Certified Revenue Cycle Representative (CRCR) Practice Exam

Which of the following conditions does NOT disqualify a service from being paid by Medicare?

1. Medically unnecessary services

2. Services offered in an outpatient setting

3. Not delivered in a Medicare licensed care setting

4. Custodial nature of certain procedures

The correct answer is: Services offered in an outpatient setting

The correct answer highlights that services offered in an outpatient setting do not inherently disqualify those services from being paid by Medicare. Medicare actually covers a wide range of services provided in outpatient settings, including various diagnostic tests, preventive services, and outpatient therapy. The key factor for payment is that the service must be medically necessary and meet other criteria established by Medicare, which can be satisfied in an outpatient context. In contrast, the other options present situations that could lead to disqualification from Medicare payment. Medically unnecessary services, for example, are explicitly excluded from coverage because Medicare only pays for services deemed necessary for the treatment of a medical condition. Likewise, if a service is not delivered in a Medicare licensed care setting, it may be disqualified from payment, as Medicare requires certain standards for providers and facilities. Finally, the custodial nature of certain procedures can disqualify them, as Medicare does not cover services that are primarily custodial in nature, which are not considered medically necessary.