March 28, 2016

Revenue Cycle 7: Testing Claims for Accuracy

Receiving an overpayment might seem like Christmas come early. Unfortunately, the extra money isn’t a gift — it must be refunded to the payer. To further enforce this sentiment, the Centers for Medicare & Medicaid Services (CMS) has published a final rule that requires Medicare Parts A and B healthcare… Read More

Receiving an overpayment might seem like Christmas come early. Unfortunately, the extra money isn’t a gift — it must be refunded to the payer. To further enforce this sentiment, the Centers for Medicare & Medicaid Services (CMS) has published a final rule that requires Medicare Parts A and B healthcare providers and suppliers to report and return overpayments by the later of 60 days after an overpayment was identified or the date on which any corresponding cost report is due, if applicable. Previously, a similar final rule was published to cover Parts C and D overpayments.
One report estimates that the healthcare industry loses $275 billion annually to waste, fraud and other issues related to claims accuracy and administration. That’s because inaccuracies don’t just result in time and money lost on overpayments — they also lead to “underpayments, delays in payments, and the misallocation of responsibilities between various payment systems.”

However, in order to report and return overpayments — and avoid underpayments and delays — you have to be checking your claims and payments for accuracy in the first place. Here are some strategies for building or enhancing your system for monitoring accuracy.

1. Start with clean, verified code

Your coders need to have encyclopedic recall of the new ICD-10 alphanumeric categories, as well as the new chapters, titles and condition groupings. And the category alone is not enough — the right level of detail, often requiring more than three characters, must be used to ensure a valid code. Given all these requirements, wouldn’t it be helpful if the coders could consult on the information needed at the point of the patient contact? Real-time coding, performed at the point of service by providers fully trained in and facile with ICD-10, can help ensure the right level of detail is recorded, to guide your back-office coding and billing staff in creating valid codes and submitting clean claims. This level of accuracy will in turn avoid receipt of overpayments, underpayments and payment delays.

2. Implement quality checks before submission

As you seek to minimize payment issues, it’s a good idea to undertake quality checks before submission. Team your coders to perform code reviews for each other — checking the documentation against the codes that have been generated, and flagging any questions or issues, so that modifications are made before submission of accurate codes. You don’t have to do it on every claim, but a sampling that makes sense for your practice or facility should be quality-checked each day. Further, to make this strategy work, you’ll need information to verify the case history and the medical need for the procedure or service, the procedure documentation, and the patient’s medical and medication history. Carriers may require this depth of documentation later — particularly if a payment issue arises — so it should be in place as part of quality checks. Using medical scribes to ensure thorough records of the patient visits and treatment plan can help clear up issues before claim submission and avert payment issues after the fact.

3. Perform regular audits

This means even when you haven’t had any flags from your EHR or coding and billing systems. Ideally, audits should be performed quarterly, and CMS recommends that audits be carried out by “disinterested parties, such as people from other departments,” to ensure there is no bias in how findings are handled. Claims submission audits should review bills and medical records “for compliance with applicable coding, billing, and documentation requirements,” with involvement from someone with back-office knowledge, and someone with clinical training. However you choose to approach audits, these three key tasks should be incorporated:

  • Determining the sample group. The recommendation is 5–10 claims for each type of provider, procedure, period of time, or other areas of analytical interest. High-volume practices and hospitals should audit more than 10 but, for small practices, 5 for each type should be audited quarterly.
  • Choosing claims to test. “While claims can be chosen judgmentally, random sampling enables the auditor to project error rates and improper payment amounts to the relevant population,” says CMS. “Regardless of the claims sampling method, it is best if those involved in the delivery or administration of the sampled item not select them for audit.”
  • Knowing what to look for. In general, you should be looking for availability of documentation, adequacy of documentation, acceptability of documentation, appropriateness of service and accuracy of payment. If the audit team sees trends in any of these areas — for example, inappropriate services being rendered although correctly paid (which could trigger fraud investigations in the future), or appropriate services with overpayments — that should be a flag to drill down and find root causes. Overpaid services may be upcoded, unbundled, fragmented (and more), all of which should be addressed where they happen.

What to do if you spot inaccuracies

CMS’s final rule dictates that providers must report and return overpayments that have occurred within the last 6 years. You have 60 days from the date of discovery of an overpayment to use an applicable claims adjustment, credit balance, self‑reported refund, or another appropriate process to satisfy the obligation to report and return overpayments. The rule also provides that if a healthcare provider has reported a self-identified overpayment to either the Self-Referral Disclosure Protocol managed by CMS or the Self-Disclosure Protocol managed by the Office of the Inspector General (OIG), the provider or supplier is considered to be in compliance with the provisions of this rule as long as they are actively engaged in the respective protocol. Don’t forget to document the audit activities to help demonstrate a commitment to compliance. If you are caught out for not reporting overpayments, being able to demonstrate your due diligence can go a long way towards making the difference between leniency and sanctions.