Insurance BasicsMultiple ChoiceIdentify the choice that best completes the statement or answers the question.____1.The business of protecting, through legal means, a person or property against loss or harm is referred to asa.prevention.b.insurance.c.a contract.d.preclusion.____2.Health insurance narrows down undesirable events toa.illnesses and injuries.b.automobile accidents.c.preventive illnesses.d.preexisting conditions.____3.Securitas is the Latin term fora.services.b.specialist.c.security.d.success.____4.The birth of health insurance in this country occurred ina.1889.b.1900.c.1915.d.1929.____5.The federal healthcare program for the elderly and certain qualifying others isa.Medicare.b.Medicaid.c.Blue Cross.d.Health maintenance.____6.The combined federal and state healthcare program for indigent and low income individuals isa.Medicare.b.Medicaid.c.Blue Cross.d.health maintenance.____7.A relatively new concept of healthcare structure that emerged in the late twentieth century isa.managed care.b.Blue Shield.c.major medical.d.family care.____8.Congress passed the Health Maintenance Organization Act ina.1950.b.1965.c.1973.d.1987.____9.Factors listed in the text that drive healthcare issues include all of the following excepta.regulating managed care plans.b.expanding access for uninsured Americans.c.reducing healthcare costs.d.stabilizing emergency services.____10.Many employed individuals obtain healthcare coverage through a/ana.group plan.b.individual policy.c.government-sponsored program.d.guaranteed insurance pool.____11.The following groups that are typically without health insurance include all except those who area.self-employed.b.employed part time.c.employed in low wage jobs.d.employed in government jobs.____12.The acronym for the congressional act that circumvents problems such as preexisting conditions as well as other healthcare related issues isa.AMA.b.COBRA.c.HIPAA.d.EMTLA.____13.The situation whereby patients pay a certain portion of healthcare costs (e.g., deductible and copayment) is calleda.cost sharing.b.equalizing.c.standardizing.d.community rating.____14.Actuaries use statistics to predict anticipated healthcare costs, which establisha.riders.b.premiums.c.high risk pools.d.risk assessment clusters.____15.Fee-for-service healthcare plans are also referred to asa.managed care.b.preventive plans.c.indemnity insurance.d.health maintenance organizations.____16.Understanding what you read is calleda.application.b.comprehension.c.communication.d.interpretation.____17.Sending and receiving information through mutually understood methods isa.application.b.comprehension.c.communication.d.interpretation.____18.When you stick with a task until it is completed, you area.diligent.b.reticent.c.obstinate.d.obedient.____19.When you have honest, ethical, and moral principles, you are said to havea.objectivity.b.practicality.c.flexibility.d.integrity.____20.If you are not influenced by personal feelings, biases, or prejudice, you havea.objectivity.b.practicality.c.flexibility.d.integrity.____21.To write down important lecture facts in ones own words is calleda.outlining.b.plagiarizing.c.documenting.d.paraphrasing.____22.Organizing daily responsibilities according to their importance is calleda.colonizing.b.multitasking.c.prioritizing.d.categorizing.____23.College entry-level skills necessary for success as a health insurance professional include all of the following excepta.coding.b.basic business math.c.English and grammar skills.d.keyboarding and computer skills.____24.Success in getting the most out of ones education and optimizing career potential facilitatesa.lifelong learning.b.autonomy.c.career identity.d.individuality.____25.In order to develop effective study skills, it is suggested that students generate a _____ schedule.a.career objective.b.time management.c.professional education.d.goal oriented.____26.The nationally recognized job title for individuals who specialize in medical insurance claims submission isa.insurance billing specialist.b.health insurance professional.c.health information technician.d.There is no nationally recognized title.____27.One method of enhancing ones career as a health insurance professional is to acquirea.certification.b.nationalization.c.legalization.d.specialization.____28.Those who work in healthcare say the most important reward isa.earning a good salary.b.getting promoted.c.becoming certified.d.helping people.____29.Career opportunities for a health insurance professional includea.physicians offices.b.healthcare organizations.c.nursing homes.d.All of the above are correct.____30.When a society tends to be hasty in bringing lawsuits, it is said to bea.illegal.b.litigious.c.diligent.d.formidable.____31.The Latin term for let the master answer isa.litigious.b.ancillary.c.negligent.d.respondeat superior.____32.Members of a medical team who are not physicians are called _____ members.a.Cohort.b.third party.c.ancillary.d.emancipated.____33.Elements of a legal contract include all of the following excepta.an attorney.b.Consideration.c.competent parties.d.offer and acceptance.____34.A proposition to create a contract is thea.offer.b.acceptance.c.consideration.d.binding element.____35.The thing of value that each party gives to the other is thea.offer.b.acceptance.c.consideration.d.binding element.____36.A contract can be terminated whena.a full year has passed.b.both parties agree to terminate it.c.either party defaults on the provisions.d.Both b and c are correct.____37.The type of contract that exists between a healthcare provider and a patient is a/ana.implied contract.b.verbal contract.c.written contract.d.All of the above are correct.____38.When certain precise steps are not followed when a physician terminates the patient/doctor contract it is calleda.cessation.b.termination.c.abandonment.d.altercation.____39.A health insurance company is referred to as thea.first party.b.second party.c.third party.d.fourth party.____40.The federal act that states that Medicare is the secondary payer in the case of automobile or liability coverage is thea.Federal Privacy Act of 1974.b.Federal Omnibus Budget Reconciliation Act of 1980.c.Tax Equity and Fiscal Responsibility Act of 1982.d.Consolidated Omnibus Budget Reconciliation Act of 1986.____41.The act that made Medicare benefits secondary to employer group health plans for employees (or spouses) over 65 is thea.Federal Privacy Act of 1974.b.Federal Omnibus Budget Reconciliation Act of 1980.c.Tax Equity and Fiscal Responsibility Act of 1982.d.Consolidated Omnibus Budget Reconciliation Act of 1986.____42.The act that addresses the prevention of healthcare fraud and abuse of patients eligible for Medicare and Medicaid benefits is thea.Fraud and Abuse Act.b.Federal Privacy Act of 1974.c.Federal Omnibus Budget Reconciliation Act of 1980.d.Tax Equity and Fiscal Responsibility Act of 1982.____43.Standards of human conduct (sometimes called morals) area.ethics.b.etiquette.c.socialization.d.protocol.____44.Following the rules and conventions governing correct or polite behavior in society is calleda.ethics.b.etiquette.c.socialization.d.protocol.____45.HIPAA was signed into law ina.1988.b.1996.c.2000.d.2005.____46.In compliance with HIPAA, when patients visit their healthcare providers for treatment, they are given aa.privacy statement.b.waiver of accountability.c.availability statement.d.Both a and b are correct.____47.When two patients recognize each other in a medical practices reception area, HIPAA refers to this as a/ana.breach of confidentiality.b.infringement of etiquette.c.incidental disclosure.d.violation of compliance.____48.The Office of Inspector General (OIG) recommends all medical facilities have aa.protection policy.b.soundproof exam room.c.third-party review panel.d.HIPAA compliance plan.____49.Medicare and Medicaid records must be kept a minimum of _____ years.a.twob.threec.fived.Ten____50.Before medical information can be divulged to a third party, the patient should sign aa.written consent form.b.assignment of benefits form.c.release of medical information form.d.Either a or c is correct.____51.Exceptions to confidentiality include all of the following excepta.child abuse.b.emergency treatment.c.communicable diseases.d.injuries caused by firearms.____52.An authorization to release information should contain all of the following except thea.patients name.b.primary diagnosis.c.patients signature.d.description of the information to be released.____53.When a health insurance professional intentionally and knowingly misrepresents facts to increase the payment of a claim, it is commonly known asa.fraud.b.abuse.c.criminal intent.d.a breach of etiquette.____54.Improper methods of doing business that are contradictory to accepted business practices is a definition ofa.fraud.b.abuse.c.criminal intent.d.a breach of etiquette.____55.The primary objectives of HIPAA include all of the following except toa.ensure health insurance portability.b.reduce healthcare fraud/abuse.c.enforce standards for health information.d.lower healthcare costs.____56.Upcoding and unbundling of charges are examples ofa.healthcare fraud.b.confidentiality breaches.c.HIPAA deregulations.d.exceptions to privacy.____57.A clinical, scientific, administrative, and legal document of facts containing statements relating to a patient is a definition of a/ana.compliance plan.b.HIPAA standard.c.medical record.d.retention statute.____58.Failure to exercise a reasonable degree of care is a definition ofa.fraud.b.abuse.c.a crime.d.negligence.____59.A legal document that requires an individual to appear in court with a piece of evidence that can be examined by the court is called a/ana.Respondeat superior.b.subpoena duces tecum.c.certificate of evidence.d.notarized sanction.____60.The traditional kind of health insurance wherein patients can choose any provider or hospital they wish and change physicians at will isa.indemnity.b.fee-for-service.c.managed care.d.Both a and b are correct.____61.The periodic fee paid for health insurance is commonly called aa.stipend.b.premium.c.penalty.d.disbursement.____62.The dollar amount that a patient must pay each year before his/her insurance benefits begin is called aa.premium.b.copayment.c.deductible.d.imbursement.____63.Most health insurers ask that patients pay a portion of the charge called thea.UCR.b.coinsurance.c.deductible.d.imbursement.____64.Insurance payments are typically based ona.UCR rates.b.individual state rates.c.average national rates.d.international rates.____65.Insurance companies often cap what a patient must pay, which is referred to as thea.cap rate.b.maximum pay.c.limited amount.d.out-of-pocket maximum.____66.The form that is most commonly used today for insurance claims is thea.UB-04.b.CMS-1500.c.HCFA-1490.d.HCPCS 1090.____67.When both basic and major medical coverage is combined into one insurance plan, it is calleda.a comprehensive plan.b.combination coverage.c.a unilateral contract.d.a managed care plan.____68.Medical illnesses or injuries that a patient has prior to the purchase of a health insurance policy are calleda.riders.b.exemptions.c.policy precursors.d.preexisting conditions.____69.People who are covered under managed care plans are commonly referred to asa.enrollees.b.policyholders.c.charter members.d.covered entities.____70.An insurance contract made with a business entity that covers its employees equally is called aa.group contract.b.business contract.c.equilateral contract.d.managed care plan.____71.When an individual purchases a healthcare policy from a commercial insurer, he/she is said to have a/ana.unenforceable contract.b.individual contract.c.managed care plan.d.Both b and c are correct.____72.A special tax shelter set up for the purpose of paying medical bills is aa.indemnity plan.b.managed care plan.c.tax shelter contract.d.medical savings account.____73.Most third-party payers do not pay for medical services that area.diagnostic in nature.b.considered outdated.c.not medically necessary.d.provided in another state.____74.A _____ provider is one who contracts with the insurer, agreeing to abide by certain rules and regulations of that carrier.a.participatingb.non-participatingc.managed healthcared.fee-for-serviceTrue/FalseIndicate whether the statement is true or false.____75.Healthcare providers and companies that sell insurance have determined it is less costly to prevent serious illnesses than to treat them after they emerge.____76.Justin Ford Kimball introduced a health plan in Dallas in 1929 that evolved into what today is known as Medicare.____77.Usually, there are no deductibles to be met or claim forms to be completed with HMOs.____78.An option for people who are unable to acquire healthcare coverage through their employers is purchasing a healthcare policy through private insurance carriers.____79.Under HIPAA, employees who quit their jobs or are laid off can extend their group healthcare coverage for up to 36 months.____80.One of the factors that drives up healthcare costs is the fact that Americans are living longer than ever before.____81.Media coverage is instrumental in keeping healthcare costs down.____82.People need health insurance in order to protect themselves from possible financial ruin.____83.Medicare provides healthcare coverage for qualifying low-income individuals.____84.The two basic types of health insurance plans are indemnity and managed care.____85.The ability to effectively perform ones job without direct supervision is called autonomy.____86.Professional ethics are moral principles that are associated with a specific vocation.____87.Advancement opportunities as a health insurance professional are relatively limited.____88.Health insurance professionals who are also certified coders can expect higher wages.____89.The basic goal of a health insurance professional is to ensure that providers and patients get paid correctly in a timely manner.____90.There are as many different insurance claim forms as there are insurance companies.____91.Certification is the culmination of a process of formal recognition of the competence possessed by an individual in a specific area.____92.One can typically expect to perform various duties when one becomes a health insurance professional.____93.The nationally recognized title for a health insurance professional is insurance biller/coder.____94.Computers have dramatically changed the face of health insurance.____95.Health insurance professionals are currently in high demand in the United States.____96.One of HIPAAs goals is to reduce the number of forms and methods of completing insurance claims.____97.The primary goal of the health insurance professional is to complete and submit insurance claims.____98.Since insurance is not a universal concern, health insurance professionals do not need to worry about legal issues.____99.Medical law and liability is the same in all 50 states.____100.A contract must be legal before it can be enforced.____101.Under no circumstances can a minor enter into a legally binding contract.____102.A patient can terminate the doctor/patient contract simply by paying the bill and not returning to the practice.____103.In todays healthcare environment, patients are frequently referred to as customers.____104.HIPAAs regulations affect only healthcare issues.____105.Businesses have the same obligation to protect medical records as medical practices.____106.A medical record serves only one purposeto chronologically document a patients healthcare treatment.____107.All 50 states have a mandatory, 5-year retention of records law.____108.It is generally an accepted fact that medical records are the property of the healthcare facility.____109.There is a subtle distinction between privacy and confidentiality.____110.A patient who is being treated for an injury as a result of an accident on the job is not required to sign a release of information.____111.HIPAA affects various categories of people/businesses involved with healthcare.____112.Day-to-day contact with patients presents continuous ethical and legal responsibilities for the health insurance professional.____113.A three-way contract exists between the physician, the patient, and the insurance carrier.____114.A medical record is not a legal document.____115.Timely, complete, and accurate documentation is an important factor in quality patient care.____116.It is illegal for the health insurance professional to make any documentation entries in a patients health record.____117.Under no circumstance may information in a patients record be released with the express written authorization by the patient or his/her parent/guardian.____118.The terms fraud and abuse are interchangeable.____119.Child abuse, but not the abuse of an adult, is an exception to confidentiality.____120.The Federal False Claim Amendments Act (of 1986) expands the governments ability to control fraud and abuse in healthcare.____121.COBRA affects employers with more than 20 employees.____122.Medicare supplement policies are frequently called Medigap policies.____123.Medicaid is administered solely by the federal government.____124.TRICARE is the U.S. militarys comprehensive healthcare program for active duty and retired personnel.____125.Disability insurance is the same as workers compensation.____126.SSDI is an insurance program that only individuals over 65 can qualify for.____127.Flexible spending accounts (FSAs) are cafeteria plans, meaning premiums are deducted from the employees wages before withholding taxes are deducted.____128.Long-term care insurance covers nursing home care.____129.The birthday rule is an informal procedure used to determine which plan is primary when individuals are listed as dependents on more than one policy.____130.Insurance reimbursement is typically based on medical necessity.____131.UCR fees for commercial insurers are established by the federal government.____132.One advantage of group health insurance is that there is usually no preexisting condition exemption.____133.COBRA is the federal act that mandates Medicare beneficiaries purchase a Medigap policy.CompletionComplete each statement.134.The amount of money an individual pays in return for health insurance coverage is called a/an ____________________.135.Rhodes extensive code of sea laws included the principle of ____________________ or general average.136.In 1850, the Franklin Health Assurance Company began offering medical expense coverage, similar to todays health insurance, in the state of ____________________.137.The out-of-pocket expense that patients must pay before insurers begin paying benefits is called a/an ____________________.138.A condition or illness that is in existence when an individuals healthcare coverage begins is called a/an ____________________.139.The type of healthcare policy that a business entity frequently offers its employees is called a/an ___________________ policy.140.Healthcare plans that provide cost-effective care while attempting to contain expenditures is referred to as ____________________..141.The two major sources of health insurance are ___________________ programs and ___________________ organizations.142.The two basic types of healthcare are ___________________ and ____________________..143.The federal act that allows employees who quit their jobs or get laid off to extend their group coverage is known by the acronym ___________________.144.Direct and indirect patient contact involves ____________________ and ____________________ responsibilities.145.Legal form is only applicable in ____________________ contracts.146.To be HIPAA-compliant, a medical facility should develop and maintain a 7-step ____________________.147.When an individual has the legal ability to handle another persons affairs, he/she is said to have ____________________.MatchingMatch each item with the correct staement below.a.COBRAb.copaymentc.deductibled.fee-for-servicee.FSAf.group plang.Medicaidh.medically necessaryi.Medicarej.nonPAR providerk.PAR providerl.UCRm.workers compensation____148.The amount of money paid upfront each year before benefits begin.____149.The traditional type of insurance plan.____150.A type of healthcare policy available to corporate employees.____151.The joint federal/state program for low-income individuals____152.The type of insurance that pays employees who become ill or are injured on the job.____153.A fee structure based on a consensus of what most physicians charge for a similar procedure in the same geographic area.____154.Services, procedures, or supplies that meet specific criteria necessary for patient treatment.____155.A physician who contracts with the third-party payer and agrees to abide by certain rules set down by the payer.____156.The federal act that allows workers who lose their insurance benefits the right to continue group coverage temporarily.____157.An IRS Section 125 cafeteria plan.Short Answer158.List four types of business entities who typically hire health insurance professionals.159.List six typical job responsibilities of a health insurance specialist.160.Name four areas of certification available to the health insurance professional.161.List six on-the-job skills that a health insurance professional should possess.162.List the five elements of a legal contract.163.List six ethical areas in healthcare.164.List HIPAAs four primary objectives.165.List four purposes of a medical record.Insurance Basics - Answer SectionMULTIPLE CHOICEBPTS:12.APTS:13.CPTS:14.DPTS:15.APTS:16.BPTS:17.APTS:18.CPTS:19.CPTS:110.APTS:111.DPTS:112.CPTS:113.APTS:114.BPTS:115.CPTS:116.BPTS:117.CPTS:118.APTS:119.DPTS:120.APTS:121.DPTS:122.CPTS:123.APTS:124.APTS:125.BPTS:126.DPTS:127.APTS:128.DPTS:129.DPTS:130.BPTS:131.DPTS:132.CPTS:133.APTS:134.APTS:135.CPTS:136.DPTS:137.APTS:138.CPTS:139.CPTS:140.BPTS:141.CPTS:142.APTS:143.APTS:144.BPTS:145.BPTS:146.APTS:147.CPTS:148.DPTS:149.CPTS:150.DPTS:151.BPTS:152.BPTS:153.APTS:154.BPTS:155.DPTS:156.APTS:157.CPTS:158.DPTS:159.BPTS:160.DPTS:161.BPTS:162.CPTS:163.BPTS:164.APTS:165.DPTS:166.BPTS:167.APTS:168.DPTS:169.APTS:170.APTS:171.BPTS:172.DPTS:173.CPTS:174.APTS:1TRUE/FALSE75.TPTS:176.FPTS:177.TPTS:178.TPTS:179.FPTS:180.TPTS:181.FPTS:182.TPTS:183.FPTS:184.TPTS:185.TPTS:186.TPTS:187.FPTS:188.TPTS:189.TPTS:190.FPTS:191.TPTS:192.TPTS:193.FPTS:194.TPTS:195.TPTS:196.TPTS:197.TPTS:198.FPTS:199.FPTS:1100.TPTS:1101.FPTS:1102.TPTS:1103.TPTS:1104.FPTS:1105.TPTS:1106.FPTS:1107.FPTS:1108.TPTS:1109.TPTS:1110.TPTS:1111.TPTS:1112.TPTS:1113.FPTS:1114.FPTS:1115.TPTS:1116.FPTS:1117.FPTS:1118.FPTS:1119.FPTS:1120.TPTS:1121.TPTS:1122.TPTS:1123.FPTS:1124.TPTS:1125.FPTS:1126.FPTS:1127.TPTS:1128.TPTS:1129.TPTS:1130.TPTS:1131.FPTS:1132.TPTS:1133.FPTS:1COMPLETION134.premium PTS: 1135.jettison PTS: 1136.Massachusetts PTS: 1137.deductible PTS: 1138.preexisting condition PTS: 1139.group PTS:1140.managed healthcare PTS: 1141.government, private PTS: 1142.indemnity, managed care fee-for-service, PTS: 1143.COBRA PTS: 1144.ethical, legal PTS:1145.written PTS:1146.compliance plan PTS:1147.power of attorney PTS:1MATCHING148.CPTS:1149.DPTS:1150.FPTS:1151.GPTS:1152.MPTS:1153.LPTS:1154.HPTS:1155.KPTS:1156.APTS:1157.EPTS:1SHORT ANSWER158.ANS:Physicians or dentists officesHospitals and urgent care facilitiesPharmaciesNursing homesHome healthMental health facilitiesPhysical therapy and rehabilitation centersInsurance companiesHealth maintenance organizations (HMOs)Consulting firmsHealth data organizationsPTS:1159.ANS:Scheduling appointmentsBookkeeping and other administrative dutiesExplaining insurance benefits to patientsHandling day-to-day medical billing proceduresAdhering to each insurance carriers guidelinesDocumenting all activities using correct techniques and medical terminologyCompleting insurance forms promptly and accuratelyKnowing and complying with laws and regulationsComputer data entryInterpreting explanation of benefits (EOBs)Posting payments to patient accountsCorresponding with patients and insurance companiesPTS:1160.ANS:American Academy of Professional Coders (AAPC)Certified Professional Coder (CPC)Certified Professional Coder for Hospitals (CPC-H)American Health Information Management Association (AHIMA)Certified Coding Specialist (CCS)Certified Coding Associate (CCA)Certified Coding Specialist for Physicians (CCS-P)PTS:1161.ANS:Pay attention to detailFollow directionsWork independently without supervisionUnderstand the need for and possess a strong sense of professional ethicsUnderstand the need for and possess strong people skillsDemonstrate patience and an even temperamentBe empathetic without being sympatheticBe organized but flexibleBe conscientiousDemonstrate a sense of responsibilityPossess manual dexterityUnderstand and respect the importance of confidentialityDemonstrate a willingness to learnPTS:1162.ANS:offer and acceptance, consideration, legal object, competent parties, legal formPTS:1163.ANS:birth control, abortion, experimentation, prolongation of life, quality of life, euthanasia (The complete list can be found at the top of p. 32).PTS:1164.ANS:to ensure health insurance portability, reduce healthcare fraud and abuse, enforce standards for health information, and guarantee the security/privacy of patients health informationPTS:1165.ANS:to enable physicians to render good medical care, provide statistical information for research; offer legal protection for the healthcare team, and provide support for third-party reimbursement.PTS:1