CHFP MODULE 1 CERTIFICATION TEST WITH ALL
CORRECT & 100% VERIFIED ANSWERS (UPDATED TO
PASS)
is a pre-determined amount that the patient pays before the insurer begins to pay for services
Correct answer-deductible
a percentage of the insurance payment amount that is paid by the patient, along with the amount
paid by the insurer. Correct answer-coinsurance
a flat amount that the patient pays at each time of service Correct answer-copayment
payment also includes amounts for services that are not included in the patient's benefit design and
amounts for services balance billed by out-of-network providers. Payments typically does not include
premium sharing by the patient. Correct answer-Out-of-pocket payment
The amount payable out of pocket for healthcare services, which may includes deductibles,
copayments, coinsurance, amounts payable by the patient for services that are not included in the
patient's benefit design, and amounts "balance billed" by out-of-network providers. Health insurance
premiums constitute a separate category of healthcare costs for patients, independent of healthcare
utilization. Correct answer-Cost (to the patient)
The expense (direct and indirect) incurred to deliver healthcare services to patients. Correct
answer-Costs (to the provider)
The amount payable to the provider (or reimbursable to the patient) for services rendered. Correct
answer-Cost (to the health plan/insurer)
The expense related to provided health benefits (premiums or claims paid) Correct answer-Cost (to
the employer)
The dollar amount a provider sets for services rendered before negotiating any discounts. The charge
can be different from the amount paid. Correct answer-Charge
The total amount a provider expects to be paid by health plans/payers and patients for healthcare
services. Correct answer-Price
An organization that negotiates or sets rates for provider services, collects revenue through premium
payments or tax dollars, processes provider claims for service, and pays provider claims using
collected premium or tax revenues. Correct answer-Health Plan/Payer
An entity, organization, or individual that furnishes a healthcare service. Correct answer-Provider
Occurs when a healthcare provider bills a patient for charges (other than copayments, coinsurance or
any amounts that may remain on the patient's annual deductible) that exceed the health plan's
payment for a covered service. In-network providers are contractually prohibited from balance billing
health plan members, but balance billing by out-of-network providers is common. Correct answer-
Balance Billing
,In healthcare, readily available information on the price of healthcare services that, together with
other information, helps define the value of those services and enables patients and other care
purchasers to identify, compare and choose providers that offer the desired level of value Correct
answer-Price Transparency
The quality of a healthcare service in relation to the total price paid for the service by care
purchasers. Correct answer-Value
the flow of money between the patient, the insurer, and the provider of healthcare services
Correct answer-Revenue Cycle
function between a healthcare facility or physician and an insurer is one of the most important
resource management challenges in today's healthcare industry. Correct answer-Billing and
Collection
An older term used to describe payment by an insurer to a healthcare facility or physician. This term
is used because a physician or healthcare facility provider render services to a patient and then
submits claims a claim to an insurer. The healthcare facility or physician waits for processing of that
claim by the insurer, and ultimately recieves payment, a determination of payment or a denial by the
insurer. Today it is more common to use the term payment. Correct answer-Reimbursement
The price set by a healthcare facility or physician for their services is referred to as Correct answer-
Charges or Billed Charges
The charges by a healthcare facility or physician represent the retail price and are usually compiled in
a price listing known as Correct answer-Chargemaster
a charge-based payment mechanism in which a provider is paid either list price (full charges) or a
percentage of charges (full charges less a discount) for the specific services rendered. Correct
answer-Fee-for-service
What does fee for service payment provides? Correct answer-more units of service in order to
receive more payments.
Why do Healthcare Facilities set Retail prices significantly above rates actually paid by commercial
insurers or the government? Correct answer-1. Access to Contracted Payment Rates.
-Rare not all insurers participate in provider networks that give them access to contracted payment
rates. Some auto insurers, liability insurers or companies providing travel insurance to visitors from
abroad still pay a provider's full charges.
2. Percent-of-Charge Contracts
-In markets with little competition, percent-of-charge contracts are still common. The higher the
price, the higher the percent-of-charge payment, unless the contract limits a provider's annual price
increases.
3. Outlier Provisions
-Some insurance contacts contain an outlier provision that entitles providers to an additional
payment (a lump-sum payment or a percentage of actual charges above a threshold) for particularly
sick and high-cost patients.
What is the use and benefits of Cost Based Payments? Correct answer-The only use of this method
today is in a limited set of small, rural healthcare facilities known as critical access hospitals. This
,mechanism has rarely been used for physicians. Cost-based payment calls for the insurer to pay the
healthcare provider based on the costs of providing services, with a nominal allowance for margin.
What is the Medicare program began with a payment mechanism to healthcare facilities that has
since been nearly eliminated from the healthcare industry — Correct answer-Cost based Payment
Which of the following would benefit the most from a cost-based payment method? Correct
answer-The healthcare provider
That's right! Let's understand how.
The payment mechanism is advantageous for healthcare providers, as there is a higher likelihood
that all costs will be paid, and there is no incentive to be efficient in providing care, since costs will be
reimbursed by the insurer. The rapid escalation of healthcare costs in the U.S. after the start of cost-
based payment in Medicare and Medicaid programs led to the implementation of the Prospective
Payment System (PPS) of paying acute care healthcare providers for inpatient services in 1983 and
outpatient services in 2000. Since then, CMS has introduced prospective payment systems for most
other types of institutional healthcare providers
Cost-Based payment decreased need for providers to be efficient.
Mountainside Health Plan is evaluating its payment of hospitals in its current service area. It is
looking to reduce its costs per patient and stabilize its overall payments to hospitals. Which of the
following payment methods would be least effective for the health plan to meet these objectives?
Correct answer-Cost-based payment
You selected the correct answer. Cost-based payment is the least predictable model for a health plan
and has the greatest risk of increased cost because it is dependent on the hospital's ability to
manage operating costs.
The table below shows the methods ranked from most predictable to least predictable.
What are the 5 main types of prospective payments used in today's healthcare market? Correct
answer-1. DRG healthcare provider
2. Per Procedure
3. Case rate - healthcare provider or physician
4. Per diem - healthcare provider
5. Bundled payment - healthcare provider, physicians and post-acute providers
A payment based on the patient's diagnosis is known as a Correct answer-(DRG) Diagnosis Related
Group
What is the most widely used in payments to healthcare providers. Correct answer-(DRG)'s
is a classification of a disease or injury into one of approximately 750 different categories.
The amount paid is a flat rate per discharge and is adjusted based on:
Relative severity of the patient's condition
Resources used to treat the condition as determined by the DRG for that condition Correct answer-
(DRG)
defines the increase or decrease adjustment to the payment. Correct answer-Relative weight
, (each DRG is assigned relative weight)
The average level of severity of conditions of patients in a healthcare provider during a specified
period is known as Correct answer-case mix index
A _________ pays a specified fee for each procedure performed on a patient in a healthcare provider
or ambulatory care facility, or by a physician. Correct answer-Health plan
What 2 payment approaches are used in the per-procedure payment plan? Correct answer-(APC)
Ambulatory Payment Classification and Resource Based Relative Value Scale (RBRVS)
What payment approach is similar to the inpatient DRG in that the amount paid is based on the
specific procedure or service provided to the patient? Correct answer-(APC) Ambulatory Payment
Classification
What payment approach is the physician payment per procedure or service, varies based on the
amount of resources (usually time and effort) needed by the physician. Correct answer-Resource
Based Relative Value Scale (RBRVS)
__________ at 100% of the per-procedure fee Correct answer-Primary procedure
_________ at 50% of the normal per-procedure fee Correct answer-Secondary procedure
_________ 25% of the normal per-procedure fee Correct answer-Third and Subsequent procedure
What are the common discounting approches? Correct answer-primary , secondary, and
third/subsequent procedures
Affiliated Health Plan is negotiating a new contract with a local ambulatory surgery center. Previously,
Affiliated paid that surgery center on a discount-off-of-billed charges basis and is trying to change to
a per-procedure method of payment. Which of the following mechanisms must Affiliated have in
place in order to control its risk of increased costs? Correct answer-A utilization management
program
Because a per-procedure method creates an incentive for providers to bill for more procedures, the
health plan must monitor utilization and make sure that only medically necessary services are
provided.
Predetermined amount paid to a healthcare provider for a specified service or range of services.
Correct answer-Case rate
What is the difference between case rate and DRG Correct answer-The difference between case
rate and DRG is that the case rate encompasses a group of similar procedures while the DRG can be
specific to a unique diagnosis and may or may not include a procedure.
Where is a common area where case rates would be used? Correct answer-Cardiac surgery
which is used primarily for payment to long-term care facilities. Correct answer-Per diem (or per
day) payment system
CORRECT & 100% VERIFIED ANSWERS (UPDATED TO
PASS)
is a pre-determined amount that the patient pays before the insurer begins to pay for services
Correct answer-deductible
a percentage of the insurance payment amount that is paid by the patient, along with the amount
paid by the insurer. Correct answer-coinsurance
a flat amount that the patient pays at each time of service Correct answer-copayment
payment also includes amounts for services that are not included in the patient's benefit design and
amounts for services balance billed by out-of-network providers. Payments typically does not include
premium sharing by the patient. Correct answer-Out-of-pocket payment
The amount payable out of pocket for healthcare services, which may includes deductibles,
copayments, coinsurance, amounts payable by the patient for services that are not included in the
patient's benefit design, and amounts "balance billed" by out-of-network providers. Health insurance
premiums constitute a separate category of healthcare costs for patients, independent of healthcare
utilization. Correct answer-Cost (to the patient)
The expense (direct and indirect) incurred to deliver healthcare services to patients. Correct
answer-Costs (to the provider)
The amount payable to the provider (or reimbursable to the patient) for services rendered. Correct
answer-Cost (to the health plan/insurer)
The expense related to provided health benefits (premiums or claims paid) Correct answer-Cost (to
the employer)
The dollar amount a provider sets for services rendered before negotiating any discounts. The charge
can be different from the amount paid. Correct answer-Charge
The total amount a provider expects to be paid by health plans/payers and patients for healthcare
services. Correct answer-Price
An organization that negotiates or sets rates for provider services, collects revenue through premium
payments or tax dollars, processes provider claims for service, and pays provider claims using
collected premium or tax revenues. Correct answer-Health Plan/Payer
An entity, organization, or individual that furnishes a healthcare service. Correct answer-Provider
Occurs when a healthcare provider bills a patient for charges (other than copayments, coinsurance or
any amounts that may remain on the patient's annual deductible) that exceed the health plan's
payment for a covered service. In-network providers are contractually prohibited from balance billing
health plan members, but balance billing by out-of-network providers is common. Correct answer-
Balance Billing
,In healthcare, readily available information on the price of healthcare services that, together with
other information, helps define the value of those services and enables patients and other care
purchasers to identify, compare and choose providers that offer the desired level of value Correct
answer-Price Transparency
The quality of a healthcare service in relation to the total price paid for the service by care
purchasers. Correct answer-Value
the flow of money between the patient, the insurer, and the provider of healthcare services
Correct answer-Revenue Cycle
function between a healthcare facility or physician and an insurer is one of the most important
resource management challenges in today's healthcare industry. Correct answer-Billing and
Collection
An older term used to describe payment by an insurer to a healthcare facility or physician. This term
is used because a physician or healthcare facility provider render services to a patient and then
submits claims a claim to an insurer. The healthcare facility or physician waits for processing of that
claim by the insurer, and ultimately recieves payment, a determination of payment or a denial by the
insurer. Today it is more common to use the term payment. Correct answer-Reimbursement
The price set by a healthcare facility or physician for their services is referred to as Correct answer-
Charges or Billed Charges
The charges by a healthcare facility or physician represent the retail price and are usually compiled in
a price listing known as Correct answer-Chargemaster
a charge-based payment mechanism in which a provider is paid either list price (full charges) or a
percentage of charges (full charges less a discount) for the specific services rendered. Correct
answer-Fee-for-service
What does fee for service payment provides? Correct answer-more units of service in order to
receive more payments.
Why do Healthcare Facilities set Retail prices significantly above rates actually paid by commercial
insurers or the government? Correct answer-1. Access to Contracted Payment Rates.
-Rare not all insurers participate in provider networks that give them access to contracted payment
rates. Some auto insurers, liability insurers or companies providing travel insurance to visitors from
abroad still pay a provider's full charges.
2. Percent-of-Charge Contracts
-In markets with little competition, percent-of-charge contracts are still common. The higher the
price, the higher the percent-of-charge payment, unless the contract limits a provider's annual price
increases.
3. Outlier Provisions
-Some insurance contacts contain an outlier provision that entitles providers to an additional
payment (a lump-sum payment or a percentage of actual charges above a threshold) for particularly
sick and high-cost patients.
What is the use and benefits of Cost Based Payments? Correct answer-The only use of this method
today is in a limited set of small, rural healthcare facilities known as critical access hospitals. This
,mechanism has rarely been used for physicians. Cost-based payment calls for the insurer to pay the
healthcare provider based on the costs of providing services, with a nominal allowance for margin.
What is the Medicare program began with a payment mechanism to healthcare facilities that has
since been nearly eliminated from the healthcare industry — Correct answer-Cost based Payment
Which of the following would benefit the most from a cost-based payment method? Correct
answer-The healthcare provider
That's right! Let's understand how.
The payment mechanism is advantageous for healthcare providers, as there is a higher likelihood
that all costs will be paid, and there is no incentive to be efficient in providing care, since costs will be
reimbursed by the insurer. The rapid escalation of healthcare costs in the U.S. after the start of cost-
based payment in Medicare and Medicaid programs led to the implementation of the Prospective
Payment System (PPS) of paying acute care healthcare providers for inpatient services in 1983 and
outpatient services in 2000. Since then, CMS has introduced prospective payment systems for most
other types of institutional healthcare providers
Cost-Based payment decreased need for providers to be efficient.
Mountainside Health Plan is evaluating its payment of hospitals in its current service area. It is
looking to reduce its costs per patient and stabilize its overall payments to hospitals. Which of the
following payment methods would be least effective for the health plan to meet these objectives?
Correct answer-Cost-based payment
You selected the correct answer. Cost-based payment is the least predictable model for a health plan
and has the greatest risk of increased cost because it is dependent on the hospital's ability to
manage operating costs.
The table below shows the methods ranked from most predictable to least predictable.
What are the 5 main types of prospective payments used in today's healthcare market? Correct
answer-1. DRG healthcare provider
2. Per Procedure
3. Case rate - healthcare provider or physician
4. Per diem - healthcare provider
5. Bundled payment - healthcare provider, physicians and post-acute providers
A payment based on the patient's diagnosis is known as a Correct answer-(DRG) Diagnosis Related
Group
What is the most widely used in payments to healthcare providers. Correct answer-(DRG)'s
is a classification of a disease or injury into one of approximately 750 different categories.
The amount paid is a flat rate per discharge and is adjusted based on:
Relative severity of the patient's condition
Resources used to treat the condition as determined by the DRG for that condition Correct answer-
(DRG)
defines the increase or decrease adjustment to the payment. Correct answer-Relative weight
, (each DRG is assigned relative weight)
The average level of severity of conditions of patients in a healthcare provider during a specified
period is known as Correct answer-case mix index
A _________ pays a specified fee for each procedure performed on a patient in a healthcare provider
or ambulatory care facility, or by a physician. Correct answer-Health plan
What 2 payment approaches are used in the per-procedure payment plan? Correct answer-(APC)
Ambulatory Payment Classification and Resource Based Relative Value Scale (RBRVS)
What payment approach is similar to the inpatient DRG in that the amount paid is based on the
specific procedure or service provided to the patient? Correct answer-(APC) Ambulatory Payment
Classification
What payment approach is the physician payment per procedure or service, varies based on the
amount of resources (usually time and effort) needed by the physician. Correct answer-Resource
Based Relative Value Scale (RBRVS)
__________ at 100% of the per-procedure fee Correct answer-Primary procedure
_________ at 50% of the normal per-procedure fee Correct answer-Secondary procedure
_________ 25% of the normal per-procedure fee Correct answer-Third and Subsequent procedure
What are the common discounting approches? Correct answer-primary , secondary, and
third/subsequent procedures
Affiliated Health Plan is negotiating a new contract with a local ambulatory surgery center. Previously,
Affiliated paid that surgery center on a discount-off-of-billed charges basis and is trying to change to
a per-procedure method of payment. Which of the following mechanisms must Affiliated have in
place in order to control its risk of increased costs? Correct answer-A utilization management
program
Because a per-procedure method creates an incentive for providers to bill for more procedures, the
health plan must monitor utilization and make sure that only medically necessary services are
provided.
Predetermined amount paid to a healthcare provider for a specified service or range of services.
Correct answer-Case rate
What is the difference between case rate and DRG Correct answer-The difference between case
rate and DRG is that the case rate encompasses a group of similar procedures while the DRG can be
specific to a unique diagnosis and may or may not include a procedure.
Where is a common area where case rates would be used? Correct answer-Cardiac surgery
which is used primarily for payment to long-term care facilities. Correct answer-Per diem (or per
day) payment system
