove, and for each one name a chapter that supplies the evidence.

A.4 The audit in Chapter 37 §37.11 produced exactly one finding, scored category 4 — supported but fragile. Explain why a category-4 finding produces no repayment and is still worth writing down, and then explain why the same sentence was found independently by an appeal writer in Chapter 30. What does it say about an organization when two different controls point at the same defect?

A.5 † A colleague reads §40.1 and says: "This file went right, so it isn't a useful teaching example. Show me one that went wrong." Write the two-paragraph reply. The first paragraph should agree with the part of her objection that is correct. The second should explain why a file where everything went right is the only file that can isolate the cost this chapter measures.

Section B — What it cost and what it earned (items 6–11)

B.1 Reproduce §40.2's cost calculation from the four published inputs without looking at the worked block: the three touches and their minutes, the loaded rate, the allowed amount at issue, and the overturn rate. Cite the chapter and section that published each input.

B.2 † Compute the cost of each touch separately, then state which single touch is the most expensive and why that is not an argument for eliminating it. (Look at what touch 2 actually contains — Chapter 30 §30.11 itemizes its minutes.)

B.3 §40.2 says \$34.80 is not the cost of the claim, not the whole cost of the delay, and not a cost the practice noticed. Take each of the three in turn and say what would have to be measured to capture it. For the third, name the reason it appears nowhere in a general ledger.

B.4 The share matters more than the dollars: 34.80 ÷ 128.40 = 27.1%. Recompute that share for a denied line allowed at \$60.00**, at **\$300.00, and at \$1,200.00, holding the minutes constant. Then state, in one sentence, what the pattern in those four percentages tells a manager about where to look first in a denial queue.

B.5 † Touch 2 took 31 minutes, of which Chapter 30 §30.11 records that 3 minutes came from pulling already-written language out of the practice's appeal-paragraph library and 10 minutes were the only genuinely new drafting. Estimate what the same appeal would have cost with no library at all, state your assumption explicitly, and compute the break-even number of identical appeals at which building the library pays for itself. Say which of your inputs is the one you would least trust.

B.6 §40.2 lists three things the file earned that are not money. Rank them by how long each one keeps producing value, and defend the ranking in three sentences.

Section C — The break-even, and your own (items 12–18)

C.1 In one sentence each, explain (a) why the overturn rate belongs in the denominator and not the numerator, and (b) what would be wrong with the alternative calculation "appeal anything worth more than \$34.80."

C.2 † Derive the break-even allowed amount from \$34.80 and 68%, then run the proof forward the way §40.3 does: show that a line allowed at exactly the break-even returns, in expectation, exactly the labor it consumed. Show every check.

C.3 Recompute the break-even for each of the following, one variable at a time from Northgate's baseline, and say in a phrase what each change means operationally:

  (a) the overturn rate falls to 45%       (everything else unchanged)
  (b) the overturn rate rises to 90%       (everything else unchanged)
  (c) the median denial takes 20 minutes   (everything else unchanged)
  (d) the loaded rate rises to $45.00/hr   (everything else unchanged)
  (e) (c) and (d) together

C.4 † Compute your own break-even. Use real inputs if you have them and honest estimates if you do not — and label which is which. You need three numbers:

  1. YOUR FULLY LOADED HOURLY COST for the person who works denials.
     Not the wage. Wage + payroll taxes + benefits + workstation +
     software + space + supervision. Chapter 31 31.7 says this takes
     an hour with a bookkeeper. If you cannot get it, say so and use
     a stated assumption.

  2. YOUR MEDIAN MINUTES per denial, BY CATEGORY. Not the mean --
     one monstrous denial drags a mean. If you have no log, time the
     next ten and say that is what you did.

  3. YOUR OVERTURN RATE, BY CATEGORY. From your own decided appeals.
     If you do not have it, that is itself the finding.

  THEN:  minutes x rate / overturn rate = your break-even

Write the number, show both checks, and then write the two sentences that matter more than the number: which input you are least confident in, and what you would do this month to make it real.

C.5 Take last month's denial log — your own if you have one, Figure 40.2's if you do not — and sort it by the allowed amount on the denied line. Count how many lines fall below your break-even. Then answer the question the sort raises and the sort cannot answer: what are those lines, by root cause, and which single category is largest?

C.6 † §40.3 runs the alternative and finds that appealing all 110 sub-break-even lines would cost \$3,828.00 of labor to recover an expected \$1,961.12. It then states four reasons that calculation is "the most abusable number in this chapter." Name all four limits, and for each one say whether it moves the true figure up or down. Then state what the calculation is legitimately good for.

C.7 A practice manager reads §40.3 and drafts a policy: "No appeals on denied lines under \$51.18." Using only this chapter's own limits, write three specific objections to that policy as written — one about the number, one about the unit it is applied to, and one about what the policy must still require even when it declines to appeal. Then write the corrected policy in under eighty words.

Section D — Q4, and prevention (items 19–22)

D.1 State Q4 and answer it in one sentence. Then give the three levels of prevention §40.3 names, in order of cost, and say which one is cheapest per claim after it is built and which one is the only one that removes the category entirely.

D.2 † Reproduce the \$102.00 fix calculation from §40.3, then recompute it with your own assumptions about how long each task would take in your organization. State the number of occurrences at which your version pays for itself, and compare it to the book's three.

D.3 §40.3 draws a bright line: an edit may STOP a claim and ask a question; it may not ANSWER the question. Write two scrubber rules for the 99214-25 + 20610 pairing — one that is prevention and one that is an assertion nobody chose. Then explain, in compliance terms rather than technical ones, exactly what makes the second one dangerous. Do not write the non-compliant rule as something a reader could implement — describe what it does and why it is caught, which is how this book treats every scheme.

D.4 §40.3 says prevention on this file "has two forms and only one of them is fully in the practice's hands." Explain the distinction between preventing the denial and preventing the cost of the denial, and give one real example of each from a chapter other than 29, 30, or 40.

Section E — Getting the first job (items 23–27)

E.1 Write your own ninety-second walkthrough of Account 10-4471's denied line, out loud, from memory, and time it. Then have somebody who does not work in this field listen to it and tell you where they got lost. Rewrite it once.

E.2 † §40.4 says a résumé is an attestation. Take one line from your own résumé — or one you would write — and rewrite it three times: once overstated, once accurate, and once accurate with the evidence attached. Then say which of the three survives the follow-up question "tell me about a hard one."

E.3 Chapter 39 §39.10 gives four routes out of the apprentice designation and §40.4 gives a route into the building. Draw the two together as a single twelve-month plan for someone who has passed the exam, has no coding job, and needs to eat. Mark which steps require money and which require only time.

E.4 Pull five real job postings in your market. For each, separate the duties paragraph from the requirements paragraph and mark which of the two you can already do. Then write the one-sentence opening line of a cover letter for the posting where the gap between the two paragraphs is largest.

E.5 † A hiring manager asks what your greatest weakness is. Using §40.4 and §40.5, write an answer that is true, specific, and structurally "here is a thing I get wrong, here is how I detect it, here is what I changed." Then explain in one sentence what quality that structure demonstrates and why this profession selects for it.

Section F — The first ninety days and the standards (items 28–33)

F.1 §40.5 lists four things to find in your first thirty days "because you will need them under pressure." Name all four, and for each, write the exact sentence you would use to ask about it on day three without sounding like you expect trouble.

F.2 † Convert a production standard of 14 charts per hour into minutes per chart. Then, using §40.6's queue model, build a day: assume the same mix of routine charts, real lookups, and queries, and compute what the standard implies about how long you may spend on a chart that needs a guideline checked. State what gets compressed when the day runs late, and why that is the worst possible thing to compress.

F.3 Write out the six questions §40.6 says to ask before accepting a standard. Then, for each, write what a bad answer sounds like — the answer that means the number was inherited rather than built.

F.4 † Two coders in the same department are audited on the same twenty charts. One is measured on code-level accuracy, one on chart-level accuracy. Construct a small example — you may invent the chart counts and error counts, and label them constructed — in which the two coders do identical work and are reported at materially different accuracy rates. State the arithmetic that produces the gap and name the section of Chapter 37 that established it.

F.5 §40.6 says to keep your own record of four things, de-identified. List them, and then write the one-paragraph policy you would follow about what leaves the building with you when you change jobs. Cross-check it against §40.8's compliance callout.

F.6 By day ninety you are asked to bring one measured finding. Write three candidate findings you could plausibly produce in your first quarter in a role you actually might hold, each with the count attached. Then mark which one you would bring first and say why the order matters.

Section G — The ladder, the arrangements, the specialty (items 34–38)

G.1 §40.7 calls the move from lead or auditor to coding manager "the largest and least-prepared-for jump." Name what changes, and then name the three instruments the new manager suddenly owns and has to defend.

G.2 † Take one rung of the ladder above where you are now. Write down (a) the three things somebody in that role does that you currently cannot, (b) how you would get evidence of each, and (c) the single question you would ask a person who holds that job. Then actually ask it.

G.3 §40.8 says the work that "travels most easily" to an outsourced or offshore arrangement is high-volume, structured, and low-variability, and the work that travels least easily is "the work that is an argument." Give three examples of each from this book, and then say what that division implies about which roles grow in an outsourced environment.

G.4 A practice owner says: "We're outsourcing coding, so the compliance exposure moves to the vendor." Write the correction. Name the specific obligations that do not move, cite the chapters, and name the three things a provider organization still has to do about a vendor's work.

G.5 † §40.9 says to specialize in a body of knowledge and never in a configuration. Take a specialty you might plausibly enter and split what you would learn into two columns — portable and expires — with at least four entries in each. Then say which column Case Study 2's professionals had built their careers on.

Section H — Certification-style items (items 39–43)

Written in the style of the CPC and CCS exams where the material is exam-relevant. Note that most of this chapter is not exam material — which is itself the point of item H.5.

H.1 A denied line carries group code CO. The practice determines that the allowed amount is below its written non-appeal threshold and declines to appeal. The correct handling of the balance is to:

• A. Bill the patient for the denied amount
• B. Adjust it off with a code identifying it as a preventable administrative write-off
• C. Adjust it off as a contractual adjustment
• D. Leave it open in accounts receivable until timely filing expires

H.2 Which of the following is the appealable amount on Account 10-4471's line 1?

• A. \$185.00, the charge
• B. \$128.40, the allowed amount
• C. \$56.60, the CO-45 adjustment
• D. \$98.40, the eventual plan payment

H.3 † A coder is held to a quality standard of "95% accuracy." Which single question most changes what that standard requires of her?

• A. How often the audit is performed
• B. Whether the denominator is codes or charts
• C. Who performs the audit
• D. Whether findings are appealable

H.4 Working a denial reveals that an unrelated claim was paid for a service the practice cannot support. The value of the denied line at issue is \$18.00, well below the practice's non-appeal threshold. The threshold:

• A. Permits the practice to disregard the finding, as the amount is de minimis
• B. Applies to the appeal decision and has no bearing on the identified overpayment
• C. Must be recalculated to include the overpayment
• D. Permits a sixty-day extension for small balances

H.5 In one paragraph, explain why almost nothing in §40.3 would appear on a coding certification exam, and why that is not an argument that it matters less. Reference what Chapter 39 §39.1 says a credential does and does not certify.

Section J — The Encounter extension and the thirty-day plan (items 44–47)

J.1 † The Encounter extension. Rerun the entire capstone assembly on a counterfactual: the denial is identical in every respect except that the denied line is 36415, allowed \$3.00, instead of the E/M line. Work it all the way through — the cost to appeal, the expected recovery, the decision, and what the practice should do instead. Then state the one sentence this counterfactual teaches that the real Account 10-4471 cannot.

J.2 Take the completed Appendix C workbook — yours, however far you got — and write the one-page summary you would hand an interviewer. One page. What the file is, what happened to it, what you decided at each of the four decision points, and what you would do differently. No jargon that you cannot immediately unpack if asked.

J.3 Chapter 32 §32.1 named five cases in this book where a patient did everything right and was harmed anyway, and said the last word belonged to Chapter 40. Write that last word yourself — three paragraphs — before you read §40.3's version. Then read §40.3's version and note where you disagree. Your disagreement is worth more than your agreement here.

J.4 Write your thirty-day plan, with dates on it. Use §40.11's four weeks as the structure and adapt it to your actual situation: what you already have, what you cannot do this month, and what you are substituting. Put a real calendar date on every line and a named deliverable at the end of each week. Then give a copy to one other person.

The last instruction in the book, and it is not an exercise. Put a date on J.4 and start it tomorrow. Everything in this chapter that changes anything is in that one item.