Principles of Healthcare Reimbursement 9 & 10

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Which of the following points is a guideline for the acute hospital prospective payment system?

Incentive for cost control because hospitals retain profits or suffer losses based on differences between payment rate and actual costs

What is the average of the sum of the relative weights of all patients treated during a specified time period?

Case mix index

Select the highest level of the IPPS hierarchy:

Major diagnostic category

What is the general term for software that assigns inpatient diagnosis related groups?


What is Medicare’s term for a facility with a high percentage of low-income patients?

Disproportionate share hospital

What condition does CMS require be met for a facility to receive the indirect medical education adjustment?

Medical residents in an approved graduate medical education program

What is the name of the entity that pays Medicare Part A claims?

Medicare Administrative Contractor

In MS-DRGs, for what is the case mix index a proxy?

Consumption of resources

In the IPPS, what is the term for each hospital’s unique standardized amount based on its costs per Medicare discharge?

Base payment rate

What is the basis of the "labor-related share"?

Facilities’ costs related to payrolls, benefits, and professional fees

A Medicare patient was discharged from one acute IPPS and admitted to another acute IPPS hospital on the same day. How will the two acute IPPS hospitals be reimbursed?

The first hospital receives a per-diem payment derived from the potential MS-DRG and the second hospital receives the full MS-DRG.

New medical technologies are often very expensive. What is the CMS’ position on the use of new technologies to treat Medicare beneficiaries?

CMS encourages the use of new technologies through a regulatory process that formally identifies a status of "new technology" and, thereby, allows a payment for the full DRG plus 50 percent of the new technology’s cost.

Which reimbursement scheme is used in the Inpatient Psychiatric Facility Prospective Payment System?

Per diem rate

Under the IPF PPS which states are included in the cost of living adjustment (COLA)?

Alaska and Hawaii

For purposes of Medicare reimbursement, which of the following situations represents a discharge from the first acute IPPS hospital and not a transfer?

The patient is discharged from one acute IPPS hospital and is admitted to a second acute IPPS hospital on the third day.

The federal government is determined to lower the overall payments to physicians. To incur the least administrative work, which of the following elements of the physician payment system would the government reduce?

Conversion Factor

What is the term for an index based on relative differences in the cost of a market basket of goods across areas?


All of the following elements are used to calculate a Medicare payment under RBRVS EXCEPT:

Extent of the physical exam

Which one of the following statements characterizes the RBRVS payment system?

RBRVS payment system reflects the skill and resources required for each procedure.

Which of the following sites is considered a facility in the RBRVS payment system?


Which element of the RVU accounts for the costs of the medical practice, such as office rent, wages of nonphysician personnel, and supplies and equipment?

Practice expenses

All of the following items are packaged under the Medicare Hospital Outpatient Prospective Payment System (HOPPS) EXCEPT for

medical visits

Which of the following statements is TRUE about APCs?

APCs are based on the CPT or HCPCS code(s) reported

In the APC system, an outlier payment is paid when which of the following occurs?

The cost of the service is greater than the APC payment by a fixed ratio and exceeds the APC payment plus a threshold amount

The HOPPS encompasses a variety of PPSs. All of the following are HOPPS system EXCEPT:

percent of billed charges

Under the Ambulance Fee Schedule, what is used to determine the level of service for ground transport?

EMS provider skill set used during the transport

What is the maximum number of APCs that may be assigned per encounter?


Under the HOPPS, outpatient services that are similar both clinically and in use of resources are assigned to separate groups called ___.

Ambulatory Payment Classifications

These are financial protections that were created to ensure that certain types of facilities (i.e., cancer hospitals and small rural hospitals) recoup losses incurred due to payment differences between the HOPPS and pre-HOPPS (reasonable cost) payments.

hold harmless

When a patient is pronounced dead prior to an ambulance being called, which of the following payment provisions is followed under the Ambulance Fee Schedule?

no payment is made to the ambulance supplier/provider

Which of the following staus indicates that the APC payment is reduced when multiple procedures with this status are reported together?

T- surgical service

Which of the following is NOT and adjustment provided under the Ambulance Fee Schedule?

Urban area service adjustment

Under the ASC List multiple procedure performed during the same surgical session are reimbursed at which of the following rate?

The procedure in the highest level group received full payment and the remaining receive half (50%) payment

The Medicare Modernization Act of 2003 mandated the creation of a new PPS for ASC services because:

There is disparity between ambulatory surgical center and hospital outpatient facility payments for the same services

Medicare-certified ASCs must accept assignment, meaning

an ASC must accept Medicare payment as payment in full

Under the SNF PPS, which one of the following healthcare services is excluded from the consolidated payment?

Radiation therapy

In the SNF PPS, which data set determines a resident’s classification into a resource utilization group?

Minimum Data Set

Generally, what is the average length of stay of long-term care hospitals?

Greater than or equal to 25 days

In terms of grouping and reimbursement, how are the MS-LTC-DRGs and acute care MS-DRGs similar?

Based on principal diagnosis

In the LTCH PPS, what is the standard federal rate?

Constant that converts the MS-LTC-DRG weight into a payment

To meet the definition of an IRF, facilities must have an inpatient population with at least a specified percentage of patients with certain conditions. Which of the following conditions is counted in the definition?

Brain injury

All of the following elements are part of the IRF PPS EXCEPT:

Major diagnostic category

In the IRF PPS, what is the tool for data collection that drives payment?

Patient Assessment Instrument

What data set provides the underpinning of the HHPPS?


All of the following services are consolidated into a single payment under the HHPPS EXCEPT:

Durable medical equipment

Which of the following elements is directly adjusted by the local wage index?

Labor portion

All of the following domains are part of the HHPPS case mix EXCEPT:

Medical malpractice

Which classification system is used to case-mix adjust the SNF payment rate?

Resource utilization groups

The therapist in the skilled nursing facility is treating multiple patients who are each performing different therapies. How does CMS classify this mode of delivery?


In the PAC payment systems, which tool does CMS use to adjust its payment rates to account for geographic variations in costs?

Market basket

Patients with all of the following conditions are appropriate for LTCHs EXCEPT:

Acute myocardial infarction

According to CMS, what is one of the purposes of the IRF PPS?

To promote equity for beneficiaries, facilities, and taxpayers

For what variations in resource consumption does the HHPPS account?

Number of therapy visits by a therapist

In which of the PAC payment systems, is the adjusted rate multiplied by the patient’s number of Medicare days to determine the reimbursement amount?

Skilled nursing facility

What is the term used in a rehabilitation facility to mean "a patient’s ability to perform activities of daily living?"

functional status

All of the following elements are found in a charge description master, EXCEPT for:


Which of the following is the definition of revenue cycle management?

Coordination of all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue

The term "hard coding" refers to:

CPT codes that appear in the hospital’s chargemaster

In healthcare settings, the record of the cash the facility will receive for the services it has provided is known as which of the following terms?

Accounts receivable

Healthcare facilities should think of the collection process as part of the complete billing process and should educate staff to the fact that not all money billed is ____?


Aging of accounts is the practice of counting the days, generally in ____ increments, from the time a bill has been sent to the payer to the current day.


Most facilities begin counting days in accounts receivable at which of the following times?

The date the bill drops

The amount of money owed a healthcare facility when claims are pending is called ____:

Dollars in accounts receivable

The dollar amount the facility actually bills for the services it provides is known as:


The difference between what is charged and what is paid is known as:

Contractual allowance

What is the name of the notice sent after the provider files a claim that details amounts billed by the provider, amounts approved by Medicare, how much Medicare paid, and what the patient must pay?


Which of the following is NOT a function area of the revenue cycle?

Volunteer services

Which entity is responsible for processing Part A claims and hospital-based Part B claims for institutional services on behalf of Medicare?

Medicare Administrative Contractor

Which of the following is NOT used to reconcile accounts in the patient accounting department?

Medicare Code Editor

In a typical acute care setting, Admitting is located in which revenue cycle area?

Pre-claims submission

In a typical acute care setting, Aging of Accounts reports are monitored in which revenue cycle area?

Accounts receivable

In a typical acute care setting, Charge Entry is located in which revenue cycle area?

Claims processing

In a typical acute care setting, Patient Education of Payment Policies is located in which revenue cycle area?

Pre-claims submission

In a typical acute care setting, the Explanation of Benefits, Medicare Summary Notice, and Remittance Advice documents (provided by the payer) are monitored in which revenue cycle area?

Claims reconciliation/collections

In a typical acute care setting, which revenue cycle area uses an internal auditing system (scrubber) to ensure that error free claims (clean claims) are submitted to third party payers?

Claims processing

What targets should be the focus of pay-for-performance or value-based purchasing systems?

Targets for which valid and reliable performance measures are available.

Which of the following situations would be included in a penalty-based model of pay-for-performance?

Compensation withheld for lack of improvement

Which of the following entities sponsor pay-for-performance systems?

All of the above

How do organizations control costs indirectly?

Reduce errors

Why are incremental implementations of pay-for-performance systems preferable to full-scale implementations?

Sponsors can evaluate policies and procedures.

In value-based purchasing and pay-for-performance systems, characteristics of adopted performance measures should include all the following EXCEPT:


Which of the following incentives is non-financial?

Public report cards

Which piece of legislation initiated the Reporting of Hospital Quality Data for Annual Payment Update (RHQDAPU) program?

Medicare Modernization Act

The Tax Relief and Health Care Act of 2006 (MIEA-TEHCA) expanded CMS quality initiatives to which two setting?

Hospital outpatient departments and Ambulatory Surgical Centers

Which condition is not included on the Hospital Acquired Conditions provision list for FY 2009?

Staphylococcus infections



What is a state licensed, Medicare certified supplier of surgical healthcare services that must accept assignment on claims?

ambulatory surgical center (ASC)

In IPPS, this is an indicator to differentiate between conditions present upon admission and those that develop during the hospital stay

present on admission (POA)

Medicare reimburses laboratory services based on what?

submitted charge, national limitation amount, or local fee schedule amount, whichever is lowest

How does Medicare reimburse DMEPOS?

80% of the actual charge amount or the fee schedule amount, whichever is lowest

In the Home Health PPS, patient assessments are completed using what?

outcomes and assessments information set (oasis)

In the IPPS what rule requires outpaient preadmission services provided by a hospital up to 3 days prior to the patient’s admission to be covered by IPPS payment:

IPPS 72-hour rule, or IPPS 3-day window rule

Medicare reimbursement for physician’s services is based on Relative Value Units assigned to each service/procedure consisting of what?

physician work expense, practice expense, & malpractice expense

This a condition that arises during the hospitalization that can change the patient’s outcome or may require additional treatment


This is a pre-existing condition treated during the hospitalization, but may not be what required the hospitalization


Medicare non-par physicians are held to a limiting charge amount. This is what percentage of the non-par medicare physician’s fee schedule amount?


NPPS can bill services provided to Medicare beneficiaries as what? It means that their services are billed underr a supervising physician

incident to

Home Health Services are reimbursed based on each______episode of care


DRG’s are organized into what?

major diagnostic categories

IPPS adjustment available for hospitals that treat a high-percentage of low-income patients

disproportionate share hospital

IPPS adjustment for hospitals that treat unusually costly cases


IPPS adjustment for approved teaching hospitals

indirect medical education

What classification system is used for the Inpatient PPS?


What does MS-DRG’s stand for?

medical severity diagnosis-related groups

What classification system is used for the Physician Fee Schedule payment system?

Resource Based Relative ValueSystem (RBRVS)

What classification system is used for the Outpatient PPS?

Ambulatory Payment Classifications (APC’s)

What classification system is used for the Skilled Nursing PPS?

Resource Utilization Groups (RUGs)

What classification system is used for the Home Health PPS?

Home Health Resource Groups (HHRGs)

What is a measure of the types of patients treated, and reflects a patient utilization of varying levels of healthcare resources for a facility?

case mix

This determines the appropriate group (e.g. MS, DRG, HHRG and so on) to classify a patient after data about the patient is input

grouper software

Predetermined reimbursement methodology:

payment system

Extent of physiological decompensation or organ system loss of function:

severity of illness

Hospitals use this to describe their patient encounter form:


Date elements collected by long-term care facilities:

minimum data set (MDS)

What do institutional and other selected providers submit their claim data on to payers for reimbursement of patient services?


What does the acronym NPP stand for?

nonphysician practitioner

Name three nonphysician practitioners:

nurse practitioner (NP), clinical nurse specialist (CNS), physician assistant (PA)

Which PPS provides a lump-sum payment that depends on the patient’s principal diagnosis, comorbidities, complications, and principal and secondary procedures?


Which is the abbreviation for the numeric codes reported on the CMS-1500 claim that indicate where services were provided to beneficiaries?

POS (place of service)

Resource utilization groups (RUGs) is a ____ reimbursement methodology used by skilled nursing facilities


Which legislated implementation of the long-term (acute) care hospital inpatient prospective payment system?


The resource-based relative value scale (RBRVS) system is more commonly called the:

medicare physician fee schedule

The process by which health care facilities and payers determine anticipated care needs by reviewing tyupes and/or categories of patients treated by a facility is called_____ analysis

case mix

Diagnosis-related groups are organized into mutually exclusive categories called______, which are loosely based on body systems

major diagnostic categories

Physician work, practice expense, and malpractice expense are components in computing _______ for the resource-based relative value scale system

relative value units

Four-digit______ codes are preprinted on a facility’s chargemaster to indicate the location or type of service provided to an institutional patient


Which is responsible for developing data elements reported on the UB-40?

NUBC (national uniform billing committee)

Which reimbursement system established rates in advance of services and is based on reported charges from which a per diem rate is determined?

prospective cost-based

A patient registered as an outpatient at a hospital presents with three encounters,what will the ambulatory patient classification reimbursement be based on?

assignment of multiple APCs that reflect all services provided, with discounting

Which type of hospital is excluded from the inpatient prospectice payment system?

cancer, or childrens hospitals

Which is the unit of payment for the inpatient prospective payment system?

hospital admission

Which is a relative value unit in the medicare physician fee schedule payment system?

practice expense

The intent of establishing a limiting charge for nonPARs is to:

offer financial protection for medicare enrollees

Which is classified as a nonphysician practitioner?

physician assistant, nurse practitioners, clinical nurse specialists

Which publication communicates new or changed policies and procedures that are being incorporated into a specific CMS manual?

program transmittal

When an office-based service is performed in a health care facility, payment is affected by the use of:

a site of service differential

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