October 2000
Volume 64 |
Number 10
|
| |
PRACTICE MANAGEMENT
|
| When Medicare
Carriers Suspect a Problem: 'Medical Review' |
Karen Bierstein, Practice Management Coordinator
Medicare carriers monitor the claims
that they process through a data collection and screening program
known as medical review. The purpose of this monitoring is to
identify potential abuses such as overutilization and upcoding
by matching claims against a series of screens developed by studying
average practice patterns. The screens include billing for excessive
numbers of consultations or comprehensive physical examinations
when compared to norms for the same specialty, billing separately
for cystoscopies and other endoscopies performed on the same day
and same patient, and other aberrations that can be readily flagged
by a computer program.
Claims that are flagged may be subjected to either prepayment
or postpayment review. Both types of review will help to identify
both general problem areas requiring education and perhaps the
development of new policies, and specific physicians who appear
to be abusing the system. A physician who has been overpaid will
be asked for a refund. If the carrier detects fraud, i.e., an
intentional or reckless submission of improper claims, the case
will be referred to the carrier’s fraud unit or the Department
of Health and Human Services Office of the Inspector General.
If the problems do not represent an intentional effort to overbill
or defraud Medicare, the carrier will undertake any of a number
of possible progressive corrective actions to stop the abuse or
overuse. The carrier may start auditing some or all of the future
claims submitted by a physician under suspicion. The physician
may be selected for comprehensive medical review because he or
she submits claims that match Medicare's alert list or exhibits
any other abnormal pattern of practice. Note that Medicare requires
each carrier to put at least 15 doctors per 2,000 physicians actively
practicing in the area into comprehensive medical review each
year. Once a physician is in such a review, there is a presumption
that a corrective action plan will begin within a year.
The heavy-handed manner in which some carriers have implemented
medical review, along with the apparent arbitrariness of their
procedures, have elicited much criticism from organized medicine.
In response, the Health Care Financing Administration (HCFA) has
issued a Program Memorandum giving its carriers guidance on the
use of medical review. The effective date of the Program Memorandum
is October 1, 2000.
The gist of the new guidance is that carriers must be more discriminating
in their identification of problems and selection of remedies.
They must also do a better job of educating physicians individually
and as a community. Figure 1
explains the carrier' responsibilities. In particular, it shows
the approved range of remedial actions for specific levels of
error.
Key points of the Program Memorandum are as follows:
• A carrier's decision to conduct medical review should
be data-driven. Currently, a carrier may act on the basis of anonymous
complaints, newspaper articles and other similar sources of information.
It must now take the interim step of selecting a small probe sample
of potential problem claims to validate the hypothesis of billing
errors.
• Medical review should be no more extensive than is necessary
to address the nature and extent of the identified problem (i.e.,
a small level of noncompliance does not merit a 100-percent prepay
review). Error rate is important in deciding how to address problems,
and it should be calculated after netting out the dollar amount
of charges underbilled. The Program Memorandum includes hypothetical
vignettes illustrating proportional administrative corrective
actions:
1. Twenty claims are reviewed. One claim is denied
because a physician signature is lacking on the plan of care.
The denial reflects 7 percent of the dollar amount of claims reviewed.
Judicious use of medical review resources indicates no further
review is necessary at this time. Data analysis will determine
where medical review activities should be targeted in the future.
2. Forty claims are reviewed. Twenty claims are for
services determined to be not reasonable and necessary. These
denials reflect 50 percent of the dollar amount of claims reviewed.
One-hundred percent prepayment review is initiated due to the
high number of claims denied and the high dollar amount denied.
3. Forty claims are reviewed. Thirty-five claims are denied.
These denials reflect 70 percent of the dollar amount of claims
reviewed. Payment suspension is initiated due to the high denial
percentage and the Medicare dollars at risk.
4. Forty claims are reviewed. Thirty-three claims are denied.
These denials reflect 25 percent of the dollar amount of the claims
reviewed. The contractor provides feedback to the provider about
specific errors made and educates the provider on the correct
way to bill. The contractor initiates a moderate amount (e.g.,
30 percent) of prepayment medical review to ensure proper billing.
- Carriers should consider the past history of physicians’ billing
errors as well as their willingness to address the problems.
- Physician education and feedback is essential to solve both
individual physician or widespread billing problems. If the
billing problem is widespread, the carrier must work with the
specialty and state medical societies on educational efforts.
- Carriers must provide comparative data to the physician about
how the physician varies from other physicians in the same specialty
area or payment locality.
- Carriers must remove a physician from medical review as soon
as possible when the physician demonstrates compliance with
Medicare billing requirements.
- Carriers must send written notification to all physicians
when they are placed on medical review and removed from medical
review.
- The carrier must make a reasonable effort to accommodate a
physician's request for a meeting.
- If a carrier must contact a physician as a result of more
than one problem, the carrier must ensure that its contacts
are necessary, timely and appropriate, and not redundant.
- HCFA does not consider it an efficient use of medical review
resources to deny claims that are routinely appealed and reversed.
Therefore, carriers must consider the Administrative Law Judge
reversal rate in deciding whether or not to implement medical
review.
Will this Program Memorandum work to make carriers' corrective
actions seem less arbitrary? The American Medical Association,
which pressed HCFA vigorously for the change, will be evaluating
implementation of the new procedures that must be in place no
later than January 1, 2001. If your practice is targeted for administrative
action in a way that appears to contravene the directives to the
carriers, please contact the ASA Washington Office.
Speaking of Fraud: Antifraud Programs Save Millions for Private
Insurers
The Health Insurance Association
of America (HIAA) recently released the results of a survey of
the private health insurance industry's antifraud activity for
1998. The survey showed that responding insurers saved about $11
for every dollar spent on antifraud programs, with combined total
savings equaling $232 million.
The HIAA study suggested that physicians were frequently implicated
in fraud investigations, but it is also clear that organized crime
has shifted into health care fraud. The most common type of fraud
was billing for services not rendered. Physicians may bill for
a single procedure that never took place; criminal entrepreneurs
establish schemes to steal great quantities of Medicare, Medicaid
and private health insurance information to bill for procedures
and services that were never performed.
The insurers' antifraud measures include: employee training programs;
encouragement of consumer tips and complaints, particularly through
the use of hotlines; information sharing (searching a database
to see if a suspicious provider is already under investigation);
and use of fraud detection software.
With an increase in the number of cases investigated from 15,000
in 1996 to 42,000 in 1998, it is clear that attention to the accuracy
and appropriateness of claims submitted to private insurers should
be a part of anesthesiologists’ compliance programs.
return to top |