Here’s what new prepay edits will look for

It’s hard to play a game if you don’t know the rules. Accordingly, providers are more likely to file clean claims if they know what is considered inappropriate. Here’s a laundry list of items that will likely generate a red flag if HCFA implements its plan to adopt prepayment editing software developed by Atlanta-based HBO & Company.

According to HCFA, HBOC ClaimCheck software will initially focus on:

- Procedure-to-procedure edits that search for claims that have been submitted for several procedures not normally performed together. Based on about 500 procedure-to-procedure edits that HCFA has already tested, the agency estimates an annual savings of $260 million.

- Diagnosis-to-procedure edits that target claims for procedures that are "unexpected" given the diagnosis. Based on 900 tested edits, HCFA estimates an annual savings of $205 million annually.

HCFA hopes to sign a contract soon with HBOC to give it enough time to have its ClaimCheck software installed in the computer systems of its Medicare Part B carriers and running by fall.

The agency already has spent two years working with HBOC’s edit software in a small pilot program in Iowa. Because of this experience — which did produce a higher-than-average number of denials of Medicare claims for lack of medical necessity and improper code combinations — the agency wants to award a sole-source contract rather than put the project out for competitive bidding, which could add as much as a year to the launch date.

"I’m committed to making use of off-the-shelf products whenever possible and as quickly as possible," says HCFA administrator Nancy-Ann Min DeParle.

However, if provider groups are not satisfied with the progress of negotiations on giving providers access to details of why the ClaimCheck edits denied their claims, they could use the threat of forcing an open, competitive biding process as leverage, sources close to the process say.

If HCFA does award HBOC the contract as expected, it’s likely that ClaimCheck will undergo some significant revisions to bring the system’s edits in line with Medicare policy. In fact, DeParle has said that without such revisions, the system "could significantly increase processing time and delay payment."

Besides seeing this as an effective way to reduce overpayments, HCFA is anxious to install this software because of the recent heat it has taken from both Congress and the General Accounting Office. The criticism resulted from HCFA’s resistance to buying commercial software over the past six years while trying unsuccessfully to develop its own in-house computerized edits.