Reimbursement, Claims, and Revenue Cycle
What this domain tests
Revenue cycle items cover charge capture, coding, claim submission, payer adjudication, patient responsibility, denials, and coordination of benefits.
Core rules
- The CMS-1500 or electronic 837P carries provider, patient, diagnosis, service, and charge data. Clean claims meet payer edit requirements at submission.
- The allowed amount is the contracted payment. The contractual adjustment is the difference between billed charges and the allowed amount.
- Deductible is paid by the patient before benefits; coinsurance is the patient's percentage of the allowed amount after deductible.
- EOBs and ERAs explain payment, adjustments, and denial reasons through CARC and RARC codes.
- Timely filing, prior authorization, eligibility, and medical necessity edits cause most front-end and back-end denials. Coordination of benefits and Medicare Secondary Payer rules decide which payer is primary.
Worked example
A provider bills $400. The payer's allowed amount is $250, so the contractual adjustment is $150. The patient has a 20% coinsurance with no deductible remaining. The payer pays $200 and the patient owes $50. The provider may not balance bill the patient for the $150 contractual adjustment.
Traps
Balance billing Medicare beneficiaries; writing off patient coinsurance; missing timely filing; ignoring CARC/RARC explanations; billing the wrong payer order under COB; failing to appeal a denial within the stated window.