CSAF- MEDICARE AND
MEDICAID REIMBURSEMENT
SYSTEMS EXAM ACTUAL UPDATE QUESTIONS AND VERIFIED
ANSWERS
Entities Regulating Healthcare - ANSWER The healthcare industry is highly regulated. In addition
to federal and state legislation, there also are rules and regulations related to life and safety
issues, business compliance, and licensure requirements. Regulatory Environment and
Corporate Compliance (Parts 1 and 2) highlights the major agencies with regulatory authority
over the healthcare industry.
Centers for Medicare and Medicaid Services (CMS) - ANSWER The United States Secretary of the
Department of Health and Human Services (HHS) is charged with the overall responsibility for
administration of federally sponsored healthcare programs. This responsibility has been
primarily delegated to the Centers for Medicare and Medicaid Services (CMS).
The three basic functions of CMS are defined as follows:
-Establishment and promulgation of clear policy on eligibility for CMS programs, coverage and
reimbursement of healthcare services, standards for providers and program administration
-Administration of comprehensive agreements with contractors and states that stipulate the
conditions under which CMS programs are carried out, the performance standards that must be
met in their administration, and the programmatic results that are to be achieved
-Monitoring the performance of contractors and states in administering CMS programs
consistent with program and performance standards, as well as the direct monitoring of
healthcare providers to make sure that programmatic goals are achieved
,This agency has day-to-day responsibility for the administration of all federally supported
healthcare financing programs, including Medicare, Medicaid, and a variety of related programs.
Centers for Medicare and Medicaid Services (CMS) - ANSWER To administer the Medicare
program, CMS issues regulations, formal rulings, interpretations, and intermediary letters to
clarify the law and/or to provide other guidance. Here is how CMS defines these items:
Regulations have the authority of law, provided they are consistent with the law and its intent.
The procedures to pass regulations are mandated by federal law.
Formal Rulings represent the official position of CMS. They are binding on all components of the
agency, including the Provider Reimbursement Review Board (PRRB). Formal rulings are issued
periodically for subjects of individual significance or of a recurring nature.
Intermediary Letters - Medicare Administrative Carrier letters (MAC) are communications from
CMS to its intermediaries—contracted by the federal government to administer Medicare
programs. These letters provide guidance on emerging or difficult issues and program
administration information. Applicable intermediary letters would be considered interpretations
of CMS.
Provider Reimbursement Review Board (PRRB) - ANSWER The Provider Reimbursement Review
Board (PRRB) was created to conduct hearings and render decisions on certain appeals from
Medicare providers. If a provider disagrees with its MAC's interpretation and application of a
Medicare regulation, it can appeal the matter before PRRB when the disputed amount exceeds
a minimum dollar limit.
The absence of a provision in the original law for an independent hearing of arguments in
reimbursement disputes was considered by many to be the single greatest inequity of the
Medicare administrative process. Creation of PRRB was an attempt to correct this inequity. This
legislation also made specific provision for a judicial review at the provider's expense.
Federal Trade Commission (FTC) - ANSWER The healthcare industry is required to comply with
all antitrust laws and, as such, is under the enforcement of the Federal Trade Commission (FTC).
, The FTC has maintained an aggressive enforcement program in the healthcare field, including
looking for situations where its presence can enhance competition.
The FTC examines mergers of hospitals and other healthcare institutions, as well as other
activities that may exclude entry or competition from new or different professionals or
organizations that seek to compete with established providers. Recent decisions by the FTC have
determined that consolidation of facilities in communities must prove more than improvement
in the quality of care as a justification for the transaction.
Internal Revenue Service - ANSWER All Hospitals and health care organizations are subject to
IRS regulations. For-Profit organizations must follow rules similar to organizations located in any
other industry. Non-profit Hospitals and health care organizations must follow rules set forth
under code section 501(c) (3) and 501 (r).
Hospitals and healthcare organizations may be granted tax-exempt status under section
501(c)(3) as a charitable organization. Once an organization meets the requirements for
exemption, it should apply to the IRS for a determination letter stating that it is tax-exempt. The
IRS is responsible for granting tax-exempt status, and for monitoring compliance with legislation
that governs the business activities of tax-exempt organizations.
Federal laws implemented through the Patient Protection and Accountable Care Act (PPACA)
contained provisions requiring certain non-profits to conduct Community Health Needs
Assessments. Section 9007(a) of PPACA states that all hospitals seeking exemption from federal
income tax and other tax benefits as 501(c)(3) must follow requirements contained in the new
Internal Revenue Code Section 501 (Code ("Code") Section 501 (r).
Internal Revenue Service (continued) - ANSWER Hospitals are required to conduct a Community
Health Needs Assessment every three (3) years and adopt an implementation plan to meet the
needs identified. The assessment must include:
Input from key people who represent broad interest of the community being served by the
Hospital. Individuals who have specialized knowledge or expertise in the area of public health is
preferred. It should be noted that public health information may be collected and may include
information for one or more related organizations.
An implementation strategy to meet the needs identified.
Report on how the hospital is addressing needs that are being met as a result of the
assessment.
MEDICAID REIMBURSEMENT
SYSTEMS EXAM ACTUAL UPDATE QUESTIONS AND VERIFIED
ANSWERS
Entities Regulating Healthcare - ANSWER The healthcare industry is highly regulated. In addition
to federal and state legislation, there also are rules and regulations related to life and safety
issues, business compliance, and licensure requirements. Regulatory Environment and
Corporate Compliance (Parts 1 and 2) highlights the major agencies with regulatory authority
over the healthcare industry.
Centers for Medicare and Medicaid Services (CMS) - ANSWER The United States Secretary of the
Department of Health and Human Services (HHS) is charged with the overall responsibility for
administration of federally sponsored healthcare programs. This responsibility has been
primarily delegated to the Centers for Medicare and Medicaid Services (CMS).
The three basic functions of CMS are defined as follows:
-Establishment and promulgation of clear policy on eligibility for CMS programs, coverage and
reimbursement of healthcare services, standards for providers and program administration
-Administration of comprehensive agreements with contractors and states that stipulate the
conditions under which CMS programs are carried out, the performance standards that must be
met in their administration, and the programmatic results that are to be achieved
-Monitoring the performance of contractors and states in administering CMS programs
consistent with program and performance standards, as well as the direct monitoring of
healthcare providers to make sure that programmatic goals are achieved
,This agency has day-to-day responsibility for the administration of all federally supported
healthcare financing programs, including Medicare, Medicaid, and a variety of related programs.
Centers for Medicare and Medicaid Services (CMS) - ANSWER To administer the Medicare
program, CMS issues regulations, formal rulings, interpretations, and intermediary letters to
clarify the law and/or to provide other guidance. Here is how CMS defines these items:
Regulations have the authority of law, provided they are consistent with the law and its intent.
The procedures to pass regulations are mandated by federal law.
Formal Rulings represent the official position of CMS. They are binding on all components of the
agency, including the Provider Reimbursement Review Board (PRRB). Formal rulings are issued
periodically for subjects of individual significance or of a recurring nature.
Intermediary Letters - Medicare Administrative Carrier letters (MAC) are communications from
CMS to its intermediaries—contracted by the federal government to administer Medicare
programs. These letters provide guidance on emerging or difficult issues and program
administration information. Applicable intermediary letters would be considered interpretations
of CMS.
Provider Reimbursement Review Board (PRRB) - ANSWER The Provider Reimbursement Review
Board (PRRB) was created to conduct hearings and render decisions on certain appeals from
Medicare providers. If a provider disagrees with its MAC's interpretation and application of a
Medicare regulation, it can appeal the matter before PRRB when the disputed amount exceeds
a minimum dollar limit.
The absence of a provision in the original law for an independent hearing of arguments in
reimbursement disputes was considered by many to be the single greatest inequity of the
Medicare administrative process. Creation of PRRB was an attempt to correct this inequity. This
legislation also made specific provision for a judicial review at the provider's expense.
Federal Trade Commission (FTC) - ANSWER The healthcare industry is required to comply with
all antitrust laws and, as such, is under the enforcement of the Federal Trade Commission (FTC).
, The FTC has maintained an aggressive enforcement program in the healthcare field, including
looking for situations where its presence can enhance competition.
The FTC examines mergers of hospitals and other healthcare institutions, as well as other
activities that may exclude entry or competition from new or different professionals or
organizations that seek to compete with established providers. Recent decisions by the FTC have
determined that consolidation of facilities in communities must prove more than improvement
in the quality of care as a justification for the transaction.
Internal Revenue Service - ANSWER All Hospitals and health care organizations are subject to
IRS regulations. For-Profit organizations must follow rules similar to organizations located in any
other industry. Non-profit Hospitals and health care organizations must follow rules set forth
under code section 501(c) (3) and 501 (r).
Hospitals and healthcare organizations may be granted tax-exempt status under section
501(c)(3) as a charitable organization. Once an organization meets the requirements for
exemption, it should apply to the IRS for a determination letter stating that it is tax-exempt. The
IRS is responsible for granting tax-exempt status, and for monitoring compliance with legislation
that governs the business activities of tax-exempt organizations.
Federal laws implemented through the Patient Protection and Accountable Care Act (PPACA)
contained provisions requiring certain non-profits to conduct Community Health Needs
Assessments. Section 9007(a) of PPACA states that all hospitals seeking exemption from federal
income tax and other tax benefits as 501(c)(3) must follow requirements contained in the new
Internal Revenue Code Section 501 (Code ("Code") Section 501 (r).
Internal Revenue Service (continued) - ANSWER Hospitals are required to conduct a Community
Health Needs Assessment every three (3) years and adopt an implementation plan to meet the
needs identified. The assessment must include:
Input from key people who represent broad interest of the community being served by the
Hospital. Individuals who have specialized knowledge or expertise in the area of public health is
preferred. It should be noted that public health information may be collected and may include
information for one or more related organizations.
An implementation strategy to meet the needs identified.
Report on how the hospital is addressing needs that are being met as a result of the
assessment.
