Exam 3 – Healthcare Revenue Cycle
Principles of Healthcare Reimbursement & Revenue Cycle Management: Chapter 9, 10, 11, 1
Chapter 9: Revenue Cycle Front-End Processes – Patient Engagement
• In patient registration, data regarding the diagnosis, planned treatment, insurance coverage and any
necessary agreements to fulfill financial obligations are collected from the patient.
• The provider handles submitting a request for a prior authorization for care.
• The amount of money owed by a patient for healthcare services is out of pocket cost of care.
• Shoppable services can be scheduled in advance and are generally not emergency services.
Examples include imaging, lab tests, or outpatient visits.
• Define the following:
o Patient portal: allows patients to send and receive information with a provider
electronically.
o Patient financial responsibility agreement
o Price transparency: (in healthcare) readily available information about the price of services
o Advance beneficiary notification of noncoverage (ABN)
o Prior authorization
Chapter 10: Revenue Cycle Middle Processes – Resource Tracking
• The following elements are typically found in a charge description master (CDM): procedure/service
charge, CPT/HCPCS code, Narrative description of procedure/service.
• Some CDM data elements are standardized and consistent throughout the US, such as CPT/HCPCS
codes and revenue codes.
• Know Table 10.5 HIPAA-designated code sets (page 191) – specifically note the following:
o Inpatient Facility uses ICD-10-CM for diagnosis coding and ICD-10-PCS for procedures.
o ICD-10-CM is used for all diagnosis coding regardless of setting.
o HCPCS (CPT and HCPCS Level II) is used for procedures in the outpatient setting for physician
& facility.
o CPT is used for procedures for Inpatient Physician.
• Define the following:
o Computerized Provider Order Entry (CPOE): allows physicians/providers to order services for
a patient via a computerized system.
o Charge: the dollar amount actually billed (may not be what is reimbursed, depends on
contractual, insurance, etc.)
o Modifiers: inclusion of modifiers in the CDM is rare. CDM teams should pay close attention
to modifier reporting guidelines if they choose to include a modifier in the CDM.
o Structure of ICD-10-PCS code: N represents a number, and A represents an alpha character:
NNAANAA
o HCPCS Level II: used to report drugs, biological, and chemotherapy drugs in the outpatient
setting.

Chapter 11: Revenue Cycle Back-End Processes – Claims Production and Revenue Collection
• Claims reconciliation: once the healthcare facility or provider receives the remittance advice, the
claims reconciliation process begins to compare expected reimbursement to what is received from
the payer.
• Define the following:
o Accrual accounting: allows for accounts receivable (AR) to be recorded at the time of service
delivery rather than when the funds are received.
o Editing software is typically used by facilities to identify claim errors prior to claims
submission.
o Adjudication: reimbursement amount based on the beneficiary's insurance plan benefits.
Once claims are submitted to the third party payer, the payer adjudicates the claims.
Outcomes include:
▪ Payment: claim is paid without review or further processing
▪ Suspend: claims examiner or claims analyst must manually review the claim
▪ Reject: results in claim being partially paid and error lines may be corrected and
resubmitted
▪ Denial: facility must appeal the payer decision if they disagree
o Allowable charge: the amount the payer has agreed to reimburse for the service provided to
the beneficiary. The provider has agreed to accept the payment of the allowable charge as
payment in full. Divided into two parts: 1) the benefit payment for which the payer is
responsible and the cost sharing amount for which the beneficiary is responsible.
o Benefit payment: the amount the insurance company has paid for the service.
Chapter 12: Coding & Clinical Documentation Integrity Management
• Know the Computer-Assisted Coding Workflow (Figure 12.3 – Basic CAC process)
• The CDI specialist should examine a patient’s medical record documentation as many times as
warranted based on the clinical documentation and circumstances of the admission prior to the
patient being discharged or transferred.
• Coder productivity calculation example: 420 minutes worked / 41 minutes average time to code one
chart = 10 records per day is the coding productivity standard
• Coding accuracy includes correct assignment of diagnosis and procedure codes, modifiers when
applicable, and discharge status code.
• Queries: When writing queries to clarify medical documentation, include 3 components of clinical
information: clinical indicators, treatment and monitoring, and related conditions (such as
comorbidities).
• Key Performance Indicators (KPIs) for Coding:
o Denial Rate: measure that assesses ability to comply with documentation, coding, and billing
requirements
o Clean Claim Rate: measure that assesses ability to comply with billing edits
o DNFB (Discharged, not final billed): measure of the health of the claims generation process
Chapter 13: Revenue Compliance
• Be familiar with examples of fraud and abuse discussed in the text on page 252.
• Define the following:
o Recovery Audit Program: Medicare contractors hired for improper payment reviews and
paid on a contingency fee.

o Upcoding: the fraudulent process of submitting codes for reimbursement that indicate more
complex or higher-paying services than those that the patient actually received.
o Medicare Claims Processing Manual: Online publication that provides guidance for
producing claims for all healthcare settings. Includes billing regulations as well as service
area-specific requirements. Serves as day-to-day operating instructions for administering
CMS programs.
o CMS Transmittals: used by CMS to communicate policies and procedures for prospective
payment systems’ program manuals.
o National Coverage Determination (NCD): National medical necessity and reimbursement
regulations. Includes a description of the circumstances under which medical supplies,
services or procedures are covered nationwide by Medicare.
o Systematic random sampling:
o Clinical validation denial: type of denial that indicates there is insufficient clinical indicators
or discussion points within the health record documentation to support the diagnosis
assigned to the patient.
o False Claims Act: penalizes federal contractors who knowingly file false or fraudulent claims
to defraud the US government.
o PERM: program used by CMS to measure improper payment for Medicaid and CHIP.
Chapter 14: Healthcare Data in Action: Real-World Analysis
• This chapter uses case-studies to explore common areas for analysis. Although there are not
questions from this chapter on the exam, it reinforces topics studied this semester