AAPC-COC Certified Outpatient Coder - Set 3 - Part 1

Correct Answer: Federal Government contributions from general revenues

Part B is financed by monthly premiums of those who voluntarily enroll and by Federal Government contributions from general revenues. Premiums and contributions are deposited in the Federal Supplementary Medical Trust Fund. Option a is incorrect because payroll contributions from employees, employers and self-employed persons finance Part A, with proceeds deposited to the Federal Hospital Insurance Trust Fund rather than a Part B account. Option b is incorrect because State agencies certify facilities for participation, which is an administrative function; Medicare guidance does not describe it as a source of Part B financing. Option c is incorrect because those appropriations cover Part A benefits for persons who are not Social Security or railroad retirement beneficiaries, so they belong to hospital insurance.

Correct Answer: Hospital insurance and supplementary medical insurance

Medicare includes two related health insurance programs: hospital insurance (HI), known as Part A, and supplementary medical insurance (SMI), known as Part B. Part B is a voluntary program financed by enrollee premiums and federal funds. Option a is incorrect because home health services fall under Part A or Part B benefits and do not form a third program of their own. Option c is incorrect because hospice care is a service covered within Part A hospital insurance, not a stand-alone insurance program paired with Part B. Option d is incorrect because Medicaid is a separate program; facilities may take part in Medicare, Medicaid or both, so it is not one of Medicare's two parts.

Correct Answer: Federal Supplementary Medical Trust Fund

Part B is financed by monthly premiums of voluntary enrollees and Government contributions from general revenues. All of it is deposited in a separate account, the Federal Supplementary Medical Trust Fund, used only for Part B benefits and administrative expenses. Option a is incorrect because general revenues are a source of the Government's contribution, not the account that holds Part B premiums and contributions once they are collected. Option b is incorrect because it receives the separate payroll contributions that finance Part A and pays hospital insurance benefits, so Part B premiums are not deposited there. Option c is incorrect because the manual places Part B money in its own separate account, so merging it with Part A funds contradicts that structure.

Correct Answer: One-fourth of the inpatient hospital deductible

Under the Part A statute, coinsurance equal to one-fourth of the inpatient hospital deductible applies for each day after 60 days of services in a spell of illness, up to the 91st day. Day 75 falls in that range. Option a is incorrect because the statute sets this larger daily amount for days after the 90th day of services, so it does not reach a 75th-day service. Option b is incorrect because daily coinsurance begins once services have been furnished for 60 days in the spell, so day 75 is already past that point. Option d is incorrect because that deductible belongs to supplementary medical insurance, while inpatient hospital services fall under hospital insurance (Part A) with its own deductible and coinsurance rules.

Correct Answer: Part B home health coverage

Medicare requires the first 100 home health visits to be paid under Part A for a beneficiary entitled under Part A, and the remainder of the visits may be paid under Part B. Option b is incorrect because hospice requires entitlement to Part A and certification of terminal illness with a life expectancy of 6 months or less, which is a distinct benefit. Option c is incorrect because hospital insurance does cover inpatient hospital days, but those are a separate benefit with a day limit, not a source of payment for home health visits. Option d is incorrect because skilled nursing facility care is posthospital extended care in a facility, with its own 100-day limit, and does not describe visits in the patient's home.

Correct Answer: Enroll during an enrollment period and pay premiums

Supplementary Medical Insurance is a voluntary program. To obtain it, an eligible individual must enroll during an enrollment period and pay the required premiums, which are combined with federal contributions to finance the program. Option a is incorrect because the yearly cash deductible is cost-sharing applied before payment for covered services, so it comes after enrollment and is not a condition of enrolling. Option b is incorrect because Part B is a voluntary program for individuals who elect to enroll, so entitlement to Part A does not enroll anyone automatically. Option d is incorrect because the prior inpatient stay requirement applied to Part A home health services and was eliminated, and it never governed enrollment in Part B.

Correct Answer: Conditional Payment

A Conditional Payment is a Medicare payment conditioned upon reimbursement to Medicare, made for items or services for which another insurer is the primary payer. It is repaid when the primary plan makes payment. Option a is incorrect because it names the amount determined to be owed to Medicare in workers' compensation, no-fault, and liability matters, not a payment Medicare makes. Option b is incorrect because it is the forgiveness of a party's obligation to satisfy Medicare's claim, in whole or in part, when certain conditions are met. Option c is incorrect because it is a settlement in which the Regional Office or Central Office accepts less than the full debt owed to Medicare.

Correct Answer: Services of a private duty nurse or attendant

The exception to payment for nursing and related services states that Medicare does not pay for the services of a private duty nurse or attendant. A hospital or CAH employee at the time of service is not considered one. Option a is incorrect because medical social services are payable as inpatient services when the hospital or CAH ordinarily furnishes them for the care and treatment of inpatients. Option b is incorrect because nursing and related services fall within payable inpatient services under the same condition, and the exclusion applies to a private duty nurse rather than to ordinary inpatient nursing. Option d is incorrect because use of hospital or CAH facilities is payable when ordinarily furnished for inpatient care, so it is a covered category and not the stated exception.

Correct Answer: Arrangements

Under the Part A definitions, arrangements provide that Medicare payment made to the provider that arranged for the services discharges the liability of the beneficiary or any other person to pay for those services. Option a is incorrect because it is a provider that furnishes services free of charge or at a nominal charge, a description of the provider that says nothing about liability. Option c is incorrect because it refers to services for which the law and regulations authorize Medicare payment, which speaks to payment authority and not to whose liability a payment settles. Option d is incorrect because it means items and services a critical access hospital furnishes to its own inpatient that would be inpatient hospital services, so it is defined by setting.

Correct Answer: I and II

Under the regulation on statutory basis, Sections 1812 and 1813 together establish scope of benefits and set deductible and coinsurance requirements, and Section 1820 establishes the critical access hospital program. Statements I and II are accurate. Option b is incorrect because statement III credits Section 1862(a) with describing covered services and benefit periods, a role the regulation gives to Section 1861, while 1862(a) deals with exclusions. Option c is incorrect because statement IV misassigns exclusions from coverage to Sections 1814 and 1815, which actually set conditions for and limitations on payment for services furnished by providers. Option d is incorrect because both statements misattribute their subjects: covered services and benefit periods belong to Section 1861, and exclusions from coverage belong to Section 1862(a), so neither statement holds.

Correct Answer: A primary payment exceeding the Medicare-payable amount

Under 42 CFR 411.35(c)(1), if the primary payer's payment to the beneficiary exceeds the amount Medicare would pay, disregarding deductible and coinsurance, the provider or supplier may retain it in full. The paragraph (d) exception applies only to non-participating suppliers without assignment. Option a is incorrect because the regulation sets its own collection limits, and COB arrangements are not named; the guidance says private COB cannot supersede Federal law. Option b is incorrect because collection from the beneficiary is limited to the listed amounts, and the regulation does not allow seeking the whole difference between billed charges and Medicare payment. Option d is incorrect because a conditional payment is made on condition that the GHP or beneficiary reimburses Medicare, so it is a repayable Medicare benefit, not a retainable primary payment.

Correct Answer: First day of the following year

An election or change made during the annual, coordinated election period takes effect on the first day of the following year. Other election periods follow different effective-date rules under the same statute. Option b is incorrect because describes the timing for an election or change made during a continuous open enrollment period, which is a different election period from the annual, coordinated one. Option c is incorrect because applies to an election made during the initial coverage election period, when entitlement to Part A and enrollment under Part B set the start. Option d is incorrect because is the approach for elections made during other periods, where the Secretary sets the manner of effectiveness, not the annual, coordinated period.

Correct Answer: Through the plan of enrollment itself

Under 42 U.S.C. 1395w-101(a)(1)(B)(i), a part D eligible individual enrolled in an MA–PD plan obtains qualified prescription drug coverage through that plan, because an MA–PD plan is an MA plan that provides such coverage. Option a is incorrect because the statute bars an MA plan enrollee from enrolling in a prescription drug plan, and its exceptions cover only private fee-for-service and MSA enrollees, not MA–PD enrollees. Option b is incorrect because an MSA plan is a different MA plan type paired with a medical savings account, and its enrollees get drug coverage through a prescription drug plan. Option d is incorrect because the original fee-for-service program under Parts A and B delivers benefits other than qualified prescription drug benefits, so it is not the route to drug coverage.

Correct Answer: Enrollment in a prescription drug plan

The statute allows an enrollee in an MA private fee-for-service plan that does not provide qualified prescription drug coverage to obtain that coverage by enrolling in a prescription drug plan, an exception to the general limitation on MA enrollees. Option a is incorrect because the original fee-for-service program under parts A and B excludes qualified prescription drug benefits, so it cannot supply this coverage. Option c is incorrect because an MSA contribution belongs to the MSA plan type of Medicare+Choice coverage; it is not how the statute provides qualified prescription drug coverage for this enrollee. Option d is incorrect because the statute bars a part D eligible individual in an MA plan from enrolling in a prescription drug plan except in stated cases, and gives no route through a second MA plan.

Correct Answer: Hospital bed days

The six MTUS indicator values are no allowed services, ambulance transportation miles, anesthesia time units, services, oxygen units and units of blood. Hospital bed days is not among them, so it is the exception. Option a is incorrect because the indicator list names it, and the MTUS count then holds the actual time the anesthesiologist spent with the patient in 15 minute increments. Option b is incorrect because CMS includes this among the six indicator values, so the MTUS count field can report oxygen volume. Option d is incorrect because it is a listed indicator value, used when the MTUS count field shows miles for ambulance transportation on the line item.

Correct Answer: The secondary diagnosis was not present at the time of admission

The statute directs that when a selected secondary diagnosis code was not present at the time of admission, and would otherwise raise payment, the DRG assigned must be one that does not result in higher payment. Option a is incorrect because new technology add-on payments cover substantial clinical improvements that would be inadequately paid under the regular DRG; they do not limit the DRG assigned for a secondary diagnosis. Option c is incorrect because teaching hospital status triggers the indirect medical education add-on payment, which is a separate adjustment and has no role in this DRG restriction. Option d is incorrect because serving many low-income patients earns the disproportionate share hospital adjustment, a percentage increase applied to payment, not a restriction on which DRG is assigned.

Correct Answer: Services of an outside laboratory without arrangements

Medicare Part B does not pay for services furnished to a hospital outpatient by an outside entity unless the hospital has arrangements with it. Outside laboratory services without arrangements are not on the exception list. Option b is incorrect because the exception list expressly names qualified psychologist services as defined in section 1861(ii) of the Act, so they fall outside the limitation. Option c is incorrect because physician assistant services, as defined in the Social Security Act, are listed among the services to which the limitation does not apply. Option d is incorrect because anesthetist services, as defined in 42 CFR 410.69, appear on the list of services excepted from the limitation.

Correct Answer: Hospital located in the District of Columbia

The statute defines a subsection (d) hospital as one located in one of the fifty States or the District of Columbia, so location there is part of the definition, not an exclusion. Option a is incorrect because the statute removes any hospital whose average inpatient length of stay, as determined by the Secretary, is greater than 25 days. Option b is incorrect because the statute lists psychiatric hospitals first among the categories carved out of the subsection (d) hospital definition, so they sit outside that group. Option c is incorrect because rehabilitation hospitals, as defined by the Secretary, are named in the same exclusion list, which makes them a category removed from the definition.

Correct Answer: Indirect medical education adjustment

The indirect medical education (IME) adjustment is a percentage add-on for each case paid under the PPS at an approved teaching hospital. The percentage varies depending on the ratio of residents to beds. Option b is incorrect because it applies to cases involving approved new technologies that show substantial clinical improvement and would otherwise be inadequately paid, so hospital teaching status does not trigger it. Option c is incorrect because it is evaluated from the hospital's costs for a case and protects against large losses from unusually expensive cases, rather than varying with residents and beds. Option d is incorrect because it is the percentage add-on for hospitals that treat a high percentage of low-income patients and qualify under statutory formulas, not for teaching status.

Correct Answer: Covered OPD services

The statute requires the Secretary to develop a classification system for covered OPD services and allows groups within it, so that services in each group are comparable clinically and in the use of resources. Option a is incorrect because therapy services described in the statute are excluded from covered OPD services and paid under a fee schedule instead. Option b is incorrect because the statute excludes ambulance services from covered OPD services, since payment for them is made under a separate fee schedule. Option d is incorrect because the statute names screening mammography among the services left out of covered OPD services, so it is not grouped within this classification system.