Certified Professional Coder (CPC) Quiz: Apply Medicare Coverage Rules
20 questions · exam conditions
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Apply Medicare Coverage RulesQuestion 1 of 20

A non-participating Medicare provider does not accept assignment on a claim. What is the maximum amount the provider may charge the Medicare patient?

100% of the Medicare fee schedule
105% of the Medicare fee schedule
109.25% of the Medicare fee schedule
115% of the Medicare fee schedule
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Certified Professional Coder (CPC) Quiz

Certified Professional Coder (CPC) Quiz: Apply Medicare Coverage Rules

Practice Apply Medicare Coverage Rules in Certified Professional Coder (CPC) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Apply Medicare Coverage Rules, giving you a quick way to practice the rules, question types, and explanations that matter most for Certified Professional Coder (CPC).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A non-participating Medicare provider does not accept assignment on a claim. What is the maximum amount the provider may charge the Medicare patient?

  1. 100% of the Medicare fee schedule
  2. 105% of the Medicare fee schedule
  3. 109.25% of the Medicare fee schedule (correct answer)
  4. 115% of the Medicare fee schedule
Explanation: When a non-participating provider does not accept assignment, they are subject to the limiting charge — a maximum of 115% of the non-PAR fee schedule. Since non-PAR providers are paid at 95% of the Medicare fee schedule, 115% of 95% equals approximately 109.25% of the standard Medicare fee schedule. Charging above the limiting charge is a Medicare violation.

Question 2

Medicare Part B covers which of the following categories of services?

  1. Inpatient hospital care and skilled nursing facility stays
  2. Prescription drugs provided in the outpatient pharmacy setting
  3. Physician services, outpatient care, and preventive services (correct answer)
  4. Hospice care and home health services
Explanation: Medicare Part B covers medically necessary physician services, outpatient hospital care, durable medical equipment, and certain preventive services. Part A covers inpatient hospital, skilled nursing facility, and hospice care. Part D covers outpatient prescription drugs. Part B requires a monthly premium and typically involves a 20% coinsurance after the annual deductible.

Question 3

A non-participating Medicare provider (non-PAR) who accepts assignment on a specific claim may charge the patient up to what percentage of the Medicare fee schedule amount?

  1. 100%
  2. 115%
  3. 125%
  4. 109.25% (correct answer)
Explanation: Non-participating providers who accept assignment on a claim are paid 95% of the Medicare fee schedule amount (5% less than PAR providers). When a non-PAR accepts assignment, they cannot charge more than the Medicare-approved amount for that claim. The 115% limiting charge applies only to non-PAR providers who do not accept assignment — they may charge up to 115% of the non-PAR fee schedule, which is 109.25% of the Medicare fee schedule.

Question 4

Medicare's Annual Wellness Visit (AWV) for an established patient is reported with which HCPCS code?

  1. G0438
  2. G0439 (correct answer)
  3. 99387
  4. 99397
Explanation: HCPCS code G0439 covers the Annual Wellness Visit (AWV) for subsequent years (established patients). G0438 covers the Initial Preventive Physical Examination (IPPE), also known as the "Welcome to Medicare" exam, for new enrollees. CPT® codes 99387 and 99397 are preventive medicine visit codes used for non-Medicare patients; Medicare does not recognize these CPT® preventive codes and uses G codes instead.

Question 5

Medicare covers a colorectal cancer screening colonoscopy for average-risk beneficiaries at age 50 and older once every how many years?

  1. 5 years
  2. 7 years
  3. 10 years (correct answer)
  4. 2 years
Explanation: Medicare covers a screening colonoscopy for average-risk Medicare beneficiaries once every 10 years after age 50. For high-risk beneficiaries, the frequency is once every 2 years. If a polyp is found and removed during a screening colonoscopy, changing the procedure from screening to diagnostic does not change the patient's cost-sharing if it began as a screening exam under current Medicare policy.

Question 6

A physician documents medical necessity for a service, but Medicare's LCD for that service requires a specific covered diagnosis code. The physician's documented diagnosis is not on the LCD's covered diagnosis list. What should the coder do?

  1. Report the procedure with whatever diagnosis is documented; LCDs are guidelines, not requirements
  2. Issue an ABN to the patient and report the procedure with the documented diagnosis, noting the potential non-coverage (correct answer)
  3. Change the diagnosis to match an LCD-covered code to ensure payment
  4. Report the service only when the diagnosis matches the LCD without issuing an ABN
Explanation: When a documented diagnosis is not on the LCD's list of covered indications, the provider should issue an ABN to notify the patient that Medicare may not cover the service. The claim is submitted with the actual documented diagnosis — changing the diagnosis to match the LCD is fraudulent upcoding. The ABN protects the provider's right to bill the patient if Medicare denies the claim.

Question 7

A Medicare patient is seen for a routine physical examination (not a wellness visit) that Medicare does not cover. The physician performs the exam and also addresses the patient's hypertension during the same visit. How should the billing be handled?

  1. Bill Medicare for the entire visit; Medicare covers all physician services
  2. Issue an ABN for the physical exam; bill Medicare only for the separately identifiable medical E/M service with modifier -25 (correct answer)
  3. Bill the patient directly for the entire visit since Medicare does not cover physicals
  4. Bill Medicare using the AWV code (G0439) to capture both services
Explanation: Medicare does not cover routine physical examinations. However, if a separately identifiable, medically necessary E/M service is also performed (addressing hypertension), that portion is coverable. An ABN should be issued for the non-covered routine physical. The medical E/M is billed to Medicare with modifier -25 to indicate it is a significant, separately identifiable service. The patient is billed directly for the non-covered physical portion.

Question 8

The resource-based relative value scale (RBRVS) used by Medicare to determine physician payment consists of three components. Which component accounts for the largest percentage of the total relative value?

  1. Practice expense (44%)
  2. Professional liability insurance (4%)
  3. Physician work (52%) (correct answer)
  4. Geographic practice cost index (GPCI)
Explanation: The Medicare RBRVS assigns relative value units (RVUs) to physician services based on three components: physician work (52%), practice expense (44%), and professional liability insurance (PLI) (4%). The physician work component — which reflects time, technical skill, mental effort, and risk to the patient — comprises slightly more than half of the total relative value for any given service.

Question 9

A Medicare patient has Medicare as the secondary payer. Their employer group health plan (EGHP) is primary. The EGHP pays its portion first, and then Medicare is billed. What is this billing process called?

  1. Coordination of Benefits (COB) under the Medicare Secondary Payer (MSP) rules (correct answer)
  2. Crossover claim processing
  3. Subrogation billing
  4. Advance beneficiary notice billing
Explanation: The Medicare Secondary Payer (MSP) rules govern situations where Medicare is not the primary payer. Coordination of Benefits (COB) ensures that the primary insurer pays first and Medicare covers only applicable remaining costs. The MSP program protects Medicare from paying primary when another payer has primary responsibility (e.g., employer group health plan, workers' compensation, auto liability insurance).

Question 10

A Medicare beneficiary receives a service that is denied because it is deemed not medically necessary per a National Coverage Determination (NCD). An ABN was not issued prior to the service. Who bears financial responsibility for the denied claim?

  1. The provider — they cannot bill the patient without a valid prior ABN (correct answer)
  2. The patient — they received the service and must pay
  3. The patient's secondary insurer
  4. Medicare — denials are always appealed and eventually paid
Explanation: When a provider fails to issue a valid ABN before providing a service that Medicare subsequently denies as not medically necessary, the provider cannot bill the patient and must absorb the cost. The ABN is a prerequisite for shifting financial liability to the patient. Providers who routinely waive patient cost-sharing without an ABN may also face compliance issues.

Question 11

Medicare Part C, also known as Medicare Advantage, is administered by which type of organization?

  1. Private insurance companies approved by Medicare (correct answer)
  2. CMS directly, as a federal benefit extension
  3. State Medicaid agencies
  4. Hospital systems with CMS contracts
Explanation: Medicare Part C (Medicare Advantage) plans are administered by private insurance companies that contract with Medicare to provide Part A and Part B benefits, and often Part D coverage, to enrolled beneficiaries. These plans may offer additional benefits beyond traditional Medicare but must cover all Medicare-required services. Beneficiaries enrolled in Medicare Advantage cannot use traditional Medicare providers unless the plan allows it.

Question 12

A Medicare patient with end-stage renal disease (ESRD) is enrolled in a Medicare Advantage (Part C) plan. The patient requires dialysis services. Which entity is responsible for the primary payment of dialysis services?

  1. The Medicare Advantage plan (correct answer)
  2. Medicare Part B directly
  3. Medicare Part A
  4. CMS's ESRD coordinating center
Explanation: Medicare beneficiaries enrolled in a Medicare Advantage (Part C) plan receive all their Medicare-covered benefits — including dialysis for ESRD — through the private insurer administering the plan, not through traditional Medicare Part A or B. The Medicare Advantage plan is responsible for the primary payment of covered services, including dialysis. Traditional Medicare does not pay separately when a beneficiary is enrolled in Medicare Advantage.

Question 13

A physician plans to perform a service that Medicare may not cover for a specific diagnosis. The patient wishes to receive the service anyway and agrees to be financially responsible if Medicare denies the claim. Which form must be completed before the service is provided?

  1. Advance Beneficiary Notice (ABN) (correct answer)
  2. CMS-1500
  3. Certificate of Medical Necessity (CMN)
  4. Medicare Secondary Payer (MSP) questionnaire
Explanation: An Advance Beneficiary Notice of Noncoverage (ABN) must be issued to a Medicare beneficiary before a service is provided when the provider believes Medicare may deny the claim. The ABN informs the patient of the potential denial and their financial responsibility. Without a valid ABN, the provider cannot bill the patient if Medicare denies the claim.

Question 14

A Medicare patient is admitted to a skilled nursing facility (SNF) after a qualifying inpatient hospital stay of at least 3 days. Medicare Part A SNF coverage during the benefit period includes full coverage for days 1 through what day?

  1. Day 20 (correct answer)
  2. Day 60
  3. Day 90
  4. Day 100
Explanation: Medicare Part A covers skilled nursing facility care at 100% (no coinsurance) for days 1–20 of a benefit period following a qualifying 3-day inpatient hospital stay. Days 21–100 require a daily coinsurance from the patient. After day 100, Medicare provides no coverage for SNF care. Understanding the SNF benefit structure is essential for coding and billing in post-acute settings.

Question 15

A physician who participates in Medicare accepts assignment on all claims. What does accepting assignment mean?

  1. The physician accepts whatever the patient chooses to pay
  2. The physician bills Medicare first and then bills the patient for the full remaining balance
  3. The physician may charge up to 115% of the Medicare fee schedule
  4. The physician agrees to accept the Medicare-approved amount as payment in full and cannot balance-bill the patient (correct answer)
Explanation: A participating Medicare provider (PAR) accepts assignment on all claims, meaning they agree to accept the Medicare-approved amount (the fee schedule amount) as payment in full. Medicare pays 80% of the approved amount after the deductible; the patient is responsible for the 20% coinsurance. PAR providers cannot balance-bill patients beyond the approved amount.

Question 16

A Medicare patient requires durable medical equipment (DME). Which Medicare part covers DME provided in the outpatient/home setting?

  1. Medicare Part A
  2. Medicare Part B (correct answer)
  3. Medicare Part C only
  4. Medicare Part D
Explanation: Medicare Part B covers durable medical equipment (DME) prescribed for use in the patient's home. Examples include wheelchairs, walkers, hospital beds, and oxygen equipment. The DME must be medically necessary, prescribed by a physician, and meet Medicare's definition of DME (durable, medical in nature, used in the home, and able to withstand repeated use). A Certificate of Medical Necessity (CMN) may be required.

Question 17

A Local Coverage Determination (LCD) issued by a Medicare Administrative Contractor establishes coverage criteria for a specific service. What is the geographic scope of an LCD?

  1. National — it applies to all Medicare beneficiaries regardless of location
  2. State-specific — it applies only within the state where the provider is located
  3. Hospital-specific — it applies only to the facility that requested it
  4. Regional — it applies only within the jurisdiction of the MAC that issued it (correct answer)
Explanation: Local Coverage Determinations (LCDs) are developed and issued by individual Medicare Administrative Contractors (MACs) and apply only within their specific geographic jurisdiction. Different MACs may have different LCDs for the same service. NCDs take precedence over LCDs when both exist for the same service. Providers must follow the LCD applicable to their MAC's jurisdiction.

Question 18

A Medicare beneficiary has both Medicare Part B and a Medigap (Medicare supplemental insurance) policy. Medicare processes the claim and pays its portion. Who is billed next?

  1. The patient directly for their 20% coinsurance
  2. The provider cannot bill further after Medicare pays
  3. The patient's employer group health plan
  4. The Medigap insurer automatically, through crossover claims processing (correct answer)
Explanation: When a Medicare beneficiary has a Medigap policy, Medicare crossover claims processing automatically forwards the claim to the Medigap insurer after Medicare processes its payment. The Medigap policy is designed to cover the patient's cost-sharing obligations (deductibles and coinsurance). The provider should not bill the patient for the Medigap-covered portion before the Medigap insurer processes the crossover claim.

Question 19

Medicare Part D provides coverage for which type of service?

  1. Outpatient physician visits
  2. Durable medical equipment
  3. Prescription drugs dispensed through outpatient pharmacies (correct answer)
  4. Inpatient prescription medications administered during a hospital stay
Explanation: Medicare Part D is a voluntary prescription drug benefit covering outpatient pharmacy-dispensed medications. It is provided through private plans approved by Medicare. Part D does not cover drugs administered in a hospital inpatient setting (covered under Part A) or drugs administered in the physician office as part of a covered Part B service (such as chemotherapy infusions, covered under Part B).

Question 20

A provider opts out of Medicare entirely. What are the billing implications for Medicare beneficiaries who receive services from this provider?

  1. The provider cannot see Medicare patients under any circumstances
  2. The provider can bill Medicare directly and charge above the limiting charge
  3. The provider is treated as a non-participating provider and subject to limiting charge rules
  4. The provider and patient must enter into a private contract; Medicare will not pay anything for the service (correct answer)
Explanation: Providers who opt out of Medicare cannot bill Medicare or receive Medicare payment for any services provided to Medicare beneficiaries. Instead, the provider and patient enter into a private contract that details the services and fees. Medicare will not reimburse any portion of services provided under a private contract. This is distinct from non-participating status, where the provider can still bill Medicare.