Medical Claims Review to Ensure Accuracy and Appropriateness of Provider Billings

by | Published on Jun 15, 2016 | Medical Review Services

Medical claims review is an important process health insurers perform to ensure that the provider billings are accurate, appropriate and reasonable for the services provided to patients. It is the key to controlling costs, preventing healthcare providers from obtaining reimbursement for services that may not have been provided at all. Claim review services provided by a medical records review company involves examining all medical records and making sure that the services billed were actually provided, and provided in the quantities that are billed.

Health plans demand a medical record review in certain circumstances, and for certain procedures and services. These include:

  • When a service is submitted with a procedure code that is vague
  • Speech therapy, physical therapy or occupational therapy
  • Nonsurgical obesity services
  • Low vision rehabilitation
  • Dental/oral maxillofacial services or procedures
  • Investigational or experimental procedures, drugs, devices and other services/supplies
  • Services for which the procedure and diagnosis don’t match
  • Services submitted with a modifier 22 appended
  • Any service submitted with modifier 66 appended
  • Previously denied claims that required preauthorization and for which no preauthorization is on file
  • Medicare risk adjustment services
  • Special investigations
  • ER services
  • HEDIS data collection
  • Verification of HCC diagnosis codes
  • Response to CMS risk adjustment data validation (RADV) reviews and audits

A comprehensive medical chart analysis would involve review of the following:

  • Actual services billed against physician orders
  • Surgery reports to find if the charges are too much
  • Medication administration reports to ensure that the prescribed medicines were administered, and that too in keeping with the physician prescribed dosage
  • Chemotherapy and radiation therapy procedures and audit
  • Each and every service to determine medical necessity/appropriateness
  • Treatments provided that are of an experimental or investigative nature
  • Aptness of pharmaceutical regime
  • Emergency room reports

Physicians employed by insurance companies and IROs to review medical claims will have to focus on the above areas. They can utilize medical review solutions provided by a reliable healthcare services outsourcing company.

Speaking of claims review, there has been an interesting development recently. The U.S. Government Accountability Office (GAO) released a report on May 13, 2016 on the review activities of various Medicare claim review contractors that CMS employs to help bring down improper reimbursements and protect the integrity of the Medicare program. The report stated that claim review programs could be improved with additional prepayment reviews and better data. This report put forth the following recommendations:

  • CMS should request legislation to allow the RAC (Recovery Audit Contractors) to conduct prepayment reviews
  • CMS should provide written guidance on calculating savings from prepayment reviews.

A bit about the context of this report – GAO was asked to scrutinize the review activities of various Medicare claim review contractors, and accordingly they examined the following:

  • Differences between pre- and post- payment reviews and the extent to which contractors use them
  • The extent to which claim review contractors focus their reviews on various types of claims
  • CMS’s cost per review and amount of improper payments identified by the claim review contractors per dollar paid by CMS.

Here are the findings of the GAO report.

  • MACs (Medicare Administrative Contractors) conduct prepayment and post-payment reviews
  • RACs (Recovery Audit Contractors) usually conduct post-payment reviews
  • The SMRC (Supplemental Medical Review Contractor) conducts post-payment reviews with regard to studies directed by CMS
  • CMS pays its contractors differently. The law requires CMS to pay RACs contingency fees from recovered overpayments. Other contractors are paid on the basis of cost.
  • The contractors focused their reviews on different types of claims.
  • Inpatient claims were the focus of RACs
  • MACs focused on DME (durable medical equipment)and physician claims
  • Focus of the SMRC’s claim reviews varied

Though the RACs’ focus on inpatient claims was in keeping with the financial incentives from their contingency fees, it was not consistent with CMS’s expectation that RACs review all types of claims.

The HHS (Health and Human Services) department disagreed with the first recommendation of the GAO, namely that CMS request legislation to allow RACs to conduct prepayment claim reviews. However, they agreed with the second recommendation that CMS provide written guidance on calculating savings from prepayment reviews.

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