Medical Assistant Certification (CMA / RMA) Medical Coding, Billing, and Insurance Syllabus

What is an LCD (Local Coverage Determination)?

A decision by a Medicare Administrative Contractor (MAC) about whether a service is covered (medically necessary) within its regional jurisdiction.

Compare an HMO and a PPO insurance plan.

HMO (Health Maintenance Organization): requires a primary care physician (PCP), referrals for specialists, and use of in-network providers; lower cost. PPO (Preferred Provider Organization): no PCP/referral required, allows out-of-network care at higher cost; more flexible, higher premiums.

What is a Point-of-Service (POS) plan?

A hybrid plan combining HMO and PPO features: it requires a PCP and referrals like an HMO but allows out-of-network care (at higher cost) like a PPO.

What is an EPO (Exclusive Provider Organization)?

A plan that only covers in-network providers (except emergencies) but typically does not require referrals to see specialists.

Define 'premium,' 'deductible,' 'copayment,' and 'coinsurance.'

Premium = amount paid (often monthly) to maintain coverage. Deductible = amount the patient must pay before insurance begins paying. Copayment = fixed dollar amount paid per service. Coinsurance = percentage of the cost the patient pays after the deductible is met.

Who does Medicare cover, and what does each part (A, B, C, D) provide?

Covers people 65+, certain disabled persons, and those with ESRD. Part A = hospital/inpatient. Part B = outpatient/physician services. Part C = Medicare Advantage (private plans). Part D = prescription drugs.

Who administers Medicaid and whom does it cover?

A joint federal-state program (administered by states within federal guidelines) that covers low-income individuals and families based on financial need.

What is TRICARE?

The federal health program for active-duty and retired military service members and their dependents.

What is CHAMPVA?

Civilian Health and Medical Program of the Department of Veterans Affairs; covers dependents/survivors of veterans with permanent total service-connected disabilities.

What is Workers' Compensation?

State-mandated insurance that covers medical expenses and lost wages for employees who suffer job-related injuries or illnesses.

What is insurance 'eligibility verification,' and why is it done before service?

Confirming that a patient's insurance coverage is active and that the planned services are covered, to prevent claim denials and ensure correct billing.

What is preauthorization (prior authorization)?

Approval obtained from the insurer BEFORE a service, procedure, or medication is provided, confirming it is covered/medically necessary. Without it, the claim may be denied.

How does preauthorization differ from precertification and a referral?

Preauthorization = approval that a service is medically necessary/covered. Precertification = confirmation that a service/admission is covered (often for hospitalization). Referral = a PCP's authorization for a patient to see a specialist.

What is Coordination of Benefits (COB)?

The process used when a patient has two or more insurance plans to determine the order in which plans pay, so that total payment does not exceed 100% of the charges.

Under COB's 'birthday rule,' which parent's plan is primary for a dependent child?

The plan of the parent whose birthday (month and day, not year) falls earliest in the calendar year is primary.

What is the CMS-1500 claim form used for?

It is the standard paper claim form used by physicians and non-institutional providers to bill Medicare, Medicaid, and most other payers for professional services.

On the CMS-1500, what type of information is entered in the upper section (Boxes 1-13) versus the lower section (Boxes 14-33)?

Boxes 1-13 contain patient and insured (subscriber) information. Boxes 14-33 contain physician/supplier (provider) and service/billing information.

On the CMS-1500 form, what is reported in Box 21 versus Box 24D?

Box 21 contains the ICD-10-CM diagnosis codes. Box 24D contains the CPT/HCPCS procedure codes and modifiers.

What is the UB-04 claim form, and how does it differ from the CMS-1500?

The UB-04 (CMS-1450) is used by institutional/facility providers such as hospitals, whereas the CMS-1500 is used by individual physicians and outpatient/professional providers.

What is the electronic equivalent of the paper CMS-1500 claim?

The HIPAA-standard ASC X12 837P (Professional) electronic claim transaction.

What is a clearinghouse in electronic claims submission?

An intermediary that receives claims from providers, 'scrubs' them for errors, reformats them to payer specifications, and forwards them electronically to insurers.

What is a 'clean claim'?

A claim that is complete, accurate, and has no errors or missing information, so it can be processed and paid without being returned or requiring additional information.

What is claims adjudication?

The insurer's process of reviewing a submitted claim to determine whether and how much to pay—it may be paid, denied, or reduced.

What is an Explanation of Benefits (EOB), and who receives it?

A statement sent to the patient (and a Remittance Advice to the provider) explaining how a claim was processed: charges, allowed amount, paid amount, adjustments, and patient responsibility. It is NOT a bill.

What is the difference between a claim 'rejection' and a claim 'denial'?

A rejection is a claim returned (often by the clearinghouse/payer front-end) before processing due to errors and can be corrected and resubmitted. A denial is a claim that was processed/adjudicated but payment was refused; it generally requires an appeal.

What is a claims appeal?

A formal request to an insurer to reconsider and reverse a denied or underpaid claim, usually supported by additional documentation justifying medical necessity.

What is RBRVS, and what are its three components?

Resource-Based Relative Value Scale, the system Medicare uses to set physician fees. Components: physician work, practice expense, and malpractice (professional liability) expense (each as an RVU).

State the Medicare physician fee (payment) formula using RVUs and the conversion factor.

Payment = (Total RVUs adjusted by Geographic Practice Cost Indices, GPCIs) x the national Conversion Factor (CF). In short: adjusted RVUs x CF = fee.

What is a fee schedule?

A list of the maximum (allowed) amounts a payer will reimburse for specific procedures or services (by CPT/HCPCS code).

What is the difference between a charge, a payment, and an adjustment on a patient account?

Charge = the amount billed for a service. Payment = money received from the patient or insurer. Adjustment = a change (usually a write-off) such as the contractual discount between the billed charge and the insurer's allowed amount.

What is a contractual adjustment (write-off)?

The difference between the provider's billed charge and the insurer's allowed (contracted) amount, which a participating provider agrees to write off and cannot bill to the patient.

What is a day sheet (daily journal)?

A chronological record of all financial transactions (charges, payments, adjustments) for a single day in a medical practice.

What is a patient ledger?

A record of an individual patient's account showing all charges, payments, and adjustments and the running account balance.

What does 'aging' mean in an accounts receivable aging report?

Categorizing unpaid balances by how long they have been outstanding (e.g., current/0-30, 31-60, 61-90, and over 90 days) to track and prioritize collections.

In medical collections, what is the Fair Debt Collection Practices Act (FDCPA)?

A federal law that regulates debt collection practices, prohibiting harassment, deceptive practices, and contact at unreasonable times (generally before 8 a.m. or after 9 p.m.).

What does 'accounts receivable (A/R)' represent in a medical practice?

The total money owed to the practice by patients and insurers for services already provided but not yet paid.

What is petty cash used for in a medical office?

A small fund of cash kept on hand to pay for minor, incidental expenses (e.g., postage, small supplies) without writing a check.

What is the 'imprest' method of managing petty cash?

The fund is established at a fixed amount; receipts plus remaining cash should always equal that fixed amount, and the fund is periodically replenished back to the original total.

What is a bank reconciliation?

The process of comparing the practice's checkbook/ledger balance with the bank statement balance to identify and resolve differences (outstanding checks, deposits in transit, fees).

What does the endorsement 'For Deposit Only' on a check accomplish?

It is a restrictive endorsement that limits the check so it can only be deposited into the specified account, protecting against theft if the check is lost or stolen.