Which of the following is true about the Common Working File (CWF)?

The Common Working File (CWF) serves a critical role in the Medicare system by containing patient eligibility and utilization data. This information is essential for verifying a patient's Medicare coverage, determining their eligibility for services, and assessing the utilization of those services. This function ensures that healthcare providers receive accurate information when billing for services, which is vital for maintaining compliance and facilitating correct reimbursement for care provided to Medicare beneficiaries.

While other options may touch on aspects of healthcare data management or billing, they do not accurately represent the primary purpose of the CWF. It is not specifically for storing financial data from hospitals or being limited to auditing purposes, nor does it manage patient billing directly. Instead, it supports the validation of eligibility and the appropriate use of Medicare resources.