Free NHA CBCS Practice Test: 40 Questions With Answers

Correct answer: B — $90.

The contractual adjustment is the billed charge minus the allowed amount: $250 − $160 = $90. The contract says that difference comes off the account, so it never becomes a patient balance. The remaining $160 splits into the $120 the payer sent and the $40 the patient owes.

A is the patient's share, not the adjustment. C is the insurance payment. D subtracts the insurance payment from the full charge, which quietly folds the patient's $40 into the write-off.

Figures and contract terms here are fictional. For the underlying distinction between a billed charge and an allowed amount, see HealthCare.gov: allowed amount.

Correct answer: D.

HIPAA permits a covered entity to use and disclose protected health information for treatment, payment, and health care operations without a separate authorization. Billing a claim is a payment purpose. That permission is not a blank check: the practice still applies safeguards and, for payment disclosures, still limits what it sends to the information reasonably needed.

A adds an authorization requirement that HIPAA does not generally impose on routine payment disclosures. B invents a condition the rule does not contain; a verbal promise from a payer employee is not a HIPAA mechanism. C takes a real permission and strips off the limits that come with it.

Source: HHS: uses and disclosures for treatment, payment, and health care operations

Correct answer: A — 270/271.

The 270 is the eligibility and benefit inquiry; the 271 is the response. It is the transaction built for the question "is this patient covered, and what are the benefits?"

B (276/277) asks and answers the status of a claim already submitted. C (835) is the remittance advice explaining how a claim was paid or adjusted. D (837) submits the claim itself.

An eligibility response answers a coverage-and-benefits inquiry; it is not the remittance showing how a particular claim was adjudicated.

Source: CMS: adopted HIPAA standards and operating rules

Correct answer: B — the abdominal pain.

In the outpatient setting, a diagnosis documented as possible, probable, suspected, questionable, rule out, or working is not coded as though it exists. The encounter is coded to the level of certainty actually reached, which here is the symptom. Codes for signs and symptoms are legitimate reporting choices when no definitive diagnosis has been established.

A codes an unconfirmed condition into the patient's record and onto a claim. C does the same thing and adds a symptom on top of it. D confuses the reason for the encounter with a service that was ordered.

Worth knowing: inpatient hospital coding handles uncertain diagnoses differently. If you learned this rule in a hospital context, check which setting the question is describing.

Sources: ICD-10-CM Official Guidelines for Coding and Reporting, FY 2026 (updated April 1, 2026) — Section I.B.4 and I.B.18 on signs and symptoms and coding to the level of certainty, and Section IV.H on uncertain diagnosis in outpatient services.

Correct answer: D.

The guidelines are explicit that both the Alphabetic Index and the Tabular List must be used. The Index points you to a location; the Tabular List is where you confirm the full code, pick up laterality and any required seventh character, and read the instructional notes that can change the answer. The Index does not always give the complete code — a dash at the end of an Index entry means characters are missing, and even without a dash you still have to look.

A skips verification of the complete code and its instructional notes. B invents a rule that does not exist; specificity, not brevity, is the standard. C substitutes a payer's website for the classification's own instructions.

Source: ICD-10-CM Official Guidelines, Section I.B.1

Correct answer: C — $200.

Order of operations matters. The deductible comes off first: $100 of the $600 allowed amount goes to the patient as deductible. Coinsurance then applies to what is left, not to the whole allowed amount: 20% × $500 = $100. Patient total = $100 + $100 = $200. The plan pays the other $400.

A stops after the deductible and forgets coinsurance. B applies 20% to the full $600 and skips the deductible entirely. D applies 20% to the full $600 and adds the deductible, incorrectly charging coinsurance on the $100 already counted as deductible.

All figures are fictional and the benefit assumptions are stated in the question so there is one defensible answer. See HealthCare.gov: deductible and HealthCare.gov: coinsurance.

Correct answer: C — the electronic remittance advice.

The remittance advice is the explanation of adjudication. It reports, claim by claim and line by line, what was allowed, what was paid, what was adjusted, and which reason codes apply. The funds transfer moves the money; the remittance tells you what the money means.

A confirms an amount arrived and nothing else. B describes coverage before the service and says nothing about how this claim was processed. D is an access document, not a payment document.

Posting from a bank total without the remittance is how practices end up with unexplained balances and missed underpayments.

Source: CMS: health care payment and remittance advice

Correct answer: A.

The minimum necessary standard asks covered entities to limit use, disclosure, and requests for protected health information to what is reasonably needed for the purpose. In practice that means identifying the categories of information each role needs and configuring access to match.

B is the failure mode the standard exists to prevent. C does not identify the individual user and does not limit access by that person's duties. D adds a case-by-case request process that the minimum necessary standard does not require; appropriate role-based access can provide the information the biller needs.

Note the boundary: minimum necessary does not apply to disclosures to or requests by a health care provider for treatment. It does apply to ordinary payment and operations work like this.

Source: HHS: minimum necessary requirement

Correct answer: D.

Prior authorization is the plan's decision that a service is medically necessary under its rules. It does not promise payment. Coverage still depends on the patient being eligible on the date of service, the service being a covered benefit, the claim being coded and filed correctly, and any plan limits or exclusions.

A restates the wrong assumption. B is backwards — authorization and eligibility answer different questions, and eligibility can change between the authorization and the visit. C confuses coverage with cost sharing; deductible and coinsurance apply to authorized services all the time.

Source: HealthCare.gov: preauthorization

Correct answer: C — two.

Count the positions. Four characters occupy positions 1 through 4. The seventh character has to sit in position 7. That leaves positions 5 and 6 empty, so two X placeholders fill them: four characters, X, X, then A.

A produces a code with the seventh character sitting in position 5, which is invalid. B leaves one position short. D pushes the seventh character into position 8.

A code that requires a seventh character is invalid without it, and the placeholder rule is what makes the character land where the classification expects it.

Source: ICD-10-CM Official Guidelines, Sections I.A.4 and I.A.5

Correct answer: B — query the provider.

The guidelines address this directly: when medical record documentation about the affected side conflicts, the patient's provider should be queried. Laterality is a clinical fact, and a coder is not the person who decides which knee it was.

A turns a documentation conflict into a tally. C bills a condition on a side that may not have it. D looks harmless but is not — unspecified-side codes are meant for situations where the record genuinely does not establish the side and clarification cannot be obtained, not as a way to route around a conflict you can resolve by asking.

A query is an ordinary, expected part of the job. It is not an accusation.

Source: ICD-10-CM Official Guidelines, Section I.B.13

Correct answer: A.

Claim adjustment group codes say who absorbs an adjustment. CO is contractual obligation — the adjustment is assigned to the provider and cannot be shifted to the patient. PR, by contrast, marks patient responsibility.

B is the PR group, not CO. C misreads an adjustment as a pending payment; an adjustment is a reduction, not a delay. D invents a coordination outcome the group code does not state.

One caution worth carrying past this question: a PR label on a remittance identifies an amount as patient responsibility under that payer's adjudication. It does not by itself override separate protections that limit what certain patients can be billed.

Source: CMS: health care payment and remittance advice

Correct answer: D.

Professional services billed by physicians and most suppliers go on the CMS-1500 on paper, or the 837 professional transaction electronically. Hospital institutional facility charges go on the UB-04, also called the CMS-1450, or the 837 institutional transaction.

A and B each force both claims onto one form and lose the professional-versus-institutional distinction that drives which fields, which payment rules, and which edits apply. C has the pairing exactly backwards.

The same encounter can legitimately generate both: a professional claim for the physician's work and an institutional claim for the facility's.

Sources: CMS Medicare Claims Processing Manual, Chapter 26 (CMS-1500 completion) · CMS: adopted HIPAA standards · CMS: institutional paper claim form (CMS-1450/UB-04)

Correct answer: C.

A vendor that handles protected health information to perform a function on a covered entity's behalf is a business associate, and the relationship has to be governed by a written agreement setting out permitted uses and disclosures and required safeguards.

A tells patients how the practice uses information; it does not bind a vendor. Neither a price list nor payment of an invoice establishes the required business associate agreement.

Not every vendor is a business associate. The test is whether the vendor creates, receives, maintains, or transmits protected health information on the covered entity's behalf — a billing company clearly does; a company that only delivers office supplies does not.

Source: HHS: business associates and business associate agreements

Correct answer: A.

The excerpt names two distinct requirements, and only one is satisfied. A referral is a written order from the primary care physician to see a specialist or receive certain services. A prior authorization is the plan's pre-service medical-necessity decision, not a promise of payment. They come from different parties and one does not substitute for the other.

B collapses two requirements into one. C and D are real billing tasks but neither is the gap this excerpt describes.

This plan's rules are supplied in the question because plans differ. Do not assume every plan requires a referral, or that a plan requiring one also requires authorization.

Sources: HealthCare.gov: referral · HealthCare.gov: preauthorization

Correct answer: B — Entry U, then Entry M.

This is the etiology/manifestation convention. Paired "use additional code" and "code first" notes are sequencing instructions: the underlying condition comes first, the manifestation follows. Codes titled "in diseases classified elsewhere" are manifestation codes and are never permitted as the first-listed or principal diagnosis.

A reverses the required order. C reports a manifestation code alone, which the convention forbids. D reports the same entry twice, which no instruction asks for.

The Alphabetic Index signals this pairing too: both conditions appear together, with the manifestation code in brackets, and the bracketed code is always sequenced second.

Source: ICD-10-CM Official Guidelines, Section I.A.13

Correct answer: D — HCPCS Level II.

HCPCS Level II is the alphanumeric code set for products, supplies, and services that fall outside CPT — durable medical equipment, prosthetics, orthotics, certain drugs, and supplies. A walker is squarely in that territory.

A classifies diagnoses, not equipment. B classifies procedures performed in the hospital inpatient setting. C covers professional procedures and services performed by clinicians, which is a different job from supplying a device.

Note the naming overlap that trips people up: CPT is HCPCS Level I. The full HCPCS system includes both levels, so read which level the question names.

Source: CMS: Healthcare Common Procedure Coding System

Correct answer: C.

Medicare's completion instructions put the rendering provider's NPI in the lower unshaded portion of item 24J. The group's billing NPI goes in item 33a. Both can appear on the same claim without conflict — they answer different questions: who performed the service, and who is billing for it.

A belongs in the patient identification fields. B goes in item 25. D goes in item 26.

Two boundaries the question deliberately excludes: for services provided incident to a physician's service where the ordering person is not supervising, the supervising provider's NPI goes here instead; and Medicare roster bills for influenza or pneumococcal vaccinations do not require a rendering provider NPI.

Sources: CMS Medicare Claims Processing Manual, Chapter 26, §10.4 · CMS: National Provider Identifier standard

Correct answer: A — 837.

The 837 is the health care claim transaction, with separate professional and institutional versions. It carries the claim to the payer.

B asks about eligibility and benefits before or around the service. C asks about the status of a claim already sent. D comes back from the payer explaining adjudication.

Learning these four by what they do rather than by number is what makes them usable: ask about coverage (270/271), send the claim (837), ask where it is (276/277), find out what happened to it (835).

Source: CMS: adopted HIPAA standards and operating rules

Correct answer: D.

Two facts in the question do the work: the codes do not match the documented service, and the instruction is knowing and deliberate. Billing a higher-level code than the record supports, on purpose, is upcoding.

A treats authority as a substitute for documentation; it is not. B describes something different and legitimate — asking a provider to clarify a note. A clarification request seeks an accurate explanation of the care documented; it does not authorize reporting a higher level that the care does not support. C is the honest-mistake case, which is precisely what this question excludes.

Not every coding error is fraud. Intent matters, and a specialist should not label a colleague's mistake as fraud without the facts this question supplies.

Source: HHS OIG: physician relationships with payers — accurate coding and billing

Correct answer: A — $200.

$2,000 − $1,800 = $200 remaining.

B is the amount already applied. C is the full annual deductible before any credit. D adds the two figures together, which describes nothing.

This question is reading an accumulator, not adjudicating a new service. The remaining deductible is the amount still needed to meet the annual deductible, not a bill the patient automatically owes. It does not tell you what this specific visit will cost, which also depends on the allowed amount and the applicable benefit rules, including coinsurance or copay.

Source: HealthCare.gov: deductible

Correct answer: C.

"With" and "in" are read to mean "associated with" or "due to" wherever they appear in a code title, in the Alphabetic Index, or in an instructional note. The classification presumes the causal relationship, so these conditions are coded as related even without explicit provider linkage.

That presumption has two limits, and they are the reason this convention gets misapplied in both directions. It does not hold if the documentation clearly states the conditions are unrelated, and it does not hold where another guideline specifically requires a documented linkage.

A applies the general documentation principle without noticing that the classification has already made the link. B calls for a query that these facts do not require — the convention establishes the relationship, and the record does not contradict it. D loses a documented condition.

Source: ICD-10-CM Official Guidelines, Section I.A.15

Correct answer: B — established.

For Medicare, a new patient has not received a face-to-face professional service from that physician or another physician of the same specialty in the same group practice within the past three years. Here the patient saw a physician of the same specialty in the same group, and two years is inside the three-year window.

A ignores the same-specialty, same-group part of the rule. C uses a one-year window, which is not the rule. D is irrelevant — payment history has nothing to do with patient status.

Changing physicians within the same-specialty group does not reset the three-year window. A different location alone would not make the patient new, either.

Source: CMS MLN006764: Evaluation and Management Services Guide

Correct answer: D.

A claim returned as unprocessable never completed adjudication. The fix is the one the notice names: correct the missing data element and resubmit. Appeal rights attach to determinations, and a claim that was never processed has not produced one.

A pursues an appeal path that does not apply and burns time. B puts a date on a claim that is not the date of service — a documentation and integrity problem, not a shortcut. C changes nothing, so the same edit fires again.

The wider habit worth building: before you decide whether to correct or to appeal, find out whether the claim was rejected before adjudication or denied after it. Those two words get used loosely in conversation and they lead to completely different work.

Source: CMS Medicare Claims Processing Manual, Chapter 1, §§80.3.1–80.3.2 · Chapter 26, §10.4, item 24A

Correct answer: A.

A claim-specific denial is appealed through the Medicare claims appeal process, which starts with the contractor that processed the claim. An NCCI edit does not move the claim-specific appeal to the NCCI policy contact.

B confuses two different conversations. General questions about edit policy go one place; a dispute about one adjudicated claim goes to the contractor. C is a certification organization with no role in claims. D publishes reference books and has no adjudication authority.

The question also does not promise the appeal will succeed, and neither should you. An edit denial is appealable; whether the documentation supports the position is a separate matter.

Source: CMS: National Correct Coding Initiative edits

Correct answer: A.

The audit question is about the relationship between two documents: what the record says happened, and what the claim said happened. Only a claim-to-record comparison tests that.

B measures productivity. C and D measure financial performance. All three can be useful management information and none of them answers whether coding was supported.

One assumption worth naming, because it is common and wrong: a paid claim is not evidence that the coding was correct. Payment does not immunize a practice from a later review.

Source: HHS OIG: physician relationships with payers — physician documentation

Correct answer: B — the group health plan.

Under the working-aged provision, when a beneficiary 65 or older has group health coverage through current employment and the employer has 20 or more employees, the group health plan pays primary and Medicare pays secondary. This employer meets both the headcount and the 20-calendar-week test.

Under the other facts given here, Medicare would be primary if the employer did not meet the 20-or-more-employee test in either the current or preceding year. A headcount that drops below 20 does not necessarily change payer order immediately. C and D are not coordination rules; the order of liability is set by regulation, not by arithmetic convenience or mail speed.

Notice how many facts the question had to supply to produce one answer: age basis for entitlement, current employment, employer size, and the absence of ESRD, disability, and a multi-employer plan. Each of those can change the result, which is why coordination questions live or die on intake accuracy.

Source: CMS: Medicare Secondary Payer · CMS Medicare Secondary Payer Manual, Chapter 1, §20.1

Correct answer: D.

For office and other outpatient visits, the level of service is selected on the basis of the level of medical decision making or on total time on the date of the encounter. History and examination are performed and documented as clinically appropriate, but they are not what sets the level. Copied-forward text adds length without adding either of the two things that count.

A and B apply the older bullet-counting approach that no longer governs these visits. C is a billing philosophy, not a coding rule, and describes exactly the pattern audits look for.

Source: CMS MLN006764: Evaluation and Management Services Guide

Correct answer: A.

The procedure-to-procedure modifier indicator answers one narrow question: may an NCCI-associated modifier be used to bypass this edit? An indicator of 0 means an NCCI-associated modifier cannot bypass this active edit. An indicator of 1 means a modifier may be used when the clinical circumstances genuinely support it.

B treats a modifier as a payment tool rather than a description of what happened. C is wrong twice over: anatomic modifiers are NCCI-associated modifiers and are still governed by the indicator. D confuses medical necessity with unbundling — both services can be necessary and the edit still stands.

The pair above is invented so the reasoning can be tested without depending on a real pair, whose indicator CMS can change in a quarterly release.

Sources: CMS Medicare NCCI FAQ library · CMS MLN1783722: proper use of modifiers 59, XE, XP, XS, XU

Correct answer: C — Claim W.

Under the standard rule used here, a Medicare fee-for-service claim must reach the appropriate Medicare contractor within one calendar year after the date of service. Claim W's date of service is September 21, 2025, so its filing deadline is September 21, 2026 — ten calendar days after the exercise date. The other deadlines are November 4, 2026, January 15, 2027, and April 2, 2027.

A sorts by convenience. B sorts only by dollars and ignores the nearest filing deadline; the claim amount does not extend that deadline. D is simply wrong.

Two boundaries. For physician and supplier claims that carry a date span, the "From" date starts the clock. And this is the Medicare rule — other payer contracts and rules can specify different limits, so an aging workflow has to track deadlines by payer rather than applying one number to everything.

Source: 42 CFR §424.44: time limits for filing claims · CMS Medicare Claims Processing Manual, Chapter 1, §§70–70.4.

Correct answer: A — $40.

Expected payer payment minus posted payer payment: $400 − $360 = $40 unexplained.

B is the patient's coinsurance, which the worksheet already accounts for. C is what the payer actually paid. D is what the payer was expected to pay.

The correct response is verification, not collection. A $40 gap with no adjustment explaining it may be a payer processing error, a contract rate loaded incorrectly, or a missing line on the remittance. It is not automatically the patient's problem, and moving an unexplained underpayment onto a patient balance is how practices generate complaints and refunds.

Sources: HealthCare.gov: allowed amount · CMS: health care payment and remittance advice

Correct answer: B.

Once a billing problem is identified, the first step is to stop the conduct — do not keep submitting claims you now know are unsupported — and bring it to the people responsible for handling it. That is a specific, limited, appropriate action for a billing specialist.

A treats prior payment as validation; it is not. C knowingly continues the conduct and makes the exposure worse. D is falsification of the record, which converts a billing error into something far more serious.

What the question deliberately does not ask you to do: decide the legal significance, calculate what is owed, set a repayment deadline, or self-report. Those are decisions for the compliance officer and the practice's counsel.

Source: HHS OIG: what to do if you think you have a problem

Correct answer: D — workers' compensation.

Workers' compensation is the primary payer for services related to an accepted work injury. Medicare is not the first payer for care that another payer is already responsible for.

A inverts the coordination rule. B incorrectly makes the patient the primary payer until case closure. C brings in a payer with no responsibility for the injury.

Two limits attached to this answer. It applies to care related to the accepted injury — unrelated care during the same period follows ordinary rules. And where a workers' compensation claim is disputed or payment is delayed, a separate conditional-payment process exists; this question excludes both situations so there is one defensible answer.

Source: CMS: Medicare Secondary Payer

Correct answer: A.

Assign only the combination code when that code fully identifies the diagnostic conditions involved. Multiple coding should not be used where the classification already provides a combination code that clearly identifies all the documented elements. Adding component codes on top repeats information that has already been reported.

B makes a habit out of something the guidelines specifically warn against. C reports one entry twice, which no instruction supports. D discards a documented complication.

The rule has a real edge, though, and it is worth holding onto: when a combination code lacks the specificity to describe the manifestation or complication fully, an additional code is appropriate as a secondary code. "Combination code" does not mean "never add anything."

Source: ICD-10-CM Official Guidelines, Section I.B.9

Correct answer: C — 11.

The encounter happens in a physician office with the patient present, and the office is not a provider-based hospital department. Code 11 describes exactly that.

A describes a confinement setting. B is for telehealth delivered to a patient who is at home — it describes the patient's location during a remote encounter, not an in-person visit. D is an in-person visit in the patient's private residence, which this is not.

Codes 10 and 12 both involve the patient's home, but only one of them is telehealth. Read what the patient was doing, not just where they were.

Source: CMS Medicare Claims Processing Manual, Chapter 26, §10.5 (place of service codes)

Correct answer: B — 10%.

20 ÷ 200 = 0.10, or 10%. The numerator is denied claims; the denominator is adjudicated claims in the defined cohort.

A halves the numerator. C reports the count of denials as if it were a percentage. D reports the share not denied on initial adjudication, rather than the denial rate.

Two habits worth taking from this. First, a denial rate means nothing without its denominator — claims or service lines, adjudicated or submitted, one month or twelve. Second, these figures are fictional and are not an industry benchmark. Comparing your rate to a number you read somewhere is only meaningful if both were calculated the same way.

Source: derived arithmetic from the figures supplied in the question.

Correct answer: B.

Coverage attaches to a combination — this service, by this provider, under this plan. The service is covered in network. The proposed provider is out of network. The plan has no out-of-network benefit for it. Nothing about the service being generally covered survives that combination.

A applies a rate the plan does not offer here. C assumes an authorization overrides the stated benefit exclusion, but this scenario provides no exception. D mistakes acceptance of an insurance card for a coverage determination; it does not establish that the plan will pay.

Telling the patient this before the service is the entire point. The alternative is a surprise balance and a conversation nobody wants.

Source: the fictional plan excerpt supplied above; for the limits of prior authorization, HealthCare.gov: preauthorization.

Correct answer: D.

Coding follows what the signed record documents was performed. The order describes an intention; the procedure note records the event. When they differ, the documented event governs.

A bills a procedure that explicitly did not happen. B bills only the procedure that did not happen and drops the one that did. C treats a normal clinical decision as if it erased the encounter.

A plan changing mid-procedure is ordinary medicine, not a documentation problem. For this abstraction task, report what the record documents was performed, not a procedure that remained only a plan.

Sources: HHS OIG: physician documentation · CMS MLN006764: Evaluation and Management Services Guide, documentation principles.

Correct answer: C — 276/277.

The 276 is the claim status request; the 277 is the response. It is built for exactly this question: what is happening to the claim I already sent?

A submits another claim rather than requesting the status of the existing one. B asks about the patient's coverage, which is not in doubt. D is the remittance the practice is waiting for; you cannot request it as a status check.

A status response tells you where the claim is. It is not a payment determination, and a status of "pending" is not a promise of anything.

Source: CMS: adopted HIPAA standards and operating rules

Correct answer: C.

This is an assignment of benefits. It directs the plan to send payment to the provider rather than to the patient. On the CMS-1500, that authorization corresponds to item 13. It is separate from the provider's acceptance of Medicare assignment, addressed in item 27.

A is a clinical routing decision made by a physician. B is a pre-service medical-necessity decision made by the plan. D is not something any signature can authorize.

Registration packets bundle several signatures that look similar and do very different jobs: assignment of benefits, release of information for claims processing, financial responsibility, and acknowledgment of privacy practices. The way to distinguish them is to read what each one actually says.

Source: CMS Medicare Claims Processing Manual, Chapter 26, §10.3 (item 13)