2026 CPB Study Guide Certified Professional Biller
Exam Prep Practice Questions Answer Explanations •
Medical Billing • Claims • Reimbursement • Insurance
• Compliance Review
Domain I: Types of Insurance (Questions 1–25)
1. Which government program provides health insurance for individuals aged 65
and older and certain younger people with disabilities?
A) Medicaid
B) Medicare
C) TRICARE
D) Workers' Compensation
Rationale: Medicare is the federal health insurance program for people who are 65
or older, certain younger people with disabilities, and people with End-Stage Renal
Disease. Medicaid is a joint federal-state program for low-income individuals,
TRICARE covers military personnel and families, and Workers' Compensation
covers work-related injuries.
2. Medicare Part A primarily covers:
A) Physician services
B) Inpatient hospital stays
C) Prescription drugs
D) Outpatient procedures
Rationale: Medicare Part A covers inpatient hospital stays, skilled nursing facility
care, hospice care, and some home health care. Part B covers physician services
and outpatient care, Part C is Medicare Advantage, and Part D covers prescription
drugs.
3. Medicare Part B covers:
A) Inpatient hospital care
B) Physician services and outpatient care
C) Prescription drugs
D) Skilled nursing facility care
,Rationale: Medicare Part B covers medically necessary physician services,
outpatient care, preventive services, and durable medical equipment. Part A covers
inpatient hospital care, and Part D covers prescription drugs.
4. The "80/20 rule" in Medicare refers to:
A) Medicare pays 80% of the cost, and the patient pays 20% after the deductible
B) Medicare pays 20% of the cost, and the patient pays 80%
C) Medicare pays 80% of the premium, and the patient pays 20%
D) Medicare covers 80% of services, and 20% are excluded
Rationale: After the patient meets the annual deductible, Medicare Part B
typically pays 80% of the Medicare-approved amount for covered services, and the
patient is responsible for the remaining 20% coinsurance.
5. Which of the following is NOT a Medicare Part D requirement?
A) The plan must cover all prescription drugs
B) The plan must be offered by a private insurance company
C) The plan must have a formulary
D) The plan must have a coverage gap (donut hole)
Rationale: Medicare Part D plans are not required to cover all prescription drugs.
Each plan has a formulary (list of covered drugs) that must include at least two
drugs per therapeutic class. Plans are offered by private insurers, and there is a
coverage gap.
6. Medicaid is funded by:
A) The federal government only
B) State governments only
C) Both federal and state governments
D) Private insurance companies
Rationale: Medicaid is a joint federal-state program. The federal government
provides matching funds to states, which administer the program and establish
eligibility criteria within federal guidelines.
7. TRICARE is the health care program for:
A) Veterans
B) Active-duty military personnel, retirees, and their families
,C) Federal employees
D) Native Americans
Rationale: TRICARE is the health care program for uniformed service members,
retirees, and their families. The Veterans Administration (VA) provides care for
veterans, the Federal Employees Health Benefits Program covers federal
employees, and the Indian Health Service serves Native Americans.
8. Which managed care model requires patients to select a primary care physician
(PCP) who coordinates their care and provides referrals to specialists?
A) PPO
B) HMO
C) EPO
D) POS
Rationale: In an HMO (Health Maintenance Organization), patients select a PCP
who manages their care and provides referrals to specialists. PPOs (Preferred
Provider Organizations) allow patients to see any provider but offer financial
incentives for in-network care.
9. Which of the following is characteristic of a PPO (Preferred Provider
Organization)?
A) Patients can see any provider without a referral, but pay less for in-
network providers
B) Patients must select a PCP
C) Patients cannot see specialists without a referral
D) Patients must use only in-network providers
Rationale: PPOs allow patients to see any provider without a referral, but they pay
less when using in-network providers. HMOs require PCP selection and referrals,
EPOs require in-network providers only, and POS plans combine HMO and PPO
features.
10. Workers' compensation insurance covers:
A) All medical conditions
B) Work-related injuries and illnesses
C) Injuries occurring outside of work
D) Preventative care only
, Rationale: Workers' compensation insurance covers medical care and wage
replacement for employees who are injured or become ill as a result of their job. It
does not cover non-work-related conditions.
11. Which of the following is NOT a type of managed care plan?
A) HMO
B) PPO
C) Medicare Part A
D) EPO
Rationale: Medicare Part A is a government insurance program for inpatient
hospital care, not a managed care plan. HMO, PPO, and EPO are all managed care
models.
12. A patient with Medicare Advantage (Part C):
A) Receives Medicare benefits through a private insurance plan
B) Loses all Medicare benefits
C) Must pay both Medicare and private insurance premiums
D) Cannot have prescription drug coverage
Rationale: Medicare Advantage (Part C) allows beneficiaries to receive their
Medicare benefits through a private insurance plan. These plans must provide at
least the same coverage as Original Medicare and often include prescription drug
coverage.
13. The "donut hole" in Medicare Part D refers to:
A) The coverage gap where beneficiaries pay a higher share of drug costs
B) A discount on prescription drugs
C) The deductible phase
D) The catastrophic coverage phase
Rationale: The "donut hole" is the coverage gap in Medicare Part D where
beneficiaries pay a higher percentage of their prescription drug costs until they
reach the catastrophic coverage threshold. This gap has been gradually closing
under recent legislation.
14. Which of the following is a characteristic of an EPO (Exclusive Provider
Organization)?
Exam Prep Practice Questions Answer Explanations •
Medical Billing • Claims • Reimbursement • Insurance
• Compliance Review
Domain I: Types of Insurance (Questions 1–25)
1. Which government program provides health insurance for individuals aged 65
and older and certain younger people with disabilities?
A) Medicaid
B) Medicare
C) TRICARE
D) Workers' Compensation
Rationale: Medicare is the federal health insurance program for people who are 65
or older, certain younger people with disabilities, and people with End-Stage Renal
Disease. Medicaid is a joint federal-state program for low-income individuals,
TRICARE covers military personnel and families, and Workers' Compensation
covers work-related injuries.
2. Medicare Part A primarily covers:
A) Physician services
B) Inpatient hospital stays
C) Prescription drugs
D) Outpatient procedures
Rationale: Medicare Part A covers inpatient hospital stays, skilled nursing facility
care, hospice care, and some home health care. Part B covers physician services
and outpatient care, Part C is Medicare Advantage, and Part D covers prescription
drugs.
3. Medicare Part B covers:
A) Inpatient hospital care
B) Physician services and outpatient care
C) Prescription drugs
D) Skilled nursing facility care
,Rationale: Medicare Part B covers medically necessary physician services,
outpatient care, preventive services, and durable medical equipment. Part A covers
inpatient hospital care, and Part D covers prescription drugs.
4. The "80/20 rule" in Medicare refers to:
A) Medicare pays 80% of the cost, and the patient pays 20% after the deductible
B) Medicare pays 20% of the cost, and the patient pays 80%
C) Medicare pays 80% of the premium, and the patient pays 20%
D) Medicare covers 80% of services, and 20% are excluded
Rationale: After the patient meets the annual deductible, Medicare Part B
typically pays 80% of the Medicare-approved amount for covered services, and the
patient is responsible for the remaining 20% coinsurance.
5. Which of the following is NOT a Medicare Part D requirement?
A) The plan must cover all prescription drugs
B) The plan must be offered by a private insurance company
C) The plan must have a formulary
D) The plan must have a coverage gap (donut hole)
Rationale: Medicare Part D plans are not required to cover all prescription drugs.
Each plan has a formulary (list of covered drugs) that must include at least two
drugs per therapeutic class. Plans are offered by private insurers, and there is a
coverage gap.
6. Medicaid is funded by:
A) The federal government only
B) State governments only
C) Both federal and state governments
D) Private insurance companies
Rationale: Medicaid is a joint federal-state program. The federal government
provides matching funds to states, which administer the program and establish
eligibility criteria within federal guidelines.
7. TRICARE is the health care program for:
A) Veterans
B) Active-duty military personnel, retirees, and their families
,C) Federal employees
D) Native Americans
Rationale: TRICARE is the health care program for uniformed service members,
retirees, and their families. The Veterans Administration (VA) provides care for
veterans, the Federal Employees Health Benefits Program covers federal
employees, and the Indian Health Service serves Native Americans.
8. Which managed care model requires patients to select a primary care physician
(PCP) who coordinates their care and provides referrals to specialists?
A) PPO
B) HMO
C) EPO
D) POS
Rationale: In an HMO (Health Maintenance Organization), patients select a PCP
who manages their care and provides referrals to specialists. PPOs (Preferred
Provider Organizations) allow patients to see any provider but offer financial
incentives for in-network care.
9. Which of the following is characteristic of a PPO (Preferred Provider
Organization)?
A) Patients can see any provider without a referral, but pay less for in-
network providers
B) Patients must select a PCP
C) Patients cannot see specialists without a referral
D) Patients must use only in-network providers
Rationale: PPOs allow patients to see any provider without a referral, but they pay
less when using in-network providers. HMOs require PCP selection and referrals,
EPOs require in-network providers only, and POS plans combine HMO and PPO
features.
10. Workers' compensation insurance covers:
A) All medical conditions
B) Work-related injuries and illnesses
C) Injuries occurring outside of work
D) Preventative care only
, Rationale: Workers' compensation insurance covers medical care and wage
replacement for employees who are injured or become ill as a result of their job. It
does not cover non-work-related conditions.
11. Which of the following is NOT a type of managed care plan?
A) HMO
B) PPO
C) Medicare Part A
D) EPO
Rationale: Medicare Part A is a government insurance program for inpatient
hospital care, not a managed care plan. HMO, PPO, and EPO are all managed care
models.
12. A patient with Medicare Advantage (Part C):
A) Receives Medicare benefits through a private insurance plan
B) Loses all Medicare benefits
C) Must pay both Medicare and private insurance premiums
D) Cannot have prescription drug coverage
Rationale: Medicare Advantage (Part C) allows beneficiaries to receive their
Medicare benefits through a private insurance plan. These plans must provide at
least the same coverage as Original Medicare and often include prescription drug
coverage.
13. The "donut hole" in Medicare Part D refers to:
A) The coverage gap where beneficiaries pay a higher share of drug costs
B) A discount on prescription drugs
C) The deductible phase
D) The catastrophic coverage phase
Rationale: The "donut hole" is the coverage gap in Medicare Part D where
beneficiaries pay a higher percentage of their prescription drug costs until they
reach the catastrophic coverage threshold. This gap has been gradually closing
under recent legislation.
14. Which of the following is a characteristic of an EPO (Exclusive Provider
Organization)?
