Certified Specialist Payment Rep (HFMA)
Exam (Latest Update ) Questions
& Answers | Grade A | 100% Correct
(Verified Solutions)
Question 1
What is the primary function of a Diagnosis-Related Group (DRG)?
A. Classify outpatient procedures for reimbursement
B. Classify inpatient admissions for fixed fee reimbursement
C. Determine Medicaid eligibility
D. Set capitation rates for managed care
Answer: B. Classify inpatient admissions for fixed fee reimbursement
Rationale: DRGs categorize inpatient hospital stays for reimbursement with a fixed fee based on
diagnosis, regardless of actual costs. Outpatient procedures use CPT codes, and DRGs are
unrelated to eligibility or capitation.
Question 2
Which private health plan uses high out-of-pocket costs to reduce utilization?
A. HMO
B. PPO
C. HDHP/SO
D. POS
Answer: C. HDHP/SO
Rationale: High-Deductible Health Plans with Savings Options (HDHP/SO) require higher
patient out-of-pocket costs to discourage unnecessary utilization. HMOs, PPOs, and POS plans
have lower deductibles.
Question 3
Which of the following is a managed care organization (MCO) type?
A. Medicare Fee-for-Service
B. Exclusive Provider Organization (EPO)
C. Medicare Advantage
D. Consumer-Directed Health Plan
Answer: B. Exclusive Provider Organization (EPO)
,Rationale: MCOs include HMO, PPO, POS, and EPO. EPOs limit coverage to in-network
providers. Medicare programs are government-sponsored, and CDHPs are not MCO types.
Question 4
What is a primary driver of rising healthcare costs?
A. Decreased chronic conditions
B. Chronic conditions
C. Simplified supply chains
D. Reduced provider cooperation
Answer: B. Chronic conditions
Rationale: Chronic conditions (e.g., diabetes, hypertension) drive costs due to ongoing treatment
needs. Supply chains and provider cooperation are secondary factors.
Question 5
Which Medicare part covers prescription drugs?
A. Part A
B. Part B
C. Part C
D. Part D
Answer: D. Part D
Rationale: Medicare Part D covers prescription drugs. Part A covers inpatient care, Part B
covers outpatient care, and Part C is Medicare Advantage.
Question 6
What did the HMO Act of 1973 mandate for employers?
A. Offer only HMO plans
B. Offer HMO plans alongside fee-for-service plans
C. Provide free healthcare
D. Exclude HMOs from benefits
Answer: B. Offer HMO plans alongside fee-for-service plans
Rationale: The HMO Act of 1973 required employers to offer federally qualified HMO plans
alongside fee-for-service plans under specific conditions.
Question 7
, What is the primary goal of a patient-centered medical home (PCMH)?
A. Increase emergency room usage
B. Empower patients with education and tools
C. Reduce provider cooperation
D. Focus solely on cost reduction
Answer: B. Empower patients with education and tools
Rationale: PCMH aims to educate and empower patients for better care decisions, not increase
ER use or reduce cooperation.
Question 8
Which is NOT a feature of Accountable Care Organizations (ACOs)?
A. Coordinated care delivery
B. Financial incentives for provider cooperation
C. Increasing emergency room services
D. Avoiding unnecessary tests
Answer: C. Increasing emergency room services
Rationale: ACOs focus on coordinated care, cost reduction, and avoiding unnecessary tests, not
increasing ER services.
Question 9
What is capitation in managed care?
A. Payment per service provided
B. Fixed payment per member per month (PMPM)
C. Reimbursement based on actual costs
D. Payment for bundled services only
Answer: B. Fixed payment per member per month (PMPM)
Rationale: Capitation pays providers a fixed PMPM amount for all member services, unlike fee-
for-service or cost-based models.
Question 10
What is a key element of HFMA’s Patient Financial Communications (PFC) Best Practices?
A. Discussing costs only after insurance adjudication
B. Providing clarity on service costs and patient responsibility
C. Avoiding financial discussions in all settings
D. Charging uninsured patients higher rates
Answer: B. Providing clarity on service costs and patient responsibility
Rationale: HFMA’s PFC Best Practices emphasize transparency in discussing costs, insurance
Exam (Latest Update ) Questions
& Answers | Grade A | 100% Correct
(Verified Solutions)
Question 1
What is the primary function of a Diagnosis-Related Group (DRG)?
A. Classify outpatient procedures for reimbursement
B. Classify inpatient admissions for fixed fee reimbursement
C. Determine Medicaid eligibility
D. Set capitation rates for managed care
Answer: B. Classify inpatient admissions for fixed fee reimbursement
Rationale: DRGs categorize inpatient hospital stays for reimbursement with a fixed fee based on
diagnosis, regardless of actual costs. Outpatient procedures use CPT codes, and DRGs are
unrelated to eligibility or capitation.
Question 2
Which private health plan uses high out-of-pocket costs to reduce utilization?
A. HMO
B. PPO
C. HDHP/SO
D. POS
Answer: C. HDHP/SO
Rationale: High-Deductible Health Plans with Savings Options (HDHP/SO) require higher
patient out-of-pocket costs to discourage unnecessary utilization. HMOs, PPOs, and POS plans
have lower deductibles.
Question 3
Which of the following is a managed care organization (MCO) type?
A. Medicare Fee-for-Service
B. Exclusive Provider Organization (EPO)
C. Medicare Advantage
D. Consumer-Directed Health Plan
Answer: B. Exclusive Provider Organization (EPO)
,Rationale: MCOs include HMO, PPO, POS, and EPO. EPOs limit coverage to in-network
providers. Medicare programs are government-sponsored, and CDHPs are not MCO types.
Question 4
What is a primary driver of rising healthcare costs?
A. Decreased chronic conditions
B. Chronic conditions
C. Simplified supply chains
D. Reduced provider cooperation
Answer: B. Chronic conditions
Rationale: Chronic conditions (e.g., diabetes, hypertension) drive costs due to ongoing treatment
needs. Supply chains and provider cooperation are secondary factors.
Question 5
Which Medicare part covers prescription drugs?
A. Part A
B. Part B
C. Part C
D. Part D
Answer: D. Part D
Rationale: Medicare Part D covers prescription drugs. Part A covers inpatient care, Part B
covers outpatient care, and Part C is Medicare Advantage.
Question 6
What did the HMO Act of 1973 mandate for employers?
A. Offer only HMO plans
B. Offer HMO plans alongside fee-for-service plans
C. Provide free healthcare
D. Exclude HMOs from benefits
Answer: B. Offer HMO plans alongside fee-for-service plans
Rationale: The HMO Act of 1973 required employers to offer federally qualified HMO plans
alongside fee-for-service plans under specific conditions.
Question 7
, What is the primary goal of a patient-centered medical home (PCMH)?
A. Increase emergency room usage
B. Empower patients with education and tools
C. Reduce provider cooperation
D. Focus solely on cost reduction
Answer: B. Empower patients with education and tools
Rationale: PCMH aims to educate and empower patients for better care decisions, not increase
ER use or reduce cooperation.
Question 8
Which is NOT a feature of Accountable Care Organizations (ACOs)?
A. Coordinated care delivery
B. Financial incentives for provider cooperation
C. Increasing emergency room services
D. Avoiding unnecessary tests
Answer: C. Increasing emergency room services
Rationale: ACOs focus on coordinated care, cost reduction, and avoiding unnecessary tests, not
increasing ER services.
Question 9
What is capitation in managed care?
A. Payment per service provided
B. Fixed payment per member per month (PMPM)
C. Reimbursement based on actual costs
D. Payment for bundled services only
Answer: B. Fixed payment per member per month (PMPM)
Rationale: Capitation pays providers a fixed PMPM amount for all member services, unlike fee-
for-service or cost-based models.
Question 10
What is a key element of HFMA’s Patient Financial Communications (PFC) Best Practices?
A. Discussing costs only after insurance adjudication
B. Providing clarity on service costs and patient responsibility
C. Avoiding financial discussions in all settings
D. Charging uninsured patients higher rates
Answer: B. Providing clarity on service costs and patient responsibility
Rationale: HFMA’s PFC Best Practices emphasize transparency in discussing costs, insurance
