Medical Coding and Billing

Mistaken payments add as much as an estimated $200 billion, in excess of 10% of national healthcare expenses.

Other Party Liability (OPL) alone, i.e., claims that needs to be paid by somebody else, make up $68 billion or 3.6% of national healthcare costs.

The huge size of prospective savings on improving claims processing continues to attract attention and resources of software developers.

Insurance profitability specialists think that a payment scrutiny program could be as effective a profit-building method for insurance organizations as raising premiums or adding members.

A growing business of outsourced technologies and services to keep away from mistaken payments is also symptomatic of a growing demand for such services. Some vendors cite cumulative payment savings as high as $3 billion.

Nevertheless, avoiding mistaken payments is tough due to four-pronged constraints, namely, the volume of claims, the disparate and disconnected sources of relevant info, the resource-intensive manual processes required to identify and investigate recovery opportunities, and regulatory specifications for timely payments.

To manage these difficulties, a lot of payers adopted a two-phase-based “pay-and-refund” approach for payment minimization. The second phase of this approach is developed to right any errors created for the duration of the very first phase. Every of the phases might be further divided into two stages.

Particularly, the initial phase splits into prepayment assessment and timely payment of valid items, whilst the final phase consists of post-payment audits and refunds of items verified invalid for the duration of the audit.

Prepayment Review

Prepayment assessment usually proceeds in two stages, identification and confirmation. Prospective overpayment identification demands cross-referencing several systems that manage provider enrollment, authorizations, recovery case management, and call centers for both insured and providers.

Overpayment confirmation utilizes Right Coding Initiative (CCI), Neighborhood Medical Assessment Policies (LMRP), along with other rules to categorize the prospective overpayments into Contractual/Clinical, Eligibility, Coordination of Positive aspects, or Duplicate Payments.

Overpayment confirmation normally consists of tests for inter-claim, intra-claim, or cross claim inconsistencies, lifetime duplicates, date range duplicates, re-bundling, inappropriate modifier codes, wrong E&M crosswalk, upcoded or undercoded visit level, etc.

Prepayment evaluation calls for powerful database technologies. Most of prepayment claim assessment process is often automated along with subsequent denial notice or explanation of positive aspects (EOB).

Post-Payment Audit

In contrast, post-payment audits tend to consume more resources in the course of each and every one of the audit stages: Target identification Audit identification report shows total annual revenue and the degree of variance between the audit target and peers in the same specialty and geography. The product of the two numbers is proportional to the expected gain from the audit, essentially providing a natural audit ranking.

Audit preparation A higher return to the payer is the key advantage of a carefully created and executed post-payment audit. Audit preparation starts with a assessment of audit target selection, which is the result of provider profiling and variance reporting. This stage consists of a list of claims paid in the past that are most likely to fall outside of standard distribution of the peer group.

Audit execution The auditor requests and analyzes medical notes supporting the data reflected in the sample of paid claims produced at the audit preparation stage. The auditor’s objective is to establish the proportion of claims found unsupported by reviewed medical notes within the set of audited sample (percent of overpayment).

Refund (and penalty) extrapolation The auditor extrapolates refund as the product of percent of overpayment and the total payments by the auditing insurance carrier for the past six years.

Negotiation

Settlement

Some stages, such as audit execution, negotiation, and settlement must be entirely manual, and may require highly skilled and experienced personnel. Other stages, such as verification of overpayment amount and currency, identification of overpayment reason, and audit prioritization, may be partially automated, using rule-based technologies to identify procedure repetition, high payments per day, surge analysis, unusual modifiers, unusual procedure rates, geographic improbabilities, or 5/50 patterns. External resources might be added at this stage to consult provider watch lists, OIG sanctions databases, or high-risk address databases.

Summary

A full-scale implementation of payment scrutiny needs sophisticated processes to handle prepayment claim evaluation and post-payment audits and utilizes advanced fraud detection technologies. Prepayment claim reviews are less expensive than post-payment audits and therefore is often applied to every claim, whilst post-payment audits must be carefully targeted. A system to manage overpayment recovery process must include claim identification, its history, provider and insured details, medical notes, insured services call center notes, authorizations, etc. Without the ability to efficiently manage a large volume of recovery cases, the risk for errors or missed payment deadlines is high, resulting in missed recovery opportunities.

RSS Medical Billing News
  • An error has occurred; the feed is probably down. Try again later.
RSS Medical Coding News
  • An error has occurred; the feed is probably down. Try again later.