HCFA turns to commercial software to verify claims

Provider compliance tool available

The Health Care Financing Administration (HFCA) in Baltimore has announced that an off-the-shelf software product is being used by Medicare contractors nationwide to check claims for improper coding.

HCFA awarded HBOC, a health care information systems vendor in Atlanta, a $20 million, two-year contract to allow Medicare contractors to install more than 200 computer "edits" from a portion of HBOC’s ClaimCheck automated clinical editing database onto their own claims processing systems. (Edits are computerized instructions that verify claims information.) In addition, HCFA says it may implement additional edits during the next two years.

"I am determined to use off-the-shelf products whenever possible and as quickly as feasible," says HCFA Administrator Nancy-Ann DeParle in a statement.

Providers can access the ClaimCheck database through HBOC’s Medicare medical necessity and prebilling compliance tool for providers, Pathways Compliance Advisor. According to an HBOC spokesperson, this tool is a slightly rewritten version of the database but still checks for the same information.

HFCA tested ClaimCheck’s edits during a pilot project in Iowa in 1996, which tried to improve the accuracy, consistency, and efficiency of Medicare claims processed through HCFA intermediaries and local carriers. HCFA determined the edits should be used by other Medicare contractors

Systems like ClaimCheck "make sense of the complex coding arena and offer good news for both payers and providers," says Jay Gilbertson, HBOC president, chief financial officer and co-chief operating officer. "By taking the guesswork out of coding, payers have the potential for large-dollar savings, and payer feedback helps providers make accurate coding choices on future claims."

The new edits are in addition to the more than 100,000 edits developed for HCFA under the system known as the Correct Coding Initiative, first implemented in 1996.

HCFA says the initiative is part of Medicare’s ongoing activities to detect and prevent inappropriate payments. Earlier this year, a General Accounting Office report had also urged HCFA to buy or lease existing comprehensive commercial claims auditing edits and begin a phased national implementation.1


1. Medicare HMO Institutional Payments: Improved HCFA Oversight, More Recent Cost Data Could Reduce Overpayments. HEHS-98-153.