CH2- Health Insurance Models

Question 1

Which of the following services is NOT covered under Medicare Part B?
A. Cardiovascular disease screening
B. Diabetes self-management
C. Home Health services
D. Nutrition therapy services

Answer 1

C. Home Health services

Rationale: Home Health Services are covered under Part A.

Question 2

Which of the following is NOT evaluated in the credentialing process?
A. Physician’s residency
B. Physician’s license(s)
C. Physician’s education
D. Physician’s request for privileges

Answer 2

D. Physician’s request for privileges

Rationale: The credentialing process evaluates the licenses, residency, medical school education, and any adverse clinical information. Request for privileges is part of the privileging process for the hospital.

Question 3

Which of the following statements is true regarding the key provisions of coverage under the Affordable Care Act (ACA)?
A. Lifetime limits are not banned on any health plans issued.
B. There are 30 covered preventive services for women.
C. Children under the age of 21 may be eligible to be covered under their parent’s health plan if they are in college.
D. Patients have the right to appeal a health plan’s decision to deny payment for a claim or termination of health coverage.

Answer 3

D. Patients have the right to appeal a health plan’s decision to deny payment for a claim or termination of health coverage.

Rationale: Key provisions of coverage for patients under the ACA include: Patients have the right to appeal a health plan’s decision to deny payment for a claim or termination of health coverage, children under the age of 26 may be eligible to be covered under their parent’s health plan, lifetime limits on most benefits are banned, and there are 22 covered preventive services for women.

Question 4

A patient is scheduled in your office for Botox injections in her face for her smile lines. She has not met her deductible and states that she is going to use money from her Healthcare Reimbursement Account to pay for it. Is this possible?
A. Yes, but only a portion since it is a cosmetic procedure.
B. Yes, as long as she has enough money in the account, she may use it for any medical expense she chooses.
C. No, cosmetic procedures are ineligible expenses.
D. No, because a Healthcare Reimbursement Account cannot be used to meet a deductible.

Answer 4

C. No, cosmetic procedures are ineligible expenses.

Rationale: Eligible medical expenses under an HRA are defined by the IRS as those items and services that are meant to diagnose, cure, mitigate, treat, or prevent illness or disease, including transportation that is primarily for medical care. Cosmetic procedures are ineligible.

Question 5

A Medicare patient is seen in the Internist’s office for a check-up. The office bills Medicare, but the patient receives the payment, and the office must collect their fee from the patient. The office, by state law, can charge the patient a limiting charge that is 10 percent above the Medicare fee schedule amount. What type of Medicare provider is this physician?
A. Non-participating
B. Non-limiting
C. Opt-out
D. Participating

Answer 5

A. Non-participating

Rationale: Non-participating providers (non-PAR) choose to not accept assignment. If a provider decides not to participate with Medicare, the patient receives the payment, and the office has to collect all money due from them. In the case of Medicare, a limiting charge applies to non-participating providers, which is 115 percent of the physician fee schedule amount. Some states have stricter guidelines on limiting charges. The provider is still required to submit a claim to Medicare for services rendered.

Question 6

A patient needs to see a specialist for a cardiac condition. She references her insurance handbook for a list of network providers that belong to that specialty. She may choose any physician she wishes and does not need a referral from her Internist to see the specialist. If she chooses an out-of-network physician, she will have to pay a higher co-insurance amount to see them. What type of insurance does this patient have?
A. Medicaid
B. PPO
C. HMO
D. Medicare

Answer 6

B. PPO

Rationale: A PPO is a type of insurance plan that allows members to choose the doctors and hospitals they want to visit from providers within the network (preferred providers). If they choose not to see a preferred provider, the services are still covered, but the patient will pay more out-of-pocket costs as the services provided by non-participating providers are reimbursed at a lower rate. An HMO requires a “gatekeeper” and referrals to see a specialist.

Question 7

A new patient is seen for a visit with a participating commercial carrier. CPT® code 99204 is billed for $200. The contracted fee for this carrier is $153.35. The patient has a 20% co-pay after a $1000 deductible, of which $500 has been met. How much will the patient owe?
A. $30.67
B. $200
C. $153.35
D. $46.65

Answer 7

C. $153.35

Rationale: This is a participating physician, and the contracted amount for this visit is $153.35. Since the deductible has not been met, the contracted amount will be applied toward the deductible and will be paid by the patient.

Question 8

A new physician comes into the practice that is just out of medical school. He will need to be able to see patients in the office and at the hospital. What process will he need to undergo in order to be able to participate with Medicare and other health plans?
A. Credentialing
B. Privileging
C. Board certification
D. Contract negotiations

Answer 8

A. Credentialing

Rationale: Medical credentialing is used by various organizations and insurance companies to ensure that their healthcare providers meet all of the necessary requirements and are appropriately qualified. Physicians must have the necessary credentials and go through the process to participate with an insurance company. For Medicare, credentialing is required to receive reimbursement. Credentialing allows a physician to become affiliated with insurance companies to be able to accept third party reimbursement.

Question 9

Managed Care Organizations (MCOs) place the physician at financial risk for the care of the patient. How are they reimbursed?
A. Fee-for-service
B. Capitation
C. Reimbursement account
D. Patient payments

Answer 9

B. Capitation

Rationale: The physician is paid on per-patient per month method rather than a fee-for-service method.

Question 10

Physician-Hospital Organizations (PHO), Management Service Organization (MSO) and Integrated Provider Organization (IPO) are examples of what type of healthcare models?
A. Affiliated Healthcare Systems
B. Alliance for Healthcare Systems
C. Integrated Delivery Systems
D. Preferred Provider Organizations

Answer 10

C. Integrated Delivery Systems

Rationale: Integrated Delivery Systems are a network of providers and facilities that work together to offer joint healthcare services to its members.

Question 11

Insurance coverage provided by an organization that is not an employer (such as a membership organization or credit card company that offers benefits to its members) is what kind of group insurance?
A. Self-funded group
B. Association group
C. PPO
D. Small employer group

Answer 11

B. Association group

Rationale: Association Group – This is offered by a different type of group other than an employer, like a credit card company offering insurance benefits to its cardholders.

Question 12

NPI is an abbreviation for a unique number that is required by HIPAA. What does NPI stand for?
A. National Provider Identifier
B. National Participating Identifier
C. National Provider Insurance
D. National Physician Identifier

Answer 12

A. National Provider Identifier

Rationale: A National Provider Identifier, or NPI, is a unique 10-digit identification number required by HIPAA.

Question 13

A group contracts with a third-party administrator to manage paperwork. This group pays for the operation of the insurance plan and the costs of administration. What type of plan does this represent?
A. Fully Insured Employer Group
B. Self-Funded ERISA
C. Association Group
D. Management Service Organization

Answer 13

B. Self-Funded ERISA

Rationale: Self-Funded ERISA – The group contracts with the insurance company or third-party administrator to handle the paperwork. This is available to large groups, which pays for the operation of the insurance plan itself and the costs for administration.

Question 14

What are some of the ways that managed care organizations (MCOs) offer provisions that provide insurers with ways to manage the cost, use, and quality of healthcare services received by a member?
I. Utilization review
II. Coverage restrictions
III. Arbitration
IV. Non-emergency weekend admission restrictions
A. II, III, IV
B. I, II, IV
C. II, IV
D. I, IV

Answer 14

D. I, IV

Rationale: Managed care organizations offer managed care provisions that provide insurers with ways to manage the cost, use, and quality of health care services received by group members, including: Utilization review, non-emergency weekend admission restrictions, preadmission certification, preadmission testing, and second surgical opinions.

Question 15

There are benefits and disadvantages to providing care to a patient in a capitated managed care situation. Which one of these listed is a disadvantage?
A. Having a large population of high-risk patients
B. Physician does not have to wait for reimbursement
C. Lower risk of unnecessary services
D. Physician does not have to file a claim

Answer 15

A. Having a large population of high-risk patients

Rationale: When a provider is reimbursed per-member per-month and has patients that are at high risk and over-utilize the system, it can result in higher costs and risk calculations.

Question 16

Who does Medicare provide hospital coverage and voluntary medical insurance to?
A. Certain individuals of low-income
B. All persons under the age of 26
C. Certain disabled individuals under age 65
D. Unemployed individuals

Answer 16

C. Certain disabled individuals under age 65

Rationale: Medicare is offered to those that are age 65 or older, and to certain individuals under age 65 that have disabilities.

Question 17

A local hospital has hired an organization to provide practice management services for them. The organization will handle the screening process for new hires, compliance and policy implementation, and credentialing and contract negotiations. What type of organization is this?
A. IPO
B. GPWW
C. MSO
D. PHO

Answer 17

C. MSO

Rationale: An MSO (Management Service Organization) is a business that provides nonclinical services to providers, like practice management services to individual physician practices. An MSO may also acquire a practice’s asset and enter into agreements to provide the practice with space and/or equipment. MSOs may be owned by non-healthcare provider investors, by a hospital, by a group of physicians, by a joint venture between a hospital and physicians, or by a health plan. An MSO can provide a menu of services for providers to select from to meet their needs. These can include those stated already and screening and hiring employees; providing office staff, billing, and coding personnel, IT personnel, in-service training, monitoring, and implementing policies and procedures for coding and billing; compliance, claims submission, appeals, and auditing services; and assisting with managed care contracting and negotiations.

Question 18

A patient presents for an immunization. When the patient pays his bill, he asks for a receipt so that he may turn it in to meet his spenddown. What type of coverage does this patient have?
A. Medicare
B. TRICARE
C. Commercial insurance
D. Medicaid

Answer 18

D. Medicaid

Rationale: The spenddown program under Medicaid is for people that earn too high an income or have too many assets to qualify for regular Medicaid. A spenddown is similar to a deductible.

Question 19

What is the benefit of using NPI numbers for payers?
I. It is a single identifier for all payers
II. It contains the providers’ birthdates to allow certain identification
III. Each payer can make their own number
IV. It has no personal identifying information in the number
A. III, IV
B. I, IV
C. I, II, IV
D. I, II

Answer 19

B. I, IV

Rationale: A National Provider Identifier, or NPI, is a unique 10-digit identification number required by HIPAA. In the past, providers had different identification numbers for each payer, but the introduction of the NPI is a single identifier for all payers to improve the efficiency of the healthcare system. It will also help reduce fraud and abuse. It is an “intelligence-free” number, meaning that there is no personal identifying information (birthdate or social security number) other than a name and business address.

Question 20

Which is NOT one of the types of coverage that TRICARE offers?
A. TRICARE Premium
B. TRICARE Prime
C. TRICARE Select
D. TRICARE for Life

Answer 20

A. TRICARE Premium

Rationale: TRICARE offers coverage choices for health plans: TRICARE Prime®, TRICARE Select®, TRICARE for Life, TRICARE Reserve Select®, TRICARE Retired Reserve®, and TRICARE Young Adult.

Question 21

What is an IPO in a health organization?
A. A corporate umbrella for management of diversified healthcare delivery systems
B. An organization that combines function of delivery of care with healthcare and administration
C. A group of providers offering joint healthcare services
D. A practice formed to share economic risk, expenses, and marketing efforts

Answer 21

A. A corporate umbrella for management of diversified healthcare delivery systems

Rationale: An IPO is a corporate umbrella for the management of diversified healthcare delivery systems. The system may include one or more hospitals, a large group practice and other healthcare operations. Physicians practice as employees of the organization or in a closely affiliated physician group.

Question 22

The following is a capitation schedule for a pediatric practice.
Member’s Age Capitation per Member, per Month
0-1 $25.00
2-4 $10.00
5-20 $5.00
The practice has 300 members age 0-1, 500 members age 2-4, and 2000 members age 5-20 that stay with the practice for an entire year. If the practice also performs “carve-out” services worth $20,000, how much money will they earn over the course of a year?
A. 290,000
B. 300,000
C. 270,000
D. 250,000

Answer 22

A. 290,000

Rationale: Adding up the monthly amounts and multiplying by 12, the fees received would total $270,000. Carve-out services are additional services paid on a fee-for-service basis, so that adds to the total received. In this case, the total the practice would receive over the year is $290,000.

Question 23

When a patient is enrolled in an HMO, which options below are the responsibilities of the primary care physician (PCP)?
I. Manage the member’s treatment
II. Be the only provider for all of the patient’s healthcare
III. Provide referrals to specialists
IV. Approve emergency department visits
V. Provide referrals for inpatient admissions
A. I, III, V
B. I, II
C. I, II, III
D. I, III, IV

Answer 23

A. I, III, V

Rationale: Upon joining an HMO, a member chooses a primary care provider, or PCP. This provider, sometimes called a gatekeeper, is responsible for providing a broad range of routine services. Their duty is to manage the member’s treatment, as they are responsible for the member’s healthcare decisions and referrals to other facilities (for example, inpatient admissions), in-network specialists, or out-of-network specialists when necessary. Most plans require the referral, or the member is responsible for the cost of treatment. Each covered member of a family may choose a different PCP. A PCP is usually a family or general medicine provider, an internal medicine provider, or a pediatrician.

Question 24

ACOs are similar to HMOs in that they have shared risks. They do have differences. Which statement is TRUE?
A. ACOs require a five-year commitment
B. ACO’s are performance based while HMOs are not
C. The ACO is formed with only 5,000 beneficiaries instead of HMOs that generally have hundreds of thousands of beneficiaries.
D. Both HMOs and ACOs function as an insurance company.

Answer 24

C. The ACO is formed with only 5,000 beneficiaries instead of HMOs that generally have hundreds of thousands of beneficiaries.

Rationale: CMS has established that an ACO is responsible for only 5,000 beneficiaries and requires a minimum of a three-year commitment. ACOs do not function as insurance companies.

Question 25

A claim is denied stating the provider is not credentialed with the commercial insurance. Which of the following would NOT be an option for the practice?
A. Refile the claim under a credentialed provider in the group using the group number
B. Write-off the balance of the encounter
C. Verify the status of the provider’s credentialing
D. Bill the patient for the services

Answer 25

A. Refile the claim under a credentialed provider in the group using the group number

Rationale: Billing the patient for services could be problematic if the patient was told the provider was in-network and writing-off the balance can create issues with providing free care but these could be done. It would be appropriate to verify the credentialing, as the claim could have been processed incorrectly. It is NOT appropriate to bill services to a provider that did not provide the care to the patient.

Question 26

What type of insurance is paid for by employers for employees and takes advantage of purchasing power of having large member numbers?
A. Individual health plan
B. Group health plan
C. Medicare
D. Medicaid

Answer 26

B. Group health plan

Rationale: Group health plans are those purchased by employers for employees. Employers can take advantage of purchasing power of the group to allow the insurance company to reduce the rate it charges to provide insurance for each individual member of the group.

Question 27

An internist sees a 20-year-old patient for an office visit. The patient needs to see an endocrinologist for a consultation regarding her diabetes. The internist is a participating provider in her plan. She can choose any provider she wishes for her consultation, but she will save money if she sees a specialist that is in her network. She does not require a referral for her consultation. What type of insurance does the patient have?
A. HMO
B. Indemnity insurance
C. Medicare Advantage
D. PPO

Answer 27

D. PPO

Rationale: A PPO is a type of insurance plan that allows members to choose the doctors and hospitals they want to visit from providers within the network (preferred providers). Unlike HMOs, patients are not required to obtain prior approval or go through a “gatekeeper” if they wish to see a specialist. They also are not required to choose a primary care provider. If they choose not to see a preferred provider, the services are still covered, but the patient will pay more out-of-pocket costs as the services provided by non-participating providers are reimbursed at a lower rate.

Question 28

What are the options for a provider with regard to participation with Medicare?
A. It is mandatory for every provider to participate in Medicare
B. Providers may participate, may choose not to participate, or may opt-out of Medicare
C. Providers are automatically opted-out
D. Only participating providers must file claims

Answer 28

B. Providers may participate, may choose not to participate, or may opt-out of Medicare

Rationale: In regard to Medicare, a provider may choose to be a participating provider, a non-participating provider, or choose a third option of opting-out of the Medicare program.

Question 29

A family practitioner sees a Medicare patient and bills a 99213. This provider has opted-out of Medicare. His fee for the service is $125.00. Medicare’s approved amount is $73.08, and the patient has met $0 of his deductible. What can the provider bill the patient?
A. $125.00
B. $73.08
C. $14.62
D. $58.46

Answer 29

A. $125.00

Rationale: Providers that opt-out of Medicare are not limited to any specific charge limit on their patients. The patient is responsible for payment in full for services as Medicare will not pay any amount to either the patient or provider in this situation.

Question 30

Under the Patient Protection and Affordable Care Act (ACA), what is banned?
A. Expanded preventive health services
B. Lifetime limits
C. Patient appeal rights
D. Coverage for children under the age of 26

Answer 30

B. Lifetime limits

Rationale: Under the ACA, lifetime limits are banned on any health plans issued or renewed on or after September 23, 2010. The law also bans annual dollar limits on most covered benefits as of January 1, 2014.

Question 31

A Medicaid patient presents for services on the first day of the month. He has a $50 spenddown and has had no services this month. The visit for today was $100.00. If the patient wants to be covered as long as possible from today’s visit, what can he do?
A. Turn the receipt in to his caseworker and be eligible for two months of coverage
B. Turn the receipt in to his caseworker and be eligible for the month with $50 to be assessed by Medicaid for the visit that is above his spenddown
C. Coverage is automatic and the patient will be reimbursed the $100 from Medicaid
D. Turn in the receipt to his caseworker and be eligible for coverage for the current month, plus two additional months

Answer 31

A. Turn the receipt in to his caseworker and be eligible for two months of coverage

Rationale: A bill that is larger than the spenddown may be used to meet multiple month’s spenddown. If a patient wants the most coverage possible, $100 would meet two month’s coverage spenddown.

Question 32

Which insurance is a healthcare benefit program for military personnel in all seven uniformed branches?
A. Medicare
B. Medicaid
C. TRICARE
D. BCBS

Answer 32

C. TRICARE

Rationale: TRICARE is a healthcare benefit program for military personnel in all seven uniformed branches—the Army, the U.S. Navy, the Air Force, the Marine Corps, the Coast Guard, the Commissioned Corps of the U. S. Public Health Service, and the Commissioned Corps of the National Oceanic and Atmospheric Administration. It was formerly known as the Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS. TRICARE is managed in three separate regions—two U.S. regions which are East and West, and an overseas region. Each region has its own regional contractor.

Question 33

A patient has receipts for her dental cleaning, vision exam, and contact lenses. Her employer has set up special accounts for each employee, there is no limit to the amount the employer can contribute, and the balances roll over from year to year. What type of account is this?
A. Flexible Spending Account (FSA)
B. Health Savings Account (HSA)
C. Health Insurance Account (HIA)
D. Traditional Healthcare Reimbursement Arrangement (HRA)

Answer 33

D. Traditional Healthcare Reimbursement Arrangement (HRA)

Rationale: With an HRA, the employer has full power over structuring the employee’s use of HRA funds. Unlike an HSA or FSA, there is no limit to the amount an employer can contribute to an employee’s healthcare reimbursement account. The account balances may also roll over from year to year.

Question 34

A patient presents to be seen in the office. He does not pay at the time the services are rendered as the provider is his primary care provider, or gatekeeper. The large group practice has 800 covered members under this plan and is paid on a monthly basis with a set amount that is based on the number of members covered and their ages. What type of plan is this?
A. PPO
B. Capitation
C. Fee-for-service
D. Indemnity

Answer 34

B. Capitation

Rationale: Capitation payments are used by managed care organizations (MCOs) to control healthcare costs by putting the physicians at financial risk for services provided to patients. Payments are based on a per-person rate, rather than a fee-for-service rate.

Question 34

Why must a provider obtain an NPI number?

I.To submit claims
II.To prove that he is licensed
III.To be HIPAA compliant
IV.To guarantee payment by a health plan
A. I, II, III
B. II, III, IV
C. I, II, III, IV
D. I, III

Answer 34

D. I, III

Rationale: A National Provider Identifier, or NPI, is a unique 10-digit identification number required by HIPAA. All healthcare providers that are covered entities must obtain an NPI. An NPI does not: 1) ensure a provider is licensed or credentialed; 2) guarantee payment by a health plan; 3) enroll a provider in a health plan; 4) make a provider a covered provider; 5) require a provider to conduct HIPAA transactions; or 6) change or replace the Medicare enrollment or certification process.