NHA Study Guide

NHA MEDICAL BILLING & CODING EXAM STUDY GUIDE

1. MEDICAL TERMINOLOGY

Anatomy & Physiology

Anatomy — Study of body structures.
Physiology — Study of how the body functions.
Pathology — Study of disease and abnormal conditions.

Body Planes

Sagittal plane — Divides the body into right and left portions.
Midsagittal plane — Divides the body into equal right and left halves.
Frontal/Coronal plane — Divides the body into anterior and posterior portions.
Transverse plane — Divides the body into superior and inferior portions.

Directional Terms

Anterior — Toward the front.
Posterior — Toward the back.
Superior — Above.
Inferior — Below.
Medial — Toward the body’s midline.
Lateral — Away from the midline.
Proximal — Closer to the point of attachment.
Distal — Farther from the point of attachment.
Superficial — Near the surface.
Deep — Farther from the surface.

Major Body Systems

Cardiovascular — Heart and blood vessels.
Respiratory — Lungs and airways.
Digestive/Gastrointestinal — Breaks down food and absorbs nutrients.
Musculoskeletal — Bones, muscles, joints, and connective tissue.
Nervous — Brain, spinal cord, and nerves.
Endocrine — Hormone-producing glands.
Urinary — Kidneys, ureters, bladder, and urethra.
Reproductive — Organs involved in reproduction.
Integumentary — Skin, hair, and nails.
Immune/Lymphatic — Protects the body against disease and infection.

2. MEDICAL TERMINOLOGY WORD PARTS

Prefix — Appears at the beginning of a word and modifies meaning.

Root word — Main foundation of a medical term.

Suffix — Appears at the end and often identifies a condition, procedure, or specialty.

Combining vowel — Usually “o”; connects word parts.

Common Prefixes

a-, an- — Without/not
brady- — Slow
tachy- — Fast
hyper- — Excessive/high
hypo- — Below/low
peri- — Around
endo- — Within
epi- — Upon/above
intra- — Within
sub- — Under
poly- — Many
oligo- — Few/scanty

Common Suffixes

-itis — Inflammation
-ectomy — Surgical removal
-otomy — Incision/cutting into
-ostomy — Surgical creation of an opening
-algia — Pain
-emia — Blood condition
-megaly — Enlargement
-scopy — Visual examination
-plasty — Surgical repair
-rrhage — Excessive bleeding
-rrhea — Flow/discharge
-pathy — Disease
-logy — Study of

3. MEDICAL RECORDS & DOCUMENTATION

Medical Record

A medical record contains documentation about a patient’s care, including:

Patient identification
Medical history
Examination findings
Diagnoses
Treatment
Procedures
Medications
Test results
Provider documentation

SOAP Notes

S — Subjective
Information reported by the patient.

O — Objective
Observable/measurable information such as vital signs, laboratory results, and examination findings.

A — Assessment
Provider’s clinical assessment or diagnosis.

P — Plan
Treatment plan and next steps.

Documentation Principle

If it isn’t documented, it wasn’t done.

Coders should code from provider documentation and should not assume information that is not documented.

4. HIPAA & PATIENT PRIVACY

HIPAA

Health Insurance Portability and Accountability Act

HIPAA establishes standards for protecting protected health information (PHI).

PHI

Protected Health Information — Individually identifiable health information related to a person’s health, healthcare, or payment for healthcare.

HIPAA Privacy Rule

Controls how PHI can be used and disclosed.

HIPAA Security Rule

Protects electronic protected health information (ePHI).

Minimum Necessary Rule

Only the minimum necessary PHI should generally be accessed, used, or disclosed for an intended purpose.

Patient Rights

Patients generally have rights involving:

Access to their health information
Requests for corrections
Information about privacy practices
Restrictions in certain circumstances
Accounting of certain disclosures

HIPAA Violations

Examples include:

Discussing patient information where unauthorized people can hear
Leaving PHI exposed
Sharing passwords
Accessing records without a legitimate reason
Sending PHI to an unauthorized person

5. MEDICAL ETHICS

Confidentiality

Protecting patient information from unauthorized disclosure.

Beneficence

Acting for the patient’s benefit.

Nonmaleficence

Do no harm.

Autonomy

Respecting the patient’s right to make decisions.

Justice

Treating patients fairly.

Veracity

Truthfulness.

Fidelity

Keeping commitments and responsibilities.

6. MEDICAL CODING BASICS

Medical coding converts medical documentation into standardized codes.

The major code sets include:

ICD-10-CM — Diagnoses and conditions.

CPT — Physician and other qualified healthcare professional services and procedures.

HCPCS Level II — Supplies, products, medications, ambulance services, and other services not represented by CPT.

Coding Rule

Code what is documented.

Do not:

Guess
Assume
Add undocumented diagnoses
Select a code simply because it produces higher reimbursement

7. ICD-10-CM

ICD-10-CM = International Classification of Diseases, 10th Revision, Clinical Modification.

Used primarily to report diagnoses and health conditions.

ICD-10-CM Structure

Codes can contain:

Letters
Numbers
Decimal points

Example:

E11.9 — Type 2 diabetes mellitus without complications.

Alphabetic Index

The Alphabetic Index helps locate a diagnosis or condition.

Tabular List

The Tabular List provides:

Full code descriptions
Inclusion notes
Exclusion notes
Coding instructions
Additional specificity

NEVER Code Directly From the Alphabetic Index

Use the Alphabetic Index to locate the code, then verify it in the Tabular List.

Placeholder X

An X may be used as a placeholder when required so that a 7th character can be placed correctly.

7th Character

Used by certain ICD-10-CM categories to provide additional information such as encounter or healing status.

Laterality

Some codes identify:

Right
Left
Bilateral

Do not use an unspecified side when the documentation provides laterality.

8. ICD-10-CM NOTES

Excludes1

The two conditions should not be coded together.

Excludes2

The excluded condition is not part of the condition represented by the code, but both conditions may be coded when appropriate.

Code First

The underlying condition should be sequenced before the manifestation.

Use Additional Code

An additional code may be required to fully describe the condition.

“With”

In ICD-10-CM, “with” can have specific coding implications when the classification assumes a relationship between conditions.

9. CPT

CPT = Current Procedural Terminology

CPT codes primarily report medical procedures and professional services.

CPT Categories

Category I — Established procedures and services.

Category II — Optional tracking/performance measurement codes.

Category III — Temporary codes for emerging technologies, procedures, and services.

CPT Category I Sections

Evaluation and Management
Anesthesia
Surgery
Radiology
Pathology and Laboratory
Medicine

10. CPT MODIFIERS

Modifiers provide additional information about a service without changing the basic procedure code.

Modifier -25

Significant, separately identifiable E/M service on the same day as another procedure/service.

Modifier -26

Professional component.

Modifier -TC

Technical component.

Modifier -59

Distinct procedural service.

Modifier -24

Unrelated E/M service during a postoperative period.

Modifier -51

Multiple procedures.

Modifier -52

Reduced services.

Modifier -53

Discontinued procedure.

Modifier -57

Decision for surgery.

Modifier -79

Unrelated procedure/service by the same physician during the postoperative period.

Modifier -91

Repeat clinical diagnostic laboratory test.

11. HCPCS LEVEL II

HCPCS Level II codes are alphanumeric and generally consist of one letter followed by four numbers.

Used for items/services such as:

Medical supplies
Durable medical equipment
Ambulance services
Certain medications
Prosthetics
Orthotics
Certain nonphysician services

HCPCS Modifiers

Modifiers may provide information such as:

Location
Circumstances
Side of body
Supplier information

12. MEDICAL NECESSITY

Medical necessity means that a service or procedure is reasonable and necessary for the diagnosis or treatment of a patient’s condition.

Diagnosis codes often support the medical necessity of procedures.

Important Concept

Diagnosis = Why the patient received care.

Procedure = What was done.

The diagnosis must support the medical necessity of the procedure when required by the payer.

13. PLACE OF SERVICE (POS)

POS codes identify where healthcare services were provided.

Common examples:

11 — Office

12 — Home

21 — Inpatient hospital

22 — Hospital outpatient

23 — Emergency department

24 — Ambulatory surgical center

31 — Skilled nursing facility

32 — Nursing facility

81 — Independent laboratory

Always select the POS that accurately represents where the service occurred.

14. CMS-1500 CLAIM FORM

The CMS-1500 is used primarily for professional claims.

Important information includes:

Patient information
Subscriber information
Provider information
Diagnosis codes
Procedure codes
Modifiers
Charges
Units
Place of service
Dates of service
NPI

NPI

National Provider Identifier

A unique 10-digit identifier for healthcare providers and organizations covered by HIPAA.

15. UB-04 / CMS-1450

The UB-04/CMS-1450 is primarily used for institutional claims.

Common users include:

Hospitals
Skilled nursing facilities
Other institutional providers

Important UB-04 Information

Patient information
Provider information
Revenue codes
Diagnosis codes
Procedure information
Type of bill
Charges

16. REVENUE CODES

Revenue codes identify specific hospital/institutional services or departments.

They are used primarily on institutional claims.

Example

A revenue code may identify services associated with:

Room charges
Emergency services
Laboratory
Radiology
Pharmacy

17. TYPE OF BILL (TOB)

The Type of Bill code identifies the type of institutional claim being submitted.

It communicates information about:

Facility
Type of care
Claim frequency

18. CLAIMS PROCESS

Step 1 — Patient Registration

Collect:

Demographics
Insurance information
Subscriber information
Contact information

Step 2 — Verify Insurance

Confirm:

Eligibility
Coverage
Effective dates
Benefits
Copay
Deductible
Coinsurance
Prior authorization requirements

Step 3 — Documentation

Provider documents services and diagnoses.

Step 4 — Coding

Coder assigns:

ICD-10-CM
CPT
HCPCS Level II
Modifiers
POS

Step 5 — Claim Creation

Claim information is entered into the billing system.

Step 6 — Claim Scrubbing

Claim is checked for errors before submission.

Step 7 — Claim Submission

Claim is submitted electronically or by another permitted method.

Step 8 — Payer Adjudication

Insurance company processes the claim.

Step 9 — Payment/Denial

Payer may:

Pay
Partially pay
Reject
Deny

Step 10 — Patient Billing

Remaining patient responsibility is billed when appropriate.

19. CLAIM REJECTION VS. CLAIM DENIAL

Rejection

A claim is rejected because it contains an error that prevents it from being processed.

Examples:

Invalid patient information
Invalid NPI
Missing required information
Invalid code
Formatting error

Rejection = Fix the error and resubmit.

Denial

A claim was processed by the payer but payment was not made as billed.

Examples:

Medical necessity issue
Noncovered service
Lack of authorization
Timely filing
Incorrect coding

Denial = Determine why it was denied and take appropriate action.

20. CLAIM DENIAL MANAGEMENT

When a claim is denied:

Review the denial reason.
Review the claim.
Review medical documentation.
Determine whether the denial is correct.
Correct the issue if appropriate.
Submit a corrected claim or appeal when appropriate.
Track the claim.
Document the resolution.

21. APPEALS

An appeal is a formal request asking the payer to reconsider a denied claim.

An appeal may include:

Appeal letter
Medical records
Provider documentation
Relevant coding information
Explanation of medical necessity
Supporting payer policies

Always follow the payer’s appeal requirements and deadlines.

22. CLEAN CLAIM

A clean claim contains the required information and can be processed without needing additional information or correction.

Common clean-claim requirements include:

Correct patient information
Correct insurance information
Valid provider information
Correct diagnosis codes
Correct procedure codes
Correct modifiers
Correct POS
Correct dates
Accurate charges
Required authorization/referral information

23. ELECTRONIC CLAIMS

EDI

Electronic Data Interchange

Allows healthcare information to be electronically exchanged in standardized formats.

Clearinghouse

A clearinghouse acts as an intermediary between the provider and payer.

Typical process:

Provider → Clearinghouse → Payer

The clearinghouse may:

Check claims
Identify errors
Format claims
Route claims to payers

24. ELIGIBILITY & BENEFITS

Eligibility

Determines whether the patient has active insurance coverage.

Deductible

Amount the patient must generally pay before the insurance plan begins paying for covered services according to the plan.

Copayment

A fixed amount the patient pays for a covered service.

Coinsurance

A percentage of the allowed amount that the patient is responsible for after applicable deductible requirements.

Premium

Amount paid to maintain insurance coverage.

Allowed Amount

The maximum amount a payer recognizes for a covered service under the applicable plan.

25. INSURANCE PLANS

HMO

Health Maintenance Organization.

Typically emphasizes a network and coordinated care, often involving a primary care provider.

PPO

Preferred Provider Organization.

Typically provides more flexibility in choosing providers and may allow out-of-network care at a higher cost.

POS

Point-of-Service plan.

Combines features associated with HMO and PPO plans.

EPO

Exclusive Provider Organization.

Typically requires use of in-network providers except for emergencies.

26. MEDICARE

Medicare is a federal health insurance program.

Part A

Hospital insurance.

Generally includes:

Inpatient hospital care
Skilled nursing facility care under qualifying circumstances
Hospice
Certain home health services

Part B

Medical insurance.

Generally includes:

Physician services
Outpatient services
Preventive services
Certain medical equipment

Part C

Medicare Advantage.

Private Medicare-approved plans that provide Medicare benefits.

Part D

Prescription drug coverage.

27. MEDICAID

Medicaid is a joint federal and state program providing health coverage to eligible individuals.

Eligibility and program details vary by state.

Key Difference

Medicare = primarily federal program based on age/disability eligibility.

Medicaid = joint federal/state program based largely on financial and other eligibility requirements.

28. TRICARE

TRICARE provides healthcare coverage for eligible members of the military community, including qualifying:

Active-duty service members
Retirees
Family members
Survivors

Always verify the patient’s specific TRICARE plan and eligibility.

29. COORDINATION OF BENEFITS (COB)

COB determines which insurance plan pays first when a patient has more than one insurance plan.

Primary Payer

Pays first.

Secondary Payer

May consider remaining eligible charges after the primary payer processes the claim.

Important

Always verify the patient’s insurance information and payer order.

30. CLAIM ADJUDICATION

Adjudication is the payer’s process of reviewing a claim and determining how it will be paid.

The payer may determine:

Covered services
Allowed amount
Patient responsibility
Payment
Denial
Adjustment

31. EOB

Explanation of Benefits

An EOB explains how an insurance claim was processed.

It may show:

Amount billed
Allowed amount
Insurance payment
Adjustments
Deductible
Coinsurance
Copayment
Patient responsibility
Denial information

Important

An EOB is generally NOT a bill.

32. ERA

Electronic Remittance Advice

An electronic explanation of how a payer processed a claim.

It provides payment and adjustment information to the healthcare provider.

33. HIPAA TRANSACTION STANDARDS

Common electronic healthcare transactions include:

837 — Healthcare claim.

835 — Electronic remittance advice.

270 — Eligibility inquiry.

271 — Eligibility response.

276 — Claim status inquiry.

277 — Claim status response.

34. COMPLIANCE

Medical billers and coders must follow:

Federal laws
State laws
Payer requirements
HIPAA
Coding guidelines
Organizational policies

Fraud

Knowingly submitting false information to obtain payment.

Abuse

Practices that may result in unnecessary costs or improper payment without necessarily involving intentional deception.

Examples

Fraud: Billing for services never provided.

Abuse: Repeatedly billing incorrectly or unnecessarily in ways that create improper costs.

35. UPcoding

Upcoding occurs when a provider reports a higher-level service than what was actually performed or documented.

This can result in improper reimbursement.

36. Unbundling

Unbundling occurs when services that should be reported as a single comprehensive code are incorrectly reported separately to increase reimbursement.

37. MEDICAL BILLER RESPONSIBILITIES

Medical billers may be responsible for:

Patient registration
Insurance verification
Charge entry
Claim preparation
Claim submission
Payment posting
Denial management
Accounts receivable
Patient statements
Appeals
Insurance follow-up
Maintaining accurate records
Protecting PHI

38. ACCOUNTS RECEIVABLE (A/R)

Accounts receivable is money owed to the healthcare organization.

A/R follow-up may include:

Reviewing unpaid claims
Contacting insurance companies
Correcting claim problems
Appealing denials
Posting payments
Following up on patient balances

Aging Reports

A/R aging reports organize unpaid balances based on how long they have been outstanding.

Common categories:

0–30 days
31–60 days
61–90 days
91–120 days
120+ days

Older accounts generally require increased attention.

39. PAYMENT POSTING

Payment posting involves recording:

Insurance payments
Patient payments
Adjustments
Denials
Contractual adjustments
Refunds when applicable

The posted payment should match the payer’s remittance information.

40. PATIENT FINANCIAL RESPONSIBILITY

Patient responsibility may include:

Copay
Deductible
Coinsurance
Noncovered services
Other amounts permitted by the patient’s plan and applicable law

Never bill the patient for amounts that should be adjusted according to payer contracts or applicable rules.

41. PRIOR AUTHORIZATION

Prior authorization is approval from an insurance payer before certain services are performed.

Failure to obtain required authorization can result in denial.

Important

Prior authorization ≠ guarantee of payment.

Coverage and payment can still depend on eligibility, medical necessity, coding, and other requirements.

42. REFERRALS

A referral is authorization or direction from one healthcare provider to another for evaluation or treatment.

Some insurance plans require referrals for certain services.

43. TIMELY FILING

Timely filing limit is the deadline established by a payer for submitting a claim.

Missing the deadline can result in denial.

Best Practice

Submit claims as quickly and accurately as possible.

44. PATIENT IDENTIFIERS

Common patient identifiers include:

Name
Date of birth
Address
Member ID
Account number
Other permitted identifiers

Always verify patient identity before accessing or discussing PHI.

45. COMMON MEDICAL ABBREVIATIONS

BP — Blood pressure
HR — Heart rate
RR — Respiratory rate
BMI — Body mass index
CBC — Complete blood count
CMP — Comprehensive metabolic panel
ECG/EKG — Electrocardiogram
MRI — Magnetic resonance imaging
CT — Computed tomography
CXR — Chest X-ray
UTI — Urinary tract infection
URI — Upper respiratory infection
SOB — Shortness of breath
NPO — Nothing by mouth
PRN — As needed
BID — Twice daily
TID — Three times daily
QID — Four times daily
PO — By mouth
IM — Intramuscular
IV — Intravenous

46. HIGH-YIELD CODING RULES

Remember these:

Never code directly from the Alphabetic Index.
Always verify ICD-10-CM codes in the Tabular List.
Code to the highest level of specificity supported by documentation.
Never assume a diagnosis.
Never code undocumented conditions.
Use laterality when available.
Check Excludes1 and Excludes2 notes.
Follow “Code First” instructions.
Follow “Use Additional Code” instructions.
Make sure diagnosis codes support medical necessity when required.
Use modifiers only when documentation supports them.
Verify payer-specific requirements.

47. HIGH-YIELD BILLING RULES

Verify insurance before services whenever possible.
Confirm eligibility.
Check authorization requirements.
Submit accurate claims.
Correct rejected claims.
Investigate denied claims.
Appeal appropriate denials.
Monitor timely filing.
Post payments accurately.
Protect PHI.
Follow payer contracts.
Document billing activity.

48. MUST-KNOW COMPARISONS

ICD-10-CM vs CPT

ICD-10-CM = Diagnosis

CPT = Procedure/service

CPT vs HCPCS Level II

CPT = Procedures/services

HCPCS Level II = Supplies, equipment, medications, ambulance, and other services

CMS-1500 vs UB-04

CMS-1500 = Professional claim

UB-04 = Institutional claim

Rejection vs Denial

Rejection = Claim cannot be processed because of an error.

Denial = Claim was processed but payment was denied or not allowed as billed.

EOB vs ERA

EOB = Explanation of Benefits

ERA = Electronic Remittance Advice

Deductible vs Copay vs Coinsurance

Deductible = Amount paid before applicable insurance benefits begin paying.

Copay = Fixed dollar amount.

Coinsurance = Percentage of allowed amount.

49. EXAM MEMORY TRICKS

“WHY vs WHAT”

ICD-10-CM = WHY

Why did the patient receive healthcare?

CPT = WHAT

What service/procedure was performed?

“1500 = PROFESSIONAL”

CMS-1500 → Professional claims.

“UB = FACILITY”

UB-04 → Institutional/facility claims.

“REJECTION = REPAIR”

Rejected claim → Fix it and resubmit.

“DENIAL = DETERMINE”

Denied claim → Determine why and take appropriate action.

“25 = E/M EXTRA”

Modifier -25 → Significant, separately identifiable E/M service on same day as another service.

“26 = DOCTOR”

Modifier -26 → Professional component.

“TC = TECHNICAL”

Modifier -TC → Technical component.

“59 = SEPARATE”

Modifier -59 → Distinct procedural service.

50. FINAL NHA EXAM CHECKLIST

Before taking the exam, make sure you can explain:

□ Medical terminology
□ Anatomy and physiology
□ Medical record documentation
□ HIPAA
□ PHI
□ Medical ethics
□ ICD-10-CM
□ CPT
□ HCPCS Level II
□ CPT modifiers
□ Place of Service codes
□ CMS-1500
□ UB-04
□ Revenue codes
□ Type of Bill
□ NPI
□ Medical necessity
□ Insurance verification
□ Eligibility
□ Deductibles
□ Copays
□ Coinsurance
□ Prior authorization
□ Referrals
□ Coordination of benefits
□ Medicare Parts A-D
□ Medicaid
□ TRICARE
□ EDI
□ Clearinghouses
□ Claim scrubbers
□ Clean claims
□ Claim rejections
□ Claim denials
□ Appeals
□ Timely filing
□ EOB
□ ERA
□ Payment posting
□ Accounts receivable
□ Fraud
□ Abuse
□ Upcoding
□ Unbundling
□ Patient responsibility
□ Compliance
□ Claims processing