Billing, Coding, Coverage, and Reimbursement
Coding foundations
Candidates must distinguish code sets: ICD-10-CM for diagnoses, CPT and HCPCS Level II for procedures and supplies, and revenue codes for facility billing. Medical necessity links the diagnosis to the service; a payable claim requires correct coding, documented necessity, and covered status. Upcoding, unbundling, and billing for services not rendered are the classic false-claim patterns.
Coverage and reimbursement mechanics
Know Medicare Parts A, B, C, and D and what each covers. Understand the difference between national coverage determinations (NCDs) and local coverage determinations (LCDs), and that an Advance Beneficiary Notice (ABN) shifts financial responsibility to the patient only when the provider correctly predicts non-coverage and documents it. Modifier use, place-of-service, and the two-midnight rule for inpatient admission are high-yield topics. DRG-based inpatient payment versus APC or fee-schedule outpatient payment is a common contrast question.
Traps to watch
- Assuming a signed ABN guarantees payment; it must be properly completed and timely.
- Confusing medical necessity denials with coding denials - the appeal path differs.
- Believing a service is covered simply because a code exists.
- Overlooking that Medicare Advantage plans follow CMS rules but apply plan-specific prior authorization.
Rule of thumb
If documentation does not support the code, the claim is improper even if the service was performed. Document first, code second.
Worked example
A physician performs a medically necessary service that an LCD lists as non-covered without a specific diagnosis. The office issues a valid ABN before service and the patient accepts. The claim is billed with the appropriate modifier and the patient is responsible for the charge. Without the ABN, the provider absorbs the cost.