CHAPTER Insurance and Coding 7.

CHAPTER Insurance and Coding 7

Learning Outcomes After studying this chapter, you will be able to:
7.1 Define medical insurance and coding terminology. 7.2 Explain the differences among the types of insurance plans. 7.3 Compare and contrast PAR and nonPAR and the methods insurance companies use to determine how much a provider is paid. .

Learning Outcomes (cont.)
After studying this chapter, you will be able to: 7.4 Apply ICD-10-CM conventions, abbreviations, and guidelines to properly code diagnoses in an outpatient setting. 7.5 Apply CPT conventions and guidelines to properly code procedures and supplies in an outpatient setting. 7.6 Explain the effects of coding compliance errors on the revenue cycle in the medical office setting.

Key Terms Centers for Medicare and Medicaid Services (CMS)
CHAMPVA code linkage coinsurance coordination of benefits (COB) copayment (copay) accepting assignment allowed charge assignment of benefits balance billing birthday rule Blue Cross and Blue Shield Association (BCBS) capitation carrier Teaching Notes: Review the chapter terms; define, spell, and pronounce the terms out loud if necessary. As an administrative medical assistant, you must know the meaning of each key term. Knowing the definition of these terms promotes confidence in communication with patients and coworkers.

Key Terms (cont.) CPT HMO (health maintenance organization)
customary fee deductible Defense Enrollment Eligibility Reporting System (DEERS) diagnosis-related groups (DRGs) fee-for-service HCPCS HMO (health maintenance organization) ICD-10-CM ICD-10-PCS indemnity plan insured managed care Medicaid Medicare Teaching Notes: Review the chapter terms; define, spell, and pronounce the terms out loud if necessary. As an administrative medical assistant, you must know the meaning of each key term. Knowing the definition of these terms promotes confidence in communication with patients and coworkers.

Key Terms (cont.) participating (PAR) provider reasonable fee referral
patient encounter form PPO (preferred provider organization) preauthorization premium primary care provider (PCP) provider reasonable fee referral relative value scale (RVS) resource-based relative value scale (RBRVS) sponsor third-party payer TRICARE usual fee workers’ compensation Teaching Notes: Review the chapter terms; define, spell, and pronounce the terms out loud if necessary. As an administrative medical assistant, you must know the meaning of each key term. Knowing the definition of these terms promotes confidence in communication with patients and coworkers.

7.1 Insurance Terminology
The medical insurance contract Insured Premium Third-party payer Coordination of benefits The birthday rule Learning Outcome 7.1: Define medical insurance and coding terminology. Teaching Notes: Medical insurance is a policy, or certificate of coverage, between a person, called the “policyholder,” and an insurance company, or carrier. The policyholder pays a certain amount of money to the insurance company in return for benefits. Insured. The person who takes out the insurance policy is referred to as the insured. Since a medical insurance policy often covers the insured and the insured’s dependents, in the strict sense of the term, policyholder refers to the person in whose name the policy is written (the person who is responsible for making payments) and the term insured refers to anyone, such as the policyholder or a spouse, covered by the medical policy. Premium. The rate charged to the policyholder for the insurance policy is the premium. Premiums are usually paid by the policyholder on a regular basis—for example, monthly or quarterly. Third-party payer. In the case of a policy with an insurance company, in which the insurance company agrees to carry the risk of paying for those services, the insurance company is referred to as the “third-party payer.” Coordination of benefits. A patient who has two or more insurance policies can have a maximum benefit of only up to 100 percent of the health costs. If the insurance companies do not communicate with each other, there is the possibility that more than 100 percent of the cost of the covered services will be reimbursed. Under the terms of the coordination-of-benefits clause, one insurance carrier is named the primary carrier. The clause explains how the policy will pay—whether as a primary or secondary carrier—if more than one insurance policy applies to the claim. The birthday rule. The birthday rule is used as a guideline for determining which of two parents with medical coverage has the primary insurance for a child. The rule states that the policy of the insured with the earlier birthday in the calendar year is the primary policy.

7.1 Insurance Terminology (cont.)
Types of medical insurance coverage: Basic Medical Hospital Surgical Major medical Disability Dental insurance Vision care Learning Outcome 7.1: Define medical insurance and coding terminology. Teaching Notes: Types of medical insurance coverage can be purchased in a variety of forms for different levels of coverage. The greater the coverage, the more expensive the plan. It can also be purchased for a group or for an individual. • Basic: A basic insurance plan generally includes coverage of hospitalization, lab tests, surgery, and x-rays. • Medical: Medical insurance covers benefits for outpatient medical care. An outpatient is a person who receives medical care at a hospital or other medical facility but is generally admitted for less than 23 hours. The term medical refers to the physician’s costs for nonsurgical services. • Hospital: Hospital insurance provides protection against the costs of inpatient hospital care. • Surgical: Surgical insurance provides protection for the cost of a physician’s fee for surgery, whether it is performed in a hospital, in a physician’s office, or elsewhere. • Major medical: Major medical insurance offers protection from large medical expenses. • Disability: Disability insurance provides reimbursement for income lost because of the insured person’s inability to work as a result of an illness or injury. • Dental insurance: Dental insurance can be obtained, often under a separate policy, to cover all or part of the costs of dental cost. • Vision care: Vision insurance can be obtained, often under a separate policy, to cover all or part of eye care cost.

7.2 Insurance Plans: Identifying Plans and Payers
Payment methods that insurance companies use: Fee-for-service Made by the insurance carrier after the patient has received medical services The insured pays for the medical services at the time of receiving them, and the insurance carrier reimburses the insured after receiving an insurance claim; alternatively, the insured may instruct the carrier to pay the physician directly Capitation: payment is made in advance Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: There are many medical insurance plans from which people can choose. Most insurance plans use one of two payment methods: fee-for-service or capitation. Fee-for-service. Payment is made by the insurance carrier after the patient has received medical services. The insured pays for the medical services at the time of receiving them, and the insurance carrier reimburses the insured after receiving an insurance claim. Capitation. Prepayment is made by the insurance carrier of a fixed (per capita, or per head) amount to a physician to cover the healthcare services for each member of one of its plans for a specified period of time, such as for a month.

7.2 Insurance Plans: Identifying Plans and Payers (cont.)
Types of medical insurance plans: Indemnity plans: under most indemnity plans, the insurance company reimburses medical costs on a fee-for-service basis Three conditions that must be met before reimbursement is made: The policy’s premium payment must be up-to-date A deductible has been paid Any coinsurance has been taken into account Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: Most medical insurance plans fall into one of two categories, depending on their payment arrangements. Plans that use a fee-for-service payment arrangement are mostly indemnity plans. Those that use capitation are generally managed care plans. Indemnity plans. Under most indemnity plans, the insurance company reimburses medical costs on a fee-for-service basis. This type of plan pays for a percentage of the allowable cost, and the patient is responsible for the remaining portion. Patients receive medical services from the providers they choose, who usually file the required claims for payment on behalf of patients.

Managed care plans Two main types of managed care plans: HMOs PPOs HMOs attempt to control costs by using a number of methods: Restricting patients’ choice of providers Requiring cost sharing Requiring preauthorization/precertification for services Controlling access to services Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: Managed care plans generally use capitation as the basis for making payments to physicians. These plans are the predominant type of medical insurance in the United States. There are two main types of managed care plans—HMOs and PPOs. An HMO (health maintenance organization) is a medical center or a designated group of physicians that provides medical services to insured persons for a monthly or an annual premium. HMOs attempt to control costs by using a number of methods. -Restricting patients’ choice of providers: The insurance will not cover visits to out-of-network providers. -Requiring cost sharing: When HMO members visit their physician, they pay a lower set charge called a copayment (co-pay). -Requiring preauthorization/precertification for services: This enables the HMO to verify ahead of time that the service is medically necessary and is covered under the patient’s policy. -Controlling access to services: In HMOs, patients are required to select a primary care provider (PCP). The PCP’s role is to act as a gatekeeper, coordinating patients’ overall care and ensuring that all services provided are, in the PCP’s judgment, necessary.

Preferred provider organization The PPO (preferred provider organization) contracts to perform services for PPO members at specified rates; these rates, or fees, are generally lower than the fees charged to regular patients The PPO gives the insured a list of PPO providers from which to receive healthcare at PPO rates Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: The PPO (preferred provider organization) contracts to perform services for PPO members at specified rates. The PPO gives the insured a list of PPO providers from which to receive healthcare at PPO rates. If a patient chooses to receive treatment from a provider who is not in the PPO network, the patient has to pay more—usually a higher copayment or deductible or any difference between the PPO’s rate and the outside provider’s rate.

Medical insurance payers Private-sector payers: Made up chiefly of a few very large national firms that offer all the leading types of insurance plans Medicare: A federal health plan that provides insurance to citizens and permanent residents aged 65 and older; people with disabilities, including kidney failure; and spouses of entitled individuals Medicare is divided into four parts: Part A, hospital insurance; Part B, medical insurance; Part C, Medicare Advantage; Part D, prescription drug coverage Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: Medical insurance plans, whether indemnity plans or managed care plans, are available through commercial insurance companies in the private sector, such as Aetna or WellPoint, Inc. Medicare is a federal health plan that provides insurance to citizens and permanent residents aged 65 and older; people with disabilities, including kidney failure; and spouses of entitled individuals. Medicare is divided into four parts: - Medicare Part A pays for in-hospital services - Medicare Part B pays for outpatient services - Medicare Part C is a supplemental coverage Medicare Part D covers prescription drugs

Medicaid: A health benefit program, jointly funded by federal and state governments, that is designed for people with low incomes who cannot afford medical care TRICARE (formerly CHAMPUS ): The Department of Defense’s health insurance plan for military personnel (referred to as sponsors) and their families CHAMPVA: Stands for Civilian Health and Medical Program of the Veterans Administration; is a government health insurance program that covers the expenses of the families of veterans with total, permanent, service-connected disabilities Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: Medicaid is a health benefit program, jointly funded by federal and state governments, that is designed for people with low incomes who cannot afford medical care. Each state formulates its own Medicaid program under broad federal guidelines. As a result, programs vary in coverage and benefits from state to state. TRICARE (formerly CHAMPUS) is the Department of Defense’s health insurance plan for military personnel (referred to as sponsors) and their families. Those eligible include active or retired members of the following uniformed services and their families: the U.S. Army, Navy, Marines, Air Force, Coast Guard, Public Health Service, and National Oceanic and Atmospheric Administration. Coverage also applies to the dependents of military personnel killed while on active duty. CHAMPVA, which stands for Civilian Health and Medical Program of the Veterans Administration, is a government health insurance program that covers the expenses of the families of veterans with total, permanent, service-connected disabilities. It also covers surviving spouses and dependent children of veterans who died in the line of duty.

Workers’ compensation: Each state has its own workers’ compensation laws to guarantee that an employee who is injured or who becomes ill in the course of employment will have adequate medical care and an adequate means of support while unable to work Five categories of work-related injuries: Injury without disability Injury with temporary disability Injury with permanent disability Injury requiring vocational rehabilitation Injury resulting in death Learning Outcome 7.2: Explain the differences among the types of insurance plans. Teaching Notes: Workers’ compensation. The employer must obtain insurance against workers’ compensation liability and is liable whether or not the employee is at fault for an accident or injury. Workers’ compensation insurance operates under the jurisdiction of the state department of labor or an industrial commission. Work-related injuries are grouped into five categories, which are defined by the state and administered by its department of labor: • Injury without disability • Injury with temporary disability • Injury with permanent disability • Injury requiring vocational rehabilitation • Injury resulting in death

7.3 Participation and Payment Methods
Plan participation PAR: A physician who joins an insurance plan is a participating (PAR) provider in that plan; as a participating provider, the physician agrees to provide medical services to the insurance plan members according to the plan’s rules and payment schedules nonPAR: A nonparticipating provider, or nonPAR, chooses not to join a particular insurance plan; a nonPAR physician who treats members of a plan does not have to obey the rules or follow the payment schedule of that plan; at the same time, a nonPAR physician will not receive any of the benefits of participation Learning Outcome 7.3: Compare and contrast PAR and nonPAR and the methods insurance companies use to determine how much a provider is paid. Teaching Notes: Plan participation. A physician who joins an insurance plan is a participating (PAR) provider in that plan. As a participating provider, the physician agrees to provide medical services to the insurance plan members according to the plan’s rules and payment schedules. The insurance carrier offers various incentives, such as faster payment, to participating providers. A nonparticipating provider, or nonPAR, chooses not to join a particular insurance plan. A nonPAR physician who treats members of a plan does not have to obey the rules or follow the payment schedule of that plan. At the same time, a nonPAR physician will not receive any of the benefits of participation.

7.3 Participation and Payment Methods (cont.)
Fee schedules In a private managed care plan, contracts that set fees are often negotiated between the insurance company and the physician In Medicare, the Centers for Medicare and Medicaid Services (CMS) is responsible for setting up the terms of the plan, referred to as the Medicare Fee Schedule (MFS) Learning Outcome 7.3: Compare and contrast PAR and nonPAR and the methods insurance companies use to determine how much a provider is paid. Teaching Notes: Fee schedules. In a private managed care plan, contracts that set fees are often negotiated between the insurance company and the physician. In Medicare, the Centers for Medicare and Medicaid Services (CMS) is responsible for setting up the terms of the plan, referred to as the Medicare Fee Schedule (MFS).

7.3 Participation and Payment Methods (cont.)
Payment concepts Allowed charge Balance billing Accepting assignment Assignment of benefits UCR fees Relative value scale (RVS) Resource-based relative value scale (RBRVS) Diagnosis-related groups (DRGs) Learning Outcome 7.3: Compare and contrast PAR and nonPAR and the methods insurance companies use to determine how much a provider is paid. Teaching Notes: The following is a list of the basic payment concepts used in insurance contracts regarding methods of making payments to providers: -Allowed charge: When insurance companies set up the payment terms for an insurance contract -Balance billing: When the amount the physician charges is more than the insurance company’s allowed charge -Accepting assignment: A PAR provider who agrees to accept the allowed charge set forth by the insurance company as payment in full for a service and not bill the patient for the balance -Assignment of benefits: A physician who accepts an assignment of benefits agrees to receive payment directly from the patient’s insurance carrier -UCR fees: Third-party payers, to set the rates they pay providers, analyze providers’ usual fees and establish a schedule of UCR (for usual, customary, and reasonable) fees for each procedure -RVS (relative value scale): A relative value scale sets fees for medical services based on an analysis of the skill and time required to provide them -RBRVS (resource-based relative value scale): The payment system used by Medicare is the resource-based relative value scale -DRGs (diagnosis-related groups): Another payment system, used by Medicare for establishing payment for hospital stays, is diagnosis-related groups

7.4 Diagnostic Coding Two medical coding systems:
Diagnostic coding: Codes for reporting what is wrong with the patient or what brought the patient to see the physician Procedural coding: Codes for reporting each procedure and service the physician performed in treating the patient Learning Outcome 7.4: Apply ICD-10-CM conventions, abbreviations, and guidelines to properly code diagnoses in an outpatient setting. Teaching Notes: To keep track of the many thousands of possible diagnoses and of procedures and services rendered by physicians, and to simplify the process of verifying the medical necessity of each procedure, diagnostic and procedural coding systems are used.

7.4 Diagnostic Coding (cont.)
Basic steps in diagnostic coding: Locate the diagnostic statement in the patient’s medical record Find the diagnosis in the ICD-10-CM’s Alphabetic Index; look for the condition first, then find descriptive words that make the condition more specific, such as the location or acute vs. chronic Locate the code in the Tabular Index Read all category, subcategory, and subclassification information to obtain the code that corresponds to the patient’s specific disease or condition Learning Outcome 7.4: Apply ICD-10-CM conventions, abbreviations, and guidelines to properly code diagnoses in an outpatient setting. Teaching Notes: Accurate diagnostic coding gives insurance carriers clearly defined diagnoses to help them process claims efficiently. An error in coding conveys to an insurance carrier the wrong reason a patient received medical services; therefore, there are basic steps in diagnostic coding, as shown below. Determine the main term or condition of the diagnosis. Look for the first condition or diagnosis in the ICD-10-CMʼs Alphabetic Index. Locate the code in the Tabular Index. Obtain the code that corresponds to the patient’s specific disease or condition. Record the diagnosis code in the medical record or on the insurance claim form.

7.5 Procedural Coding The procedural coding system classifies services rendered by physicians; each procedure code represents a medical, surgical, or diagnostic service performed by a provider CPT-4: The most commonly used system of procedure codes is found in Current Procedural Terminology, Fourth Edition, a book published by the American Medical Association and known as the CPT CPT organization Learning Outcome 7.5: Apply CPT conventions and guidelines to properly code procedures and supplies in an outpatient setting. Teaching Notes: The most commonly used system of procedure codes is found in Current Procedural Terminology, Fourth Edition, a book published by the American Medical Association and known as the CPT. The procedural coding system classifies services rendered by physicians.

7.5 Procedural Coding (cont.)
Coding evaluation and management services: Three key factors documented in the patient’s medical record help determine the level of service: The extent of the patient history taken The extent of the examination conducted The complexity of the medical decision making Learning Outcome 7.5: Apply CPT conventions and guidelines to properly code procedures and supplies in an outpatient setting. Teaching Notes: CPT codes are five-digit numbers, organized into six sections. With the exception of the first two sections, the CPT is arranged in numeric order. Codes for evaluation and management are listed first; in the guidelines to the Evaluation and Management (E/M) section, the CPT explains how to code different levels of these services. Three key factors documented in the patient’s medical record help determine the level of service.

7.5 Procedural Coding (cont.)
Basic steps in procedural coding: Become familiar with the CPT Find the services that were provided Look up the procedure code Determine appropriate modifiers Record the procedure code Learning Outcome 7.5: Apply CPT conventions and guidelines to properly code procedures and supplies in an outpatient setting. Teaching Notes: Procedure codes are located by referring to the CPT ’s index, an alphabetic list of procedures, organs, and conditions in the back of the book. Boldface main terms may be followed by descriptions and groups of indented terms. The coder selects the correct code by reviewing each description and indented term under the main term. One or more two-digit modifiers may need to be assigned to the five-digit main number. Modifiers are written with a hyphen before the two-digit number. Modifiers show that some special circumstance applies to the service or procedure the physician performed. These are the five basic steps used for finding procedure codes in the CPT manual.

7.6 Coding Compliance Correctly linked codes that support medical necessity meet the following conditions: The CPT-4 procedure codes match the ICD-10-CM diagnosis codes The procedures are not elective, experimental, or nonessential The procedures are furnished at an appropriate level Learning Outcome 7.6: Explain the effects of coding compliance errors on the revenue cycle in the medical office setting. Teaching Notes: Claims are denied because of lack of medical necessity when the reported services are not consistent with the symptoms or the diagnosis and when they are not in keeping with generally accepted professional medical standards. Correctly linked codes that support medical necessity meet these conditions.

7.6 Coding Compliance (cont.)
Common coding errors: Reporting diagnosis codes that are not at the highest level of specificity available Using out-of-date codes Altering documentation after the services are reported Coding without proper documentation to back up the codes selected Reporting services provided by unlicensed or unqualified clinical personnel Learning Outcome 7.6: Explain the effects of coding compliance errors on the revenue cycle in the medical office setting. Teaching Notes: Common coding errors. There are many factors that contribute to coding errors. Some of the more common coding errors include the following: • Reporting diagnosis codes that are not at the highest level of specificity available • Using outdated codes • Altering documentation after the services are reported • Coding without proper documentation to back up the codes selected • Reporting services provided by unlicensed or unqualified clinical personnel

7.6 Coding Compliance (cont.)
Common coding errors (cont.): Reporting services that are not covered or that have limited coverage Using modifiers incorrectly, or not at all Upcoding—using a procedure code that provides a higher reimbursement rate than the code that actually reflects the service provided Unbundling—billing the parts of a bundled procedure as separate procedures Learning Outcome 7.6: Explain the effects of coding compliance errors on the revenue cycle in the medical office setting. Teaching Notes: Common coding errors (continued): • Reporting services that are not covered or that have limited coverage • Using modifiers incorrectly, or not at all • Upcoding—using a procedure code that provides a higher reimbursement rate than the code that actually reflects the service provided • Unbundling—billing the parts of a bundled procedure as separate procedures Most medical practices have a system, formal or informal, for evaluating coding errors in an effort to achieve better coding compliance.

Chapter 7 Summary 7-27 Learning Outcomes Key Concepts
7.1 Define medical insurance and coding terminology. Administrative medical assistants should be familiar with basic terms and concepts of medical insurance, including coding and compliance. Insurance carriers may use different terminology, and medical office personnel need to know current terminology.

Chapter 7 Summary (cont.)
Learning Outcomes Key Concepts 7.2 Explain differences among the types of insurance plans. Indemnity plans are usually fee-for-service plans that pay after services are provided. They offer benefits in exchange for regular payments of a fixed premium by the insured. Managed care plans, in contrast, often use capitation payments, which are fixed, prospective payments made for services to be provided during a specified period of time. It is common to base capitation rates on gender and age.

Learning Outcomes Key Concepts In an HMO, patients agree to receive services from providers who have contracts with the HMO; usually, a PCP coordinates the patient’s care and makes referrals. In a PPO, patients are offered lower fees in exchange for receiving services from plan providers but are usually not required to choose a PCP.

Learning Outcomes Key Concepts 7.3 Compare and contrast PAR and nonPAR and the methods used by insurance companies to determine how much a provider is paid. PAR providers agree to render medical services to plan members according to the plan’s rules and payment schedules; a nonPAR provider is not contractually obligated to abide by the rules or the payment schedule when treating members. PAR providers receive a direct benefit payment from the insurance carrier through an agreed upon assignment of benefits; a nonPAR provider collects payment from the patient at the time of service and the patient receives payment from the insurance carrier.

Learning Outcomes Key Concepts Common types of payment systems used by third-party payers for reimbursing physicians are based on: usual, customary, and reasonable (UCR) fees; a relative value scale (RVS); a resource-based relative value scale (RBRVS); or diagnosis-related groups (DRGs).

Learning Outcomes Key Concepts 7.4 Apply ICD-10-CM conventions, abbreviations, and guidelines to properly code diagnoses in an outpatient setting. The ICD-10-CM is used to report patients’ conditions (diagnoses) on their medical records and on insurance claims. Codes consist of three to seven alphanumeric characters and a description. The Alphabetic Index is used first to locate the approximate correct code for a diagnosis. Next, the Tabular Index is used to verify and refine the final code selection. All conventions, abbreviations, instructional notes, and guidelines should be followed. The ICD-10-CM contains 21 chapters, each containing codes requiring high levels of specificity.

Learning Outcomes Key Concepts 7.5 Apply CPT conventions and guidelines to properly code procedures and supplies in an outpatient setting. CPT-4, a publication of the AMA, contains the most widely used system for physicians’ medical services and procedures. There are two levels of procedural codes: CPT-4 and HCPCS, which include temporary codes. CPT-4 codes are required for reporting physician services on insurance claim forms. Codes consist of five digits and a description. Modifiers may be used to indicate a change to the code description.

Learning Outcomes Key Concepts CPT-4 contains six sections of codes: Evaluation and Management Anesthesia Surgery Radiology Pathology and Laboratory Medicine HCPCS codes are used to code supplies, equipment, and procedures not listed in the CPT-4 . HCPCS codes are selected the same way as CPT-4 codes.

Learning Outcomes Key Concepts 7.6 Explain the effects of coding compliance errors on the revenue cycle in the medical office setting. Coding compliance is the process of coding using actions that satisfy federal official requirements and guidelines. Individual carrier guidelines must also be followed in order to be considered compliant.

Chapter 7 Review: True/False Questions
7-36 Chapter 7 Review: True/False Questions State whether the statement is true (T) or false (F) If the statement is false, tell why it is false. 1. (LO 7.1) Using the birthday rule, the primary policy for a child is the policy which covers the oldest adult. 2. (LO 7.1) To receive disability insurance benefits, the insured must have been injured on the job. 3. (LO 7.2) A deductible requires the insured to pay a stated monetary amount of covered services prior to insurance benefits being paid by the insurance carrier. 4. (LO 7.2) The phrase “80/20” within an insurance agreement represents the insured copayment. 5. (LO 7.3) The allowed charge and amount billed for the service are frequently the same amount. ANSWERS: 1. F: The birthday rule for primary insurance coverage is based on the individual whose birthday falls first in the calendar. 2. F: Disability covers both work-related and non-related injuries and diseases. 3. T 4. T 5. F: Usually, the allowed amount from the insurance carrier is less than the charged/billed amount.

Chapter 7 Review: True/False Questions
7-37 Chapter 7 Review: True/False Questions State whether the statement is true (T) or false (F) If the statement is false, tell why it is false. 6. (LO 7.3) PAR providers are commonly permitted by the insurance carrier to balance bill. 7. (LO 7.4) Use of a seventh digit in ICD-10-CM code is optional. 8. (LO 7.5) is an example of a CPT-4 code. 9. (LO 7.4) October 1, 2014, is the mandatory implementation for ICD-10-CM. 10. (LO 7.4) One of the advantages of ICD-10 is expandability within categories. ANSWERS: 6. F: Most PAR contracts state that balance billing is prohibited. 7. F: When available, the use of a seventh digit is mandatory. 8. T 9. T 10. T

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