Thinking like an auditor can speed your payments

Peek inside an auditor’s head

All health care claims, whether commercial or government, undergo the same basic reviews as they move through the payment cycle. Knowing what these steps are and what they involve can help your office avoid snags that could mean delays in payment — or worse, having your future claims automatically red-flagged for closer examination and possible audit. Here are the key steps in the process:

• Automated edits. As the first step in the audit process, carriers use automated methods to edit or quickly check claims for obvious inaccuracies or incomplete information that will kick the bill back to the provider to be cleaned up.

Warning: A pronounced pattern of extensive or similar "mistakes" can result in the computer automatically red-flagging claims from that provider for a more extensive audit. Depending on the kind of pattern identified, investigators might decide to look at all the claims submitted by the provider, focus on a certain kind of claim filed by that physician, or tag all the claims a provider has submitted for an individual beneficiary.

Here are some of the common technicalities that can result in your claim being denied in these first-level edits:

— provider or beneficiary identification number is wrong;
— patient has other insurance;
— procedure and the place of service do not match, i.e., hospital code is used for an office visit;
— procedure codes and diagnosis codes do not match;
— incomplete diagnosis codes;
— unbundling and billing separately for medical services that should be included as part of a global fee.

Carriers often compile this kind of automated edit information on each provider they deal with for periods from 18 months to four years long to see if the computers spot a particular pattern of questionable denials or a billing profile out of sync with other providers.

If a red light does go off, then auditors may pull your file to take a closer look at your billing history for questionable patterns or unusual claims that would justify an audit.

High on the list of suspicious activities investigators will want more information on are seemingly high claim volumes for a specific CPT code or kind of service. What looks to be a superhuman level of billing for one person during a given 24-hour period or work week for certain services and an individual patient also raise questions for claim examiners.

• Prepayment review. The next step in the audit food chain is the prepayment review, where the carrier sets aside certain types of claims by a particular provider for closer examination before payment. This also can involve a written request for the provider to produce more information about specific claims.

The good news here is that if you do not receive any further communications from the carrier fairly quickly, this probably means the carrier has found nothing and the claim is being paid. But if reviewers find what they feel is an intentional pattern of abuse, the case could be under consideration for a more detailed fraud and abuse investigation.

Develop your own provider profile

Commercial and Medicare payers keep detailed profiles of questionable claims submitted by each provider, so it makes sense that practices can use this same information to spot patterns and weaknesses in their own coding and billing operations.

One of the easiest and best ways to start accumulating this information is by tracking the reasons for denial cited on the Remittance Advice Notice from your Medicare contractor.

Based on data from the Health Care Financing Administration (HCFA), some of the leading reasons for denying claims are:

Poorly documented and/or outdated diagnosis codes.

To avoid unintentional mistakes, make sure your diagnosis codes have been updated. Physicians and staff, and even computers, should be tested on the use of codes, specifically on making them as complete and specific as possible.

The more details and documentation you have, the easier it is to avoid the classic denial of payment based on a conclusion that procedures do not appear to be medically justified based on the information presented to the claims examiner. If you have had problems with frequent denials based on questions of medical necessity, check with the carrier on its policies regarding coding for that particular set of problems. Also, check on what protocols the carrier considers appropriate regarding how often a service should be performed over a specific time period and alternate ways to treat that particular medical condition.

• Medicare is this beneficiary’s secondary payer.

One of HCFA’s new policing priorities when it comes to processing claims is to ensure it does not get stuck paying the bill for patients who also covered by private insurance. However, Medicare’s information about a beneficiary’s employment and third-party insurance status often is outdated. This makes it even more important that patient files be kept updated with patients’ most recent employment/retirement status and alternative coverage before submitting a claim. To avoid possible denials, you might consider asking patients to call Medicare and update their files on their own.

• Duplicative claims.

If you are receive a number of denials because these claims were duplicates of claims already being processed, first check your computer software and billing system for a glitch. Second, remember that it takes time for a claim to move through the system. It is best to wait at least 14 business days to resubmit an electronic claim, or 28 days for paper bills.

Coding miscues for services performed several times on the same date also can produce a duplicative claim denial. One way to avoid having your claim rejected is to log the procedure code only once, then enter the number of units provided in block 24G of the HCFA 1500.

• Incomplete or inaccurate physician ID and referral numbers.

A simple cross-check of your claims processing software will determine whether the various physician identification and referral numbers (PIN, UPIN) required by Medicare have been correctly logged for every physician in the practice. Also, remember that after hiring a new physician, you must submit the new physician’s group PIN before filing claims in the physician’s name.

Well-designed forms and office procedures will help eliminate the referral problem. For instance, patient registration forms should have a space to list the physician who referred the patient to the practice. Likewise, a similar line should be included on charge slips so the treating physician can note to whom the patient was referred. This information should automatically be logged into the patient’s computer file with a cross-check to ensure the data are complete and included on the claim.