HCFA will change some claim review procedures
HCFA will change some claim review procedures
AMA wins partial victory
The Health Care Financing Administration (HCFA) has agreed to institute several long-sought changes in its claim review and auditing procedures. The changes, worked out after negotiations with the American Medical Association (AMA), were spelled out in a letter from HCFA administrator Nancy-Ann DeParle to the AMA.
These changes are the first victories in what AMA executive vice president E. Ratcliffe Andersen Jr., MD, called a new "intensive campaign to refocus fraud and abuse enforcement efforts so that honest, law-abiding physicians are not coerced into paying huge financial penalties for inadvertent billing errors."
In a Nov. 2, 1998, letter to DeParle, and in meetings with staff from HCFA’s Office of Program Integrity, the AMA said it was worried that "the federal government and Medicare carriers are beginning to focus their enforcement efforts on unintentional billing errors, and that many of the government’s current efforts to address fraud and abuse are heavy-handed."
While saying the AMA has "zero tolerance for true fraud," the AMA letter said "federal officials and Medicare carriers are, in fact, focusing on unintentional billing errors" and many of their related antifraud enforcement actions "are unnecessarily heavy-handed."
Prepayment screens delay payments
Of special concern to the AMA are HCFA policies dealing with prepayment reviews and screens and post-payment audits. The AMA is concerned about prepayment screens because after a carrier conducts a post-payment audit and determines there has been an overpayment, it often instructs its computer to pull and screen any future claims submitted by that provider that involve the codes in question.
The AMA argued this practice places a hardship on many physicians by holding up their payments while these claims are being reviewed. Adding to the problem is the fact there is no time limit on how long carriers can take to review the claim. The AMA has lobbied to require carriers to immediately discontinue prepayment screens once physicians show they are making a good-faith effort to file correctly.
"We agree that carriers should discontinue pre-payment screens/edits when billing patterns change and physicians come into compliance," DeParle wrote the AMA. She said HCFA will instruct carriers to change prepayment screening policies accordingly.
The AMA said letters from carriers requesting additional documentation often fail to clearly communicate the necessity of responding to these letters if physicians are to get paid. HCFA said it will work with the AMA to develop a model sample letter for use in such circumstances. HCFA also said it will work on developing a program to educate physicians about the purpose and importance of these prepayment review letters.
The AMA also voiced concerns about post-payment refund demand letters. The AMA said the 30-day time limit physicians currently have to respond to letters from HCFA demanding it be reimbursed for an overpayment is "woefully insufficient" for a provider to seek counsel and decide how to respond. HCFA agreed, and is preparing new instructions telling contractors to give physicians 60 days to respond to consent settlements.
Despite these changes, there remain several outstanding areas of conflict where HCFA and the AMA could not reach agreement.
The AMA, for instance, questioned the benefit of conducting prepayment reviews of evaluation and management (E/M) services. Instead, the AMA wants HCFA to focus its attention on those "outliers" it already has been able to document rather than conducting random prepayment claim reviews.
"HCFA has assured the AMA time and time again that the agency is focused on substantive disputes and not on coding differences of one level," wrote the AMA. "This is not what we are seeing from Medicare carriers and physicians across the country. Frequently, the carriers are focusing on coding differences of only one level. Reasonable people can certainly disagree regarding such nuances. A more prudent use of HCFA’s resources would be for the agency to concentrate on the outlier."
Contributing to the AMA’s concern are situations where physician E/M claims have been rejected and downcoded on a prepayment review basis for not having enough documentation to support the higher levels. However, when some physicians have challenged the decision, also sending along a copy of the 1997 E/M guidelines, the carrier has changed its mind and approved the original claims.
Citing the fact a 1997 audit of Medicare payments found physician services accounted for 29% of an estimated $23.2 billion in improper payments, DeParle told the AMA: "HCFA must take strong, aggressive actions to reduce inappropriate payments. Such actions include increasing the proportion and effectiveness of medical reviews, including reviews conducted on a random basis."
According to DeParle, HCFA must retain random claim reviews because:
— Payment errors are spread throughout the system and cannot be attributed solely to outlier providers.
— Random review provides a more general picture of where errors are occurring, permitting HCFA to formulate and target its education efforts and guidance, as well as to point its review resources in new directions.
— Random medical review is the only way HCFA can guarantee that any individual claim submitted to Medicare has a chance of being scrutinized. That lets providers know it is possible that any claim could be reviewed by agency auditors. "Random review creates broad awareness of the need for accurate claims submission and imposes an overall discipline on the system," said DeParle.
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