Medical Billing and Reimbursement
Billing and reimbursement tests claim formation, payer rules, denial management, patient responsibility, and the compliance risks that arise when revenue pressure meets coverage rules. Expect questions on CMS-1500 and UB-04 claims, timely filing, coordination of benefits, ABNs, appeals, and Medicare reimbursement methods.
Core rules and concepts
- Use the CMS-1500 for professional claims and the UB-04 for institutional claims. A clean claim has correct patient identifiers, NPI, diagnosis and procedure codes, dates, charges, and payer-specific data.
- Know payer type and reimbursement method. Medicare physician payment uses the RVU formula: (work RVU × work GPCI) + (practice expense RVU × PE GPCI) + (malpractice RVU × MP GPCI), multiplied by the conversion factor. Commercial payers may use fee schedules, case rates, or percent of Medicare.
- Timely filing deadlines are payer-specific and often shortened by contract. Track denial reason codes: CO (contractual obligation), PR (patient responsibility), and OA (other adjustment). Appeal within the deadline with clinical documentation and the relevant policy.
- An ABN is required before billing a Medicare beneficiary for items or services expected to be denied as not medically necessary, not covered, or statutorily excluded, when the provider chooses to bill the patient.
- Coordination of benefits determines primary and secondary payer. Do not routinely waive copays or deductibles; routine waiver can violate the Anti-Kickback Statute and create False Claims Act risk.
Worked example
A Medicare claim for a screening colonoscopy is denied as noncovered because the patient had a diagnostic colonoscopy within the prior period. The biller reviews the denial code, confirms the service was diagnostic rather than screening, and checks the Medicare policy. Because the patient signed an ABN before the service and the service was statutorily excluded in this circumstance, the practice may bill the patient. The biller documents the denial, the ABN, and the appeal decision. Writing off the balance without an ABN would create compliance risk.
Traps that cost marks
- Writing off patient responsibility without a valid ABN or documented financial hardship.
- Missing the payer appeal deadline because the denial was worked only as a billing write-off.
- Using the wrong claim form for the setting.
- Billing Medicare secondary without checking the MSP questionnaire.
- Assuming a denial means the claim was coded incorrectly; verify coverage and medical necessity first.