CPB (Certified Professional Biller) Certification Practice Exam

Which term represents EFT when it comes to medical billing practices?

1. Electronic funds transfer

2. Durable Medical Equipment regional carriers

3. Diagnosis related groups

4. (California) Employment Development Department

The correct answer is: Electronic funds transfer

The term that represents EFT in medical billing practices is "Electronic funds transfer." This refers to the digital movement of money from one bank account to another without the physical exchange of cash or checks. In the context of medical billing, EFT facilitates the direct deposit of payments from insurance companies to healthcare providers' accounts, streamlining the reimbursement process and reducing the chances of delays and errors associated with paper checks. Using electronic funds transfer is particularly beneficial in healthcare as it enhances efficiency, improves cash flow for providers, and allows for quicker access to funds. It is a critical component of modern medical billing practices, as it contributes to timely payments and helps ensure that healthcare organizations can operate smoothly. This process is widely adopted across the industry to modernize and enhance the efficiency of financial transactions. The other terms listed do not align with the definition of transferring funds electronically. Durable Medical Equipment regional carriers refer to specific payers for durable medical equipment claims. Diagnosis related groups are used for classifying inpatient stays and establishing payment rates. The Employment Development Department pertains to employment services and benefits rather than financial transactions in medical billing.