Reimbursement and Revenue Cycle
What to know
The revenue cycle spans pre-service, time-of-service, and post-service activities: scheduling, eligibility verification, prior authorization, coding, charge capture, claims submission, denial management, and collections. Candidates should know the front-end, mid-cycle, and back-end components and the key performance indicators - clean claim rate, days in A/R, denial rate, net collection rate, and cost to collect.
Payment models are central: fee-for-service, capitation, bundled payments, prospective payment (DRG for inpatient, APC for outpatient), and value-based arrangements including shared savings and pay-for-performance. Understand the difference between charge, allowed amount, contractual adjustment, and patient responsibility (copay, coinsurance, deductible). Know Medicare and Medicaid basics, the role of the OIG and CMS, and concepts like medical necessity and documentation supporting coding.
Traps
Questions frequently confuse the chargemaster (gross charges) with reimbursement (contracted allowed amounts). Another trap is mixing up deductible (paid before coverage), copay (fixed amount), and coinsurance (percentage). Denial management questions may test that root-cause analysis should precede write-offs. Watch for prior authorization described as a back-end function - it is pre-service.
Worked example / rule of thumb
If the charge is $1,000, the contracted allowed amount is $600, and the patient has a $100 copay, the payer pays $500 and the contractual adjustment is $400. Rule of thumb: reimbursement = allowed amount, not charge. For denials, prevent first (eligibility, authorization, documentation), then appeal with evidence.