ABQUARP CHCQM Exam 2025/2026
Certified in Healthcare Quality and Management — 190+
Verified Practice Questions with Rationales
Physician Advisor Edition | Real Exam Q&A Format
DOMAIN 1: UTILIZATION MANAGEMENT &
RESOURCE ALLOCATION
1. A physician advisor is reviewing a case where a patient is admitted for elective knee
replacement but has uncontrolled diabetes (HbA1c 11.2%). The most appropriate
recommendation is:
A) Approve the admission as requested since the surgery is already scheduled
B) Recommend delay of elective surgery until diabetes is optimized ✅ (correct answer)
C) Approve with a concurrent review in 24 hours
D) Deny the admission and discharge the patient
Rationale: Uncontrolled diabetes significantly increases surgical risk (infection, poor wound
healing, delayed recovery). Evidence-based utilization management supports deferring elective
procedures until HbA1c is <8%, reducing complications and unnecessary resource use.
2. Which of the following BEST defines medical necessity in the context of utilization
management?
A) Any service a patient or family requests that a physician orders
B) Services that are appropriate, clinically indicated, and consistent with evidence-based
standards of care ✅ (correct answer)
C) Any service covered by the patient's insurance plan
D) Services ordered by a board-certified specialist
Rationale: Medical necessity is the cornerstone of utilization management. It requires that
services be clinically appropriate, consistent with the diagnosis, not primarily for the
convenience of the patient or provider, and aligned with accepted evidence-based practice
standards.
,3. InterQual and Milliman Care Guidelines (MCG) are primarily used in utilization management
to:
A) Determine physician credentialing standards
B) Set hospital reimbursement rates
C) Provide evidence-based criteria for level-of-care and admission decisions ✅ (correct
answer)
D) Establish quality benchmarks for hospital accreditation
Rationale: InterQual and MCG are widely used clinical decision support tools that provide
evidence-based criteria to guide appropriate level-of-care determinations, supporting utilization
review decisions.
4. A patient admitted as inpatient for chest pain is found to have a normal workup after 18 hours.
The most appropriate physician advisor action is:
A) Extend the inpatient stay for 24 more hours for observation
B) Recommend conversion to observation status or discharge if clinically appropriate ✅
(correct answer)
C) Order additional cardiac testing to justify continued inpatient status
D) Transfer the patient to a skilled nursing facility
Rationale: When inpatient criteria are no longer met and the clinical workup is negative,
continued inpatient stay is not medically justified. Converting to observation or discharging
avoids inappropriate resource utilization and payor denial risk.
5. Which level of care is most appropriate for a patient requiring IV antibiotics for cellulitis with
no systemic signs of sepsis and stable vital signs?
A) ICU admission
B) Inpatient acute care
C) Observation status ✅ (correct answer)
D) Emergency department only
Rationale: Uncomplicated cellulitis requiring IV antibiotics without sepsis or comorbid
complications typically meets observation-level criteria. Inpatient admission would require
evidence of severity or risk of complications meeting InterQual or MCG thresholds.
6. The two-midnight rule, established by CMS, states that:
, A) A patient must be in observation for at least two midnights before inpatient admission
B) Inpatient admission is generally appropriate when the physician reasonably expects
the patient to require hospital care spanning at least two midnights ✅ (correct answer)
C) Medicare pays for observation services only if the stay exceeds two midnights
D) A physician has two midnights to change an order from inpatient to observation
Rationale: CMS's two-midnight rule (effective 2013) holds that if a physician expects a
medically necessary hospital stay to cross two midnights, inpatient admission is generally
appropriate for Medicare billing purposes.
7. A payer denies an inpatient claim stating care could have been provided at a lower level. As a
physician advisor, your FIRST action is:
A) Accept the denial and write off the claim
B) Review the medical record to assess whether inpatient criteria were met and prepare a
peer-to-peer if warranted ✅ (correct answer)
C) File a complaint with the state insurance commission
D) Contact the patient to explain the denial
Rationale: The first step is a thorough medical record review. If inpatient criteria were met, the
physician advisor should initiate a peer-to-peer review with the payer's medical director to
present the clinical rationale and potentially overturn the denial.
8. What is the primary goal of prospective utilization review?
A) Audit claims after discharge to identify overpayments
B) Evaluate appropriateness of care after services are rendered
C) Assess the appropriateness and medical necessity of planned services before they
occur ✅ (correct answer)
D) Determine billing codes for submitted claims
Rationale: Prospective utilization review (prior authorization) evaluates planned services before
they are delivered, preventing unnecessary or inappropriate care and controlling costs
proactively.
9. Which of the following is an example of concurrent utilization review?
A) Pre-authorization for elective hip replacement
B) Post-discharge claim audit by an insurance company
, C) Daily physician advisor rounding to assess continued stay necessity ✅ (correct
answer)
D) Annual review of hospital admitting patterns
Rationale: Concurrent review occurs while the patient is receiving care. Daily review of
inpatient cases to assess medical necessity for continued stay is the hallmark of concurrent
utilization management.
10. A patient has been in observation status for 72 hours. The most appropriate next step is:
A) Continue observation for another 48 hours
B) Evaluate for inpatient admission conversion, discharge, or transfer, as extended
observation is clinically and financially problematic ✅ (correct answer)
C) Automatically convert to inpatient status since 72 hours have passed
D) Consult social work only
Rationale: Observation beyond 48–72 hours is a red flag. Extended observation doesn't count
toward Medicare SNF qualifying days and places significant financial burden on patients.
Clinical reassessment and disposition planning are imperative.
11. Which federal act prohibits physicians from referring patients to facilities in which they have
a financial interest?
A) EMTALA
B) HIPAA
C) Stark Law (Physician Self-Referral Law) ✅ (correct answer)
D) Anti-Kickback Statute
Rationale: The Stark Law prohibits physician self-referral for designated health services to
entities in which the physician or an immediate family member has a financial relationship,
unless an exception applies.
12. The Anti-Kickback Statute (AKS) prohibits:
A) Physicians from practicing in more than one state
B) Offering, paying, soliciting, or receiving remuneration to induce or reward referrals of
federally funded healthcare business ✅ (correct answer)
C) Hospitals from denying emergency care based on ability to pay
D) Balance billing Medicare patients above allowed amounts
Certified in Healthcare Quality and Management — 190+
Verified Practice Questions with Rationales
Physician Advisor Edition | Real Exam Q&A Format
DOMAIN 1: UTILIZATION MANAGEMENT &
RESOURCE ALLOCATION
1. A physician advisor is reviewing a case where a patient is admitted for elective knee
replacement but has uncontrolled diabetes (HbA1c 11.2%). The most appropriate
recommendation is:
A) Approve the admission as requested since the surgery is already scheduled
B) Recommend delay of elective surgery until diabetes is optimized ✅ (correct answer)
C) Approve with a concurrent review in 24 hours
D) Deny the admission and discharge the patient
Rationale: Uncontrolled diabetes significantly increases surgical risk (infection, poor wound
healing, delayed recovery). Evidence-based utilization management supports deferring elective
procedures until HbA1c is <8%, reducing complications and unnecessary resource use.
2. Which of the following BEST defines medical necessity in the context of utilization
management?
A) Any service a patient or family requests that a physician orders
B) Services that are appropriate, clinically indicated, and consistent with evidence-based
standards of care ✅ (correct answer)
C) Any service covered by the patient's insurance plan
D) Services ordered by a board-certified specialist
Rationale: Medical necessity is the cornerstone of utilization management. It requires that
services be clinically appropriate, consistent with the diagnosis, not primarily for the
convenience of the patient or provider, and aligned with accepted evidence-based practice
standards.
,3. InterQual and Milliman Care Guidelines (MCG) are primarily used in utilization management
to:
A) Determine physician credentialing standards
B) Set hospital reimbursement rates
C) Provide evidence-based criteria for level-of-care and admission decisions ✅ (correct
answer)
D) Establish quality benchmarks for hospital accreditation
Rationale: InterQual and MCG are widely used clinical decision support tools that provide
evidence-based criteria to guide appropriate level-of-care determinations, supporting utilization
review decisions.
4. A patient admitted as inpatient for chest pain is found to have a normal workup after 18 hours.
The most appropriate physician advisor action is:
A) Extend the inpatient stay for 24 more hours for observation
B) Recommend conversion to observation status or discharge if clinically appropriate ✅
(correct answer)
C) Order additional cardiac testing to justify continued inpatient status
D) Transfer the patient to a skilled nursing facility
Rationale: When inpatient criteria are no longer met and the clinical workup is negative,
continued inpatient stay is not medically justified. Converting to observation or discharging
avoids inappropriate resource utilization and payor denial risk.
5. Which level of care is most appropriate for a patient requiring IV antibiotics for cellulitis with
no systemic signs of sepsis and stable vital signs?
A) ICU admission
B) Inpatient acute care
C) Observation status ✅ (correct answer)
D) Emergency department only
Rationale: Uncomplicated cellulitis requiring IV antibiotics without sepsis or comorbid
complications typically meets observation-level criteria. Inpatient admission would require
evidence of severity or risk of complications meeting InterQual or MCG thresholds.
6. The two-midnight rule, established by CMS, states that:
, A) A patient must be in observation for at least two midnights before inpatient admission
B) Inpatient admission is generally appropriate when the physician reasonably expects
the patient to require hospital care spanning at least two midnights ✅ (correct answer)
C) Medicare pays for observation services only if the stay exceeds two midnights
D) A physician has two midnights to change an order from inpatient to observation
Rationale: CMS's two-midnight rule (effective 2013) holds that if a physician expects a
medically necessary hospital stay to cross two midnights, inpatient admission is generally
appropriate for Medicare billing purposes.
7. A payer denies an inpatient claim stating care could have been provided at a lower level. As a
physician advisor, your FIRST action is:
A) Accept the denial and write off the claim
B) Review the medical record to assess whether inpatient criteria were met and prepare a
peer-to-peer if warranted ✅ (correct answer)
C) File a complaint with the state insurance commission
D) Contact the patient to explain the denial
Rationale: The first step is a thorough medical record review. If inpatient criteria were met, the
physician advisor should initiate a peer-to-peer review with the payer's medical director to
present the clinical rationale and potentially overturn the denial.
8. What is the primary goal of prospective utilization review?
A) Audit claims after discharge to identify overpayments
B) Evaluate appropriateness of care after services are rendered
C) Assess the appropriateness and medical necessity of planned services before they
occur ✅ (correct answer)
D) Determine billing codes for submitted claims
Rationale: Prospective utilization review (prior authorization) evaluates planned services before
they are delivered, preventing unnecessary or inappropriate care and controlling costs
proactively.
9. Which of the following is an example of concurrent utilization review?
A) Pre-authorization for elective hip replacement
B) Post-discharge claim audit by an insurance company
, C) Daily physician advisor rounding to assess continued stay necessity ✅ (correct
answer)
D) Annual review of hospital admitting patterns
Rationale: Concurrent review occurs while the patient is receiving care. Daily review of
inpatient cases to assess medical necessity for continued stay is the hallmark of concurrent
utilization management.
10. A patient has been in observation status for 72 hours. The most appropriate next step is:
A) Continue observation for another 48 hours
B) Evaluate for inpatient admission conversion, discharge, or transfer, as extended
observation is clinically and financially problematic ✅ (correct answer)
C) Automatically convert to inpatient status since 72 hours have passed
D) Consult social work only
Rationale: Observation beyond 48–72 hours is a red flag. Extended observation doesn't count
toward Medicare SNF qualifying days and places significant financial burden on patients.
Clinical reassessment and disposition planning are imperative.
11. Which federal act prohibits physicians from referring patients to facilities in which they have
a financial interest?
A) EMTALA
B) HIPAA
C) Stark Law (Physician Self-Referral Law) ✅ (correct answer)
D) Anti-Kickback Statute
Rationale: The Stark Law prohibits physician self-referral for designated health services to
entities in which the physician or an immediate family member has a financial relationship,
unless an exception applies.
12. The Anti-Kickback Statute (AKS) prohibits:
A) Physicians from practicing in more than one state
B) Offering, paying, soliciting, or receiving remuneration to induce or reward referrals of
federally funded healthcare business ✅ (correct answer)
C) Hospitals from denying emergency care based on ability to pay
D) Balance billing Medicare patients above allowed amounts
