Surprise! It's a Carrier Review!

(PYA Alert dated October 6, 2006)

A review of your coding and billing practices may be in the works by your carrier. Its important to understanding the carrier review processes and how a review may be triggered.

The first step is a Utilization Review where your carrier compares your coding patterns with same specialty practices. A “bell curve” of your coding types, levels and frequency of services is plotted and placed on a graph with a bell curve of your peer group. Sometimes, these reviews may prompt a letter from your carrier informing you of their findings and providing educational information regarding code assignment.

However, when the differences are severe, your carrier may generate a request for twenty-five or more records for a specific service or level of evaluation and management (E/M) service for review. This type of Probe Review may escalate into a request for a larger sample to determine if an overpayment was made and if any repayment is due to your carrier.

If your carrier finds problems, in addition to recoupment of monies paid, a Mandatory Pre-payment Review may be imposed. During a specified period of time, all claims submitted for payment for a certain type or level of service must be accompanied by supporting documentation. This type of review may last six months or longer.

A review of services by your carrier may be the result of a Random Audit. These are usually triggered by programs such as:

• Comprehensive Error Rate Testing (CERT)

The CERT program measures the error rate for claims submitted to Carriers, Durable Medical Equipment Regional Carriers (DMERCs), and Fiscal Intermediaries (FIs). CMS calculates the Medicare Fee-For-Service error rate and estimate of improper claim payments using a methodology the OIG approved. The CERT methodology includes:

• Randomly selecting a sample of approximately 120,000 submitted claims
• Requesting medical records from providers who submitted the claims
• Reviewing the claims and medical records for compliance with Medicare coverage, coding and billing rules

• Recovery Audit Contractors (RAC)

CMS provides the following overview of the RAC process:

The RACs will receive a data file from CMS containing National Claims History (NCH) data about claims that have been processed by the affiliated AC in the appropriate state based on the RAC contract. The RACs will receive a data file updating the NCH data on a monthly basis. Non-Medicare Secondary Payer (MSP) RACs will analyze this data to identify underpayments and overpayments. The RAC will enter individual claim information into the RAC Database for each claim that contains an overpayment or suspected overpayment. Assuming the claim has not been suppressed because of an ongoing post payment medical review investigation, an ongoing fraud or benefit integrity investigation or a potential criminal investigation, or inclusion in the CERT sample, the RAC will continue with the identification and recoupment process.

• Office of the Inspector General (OIG)

The OIG plans, conducts and participates in a variety of interagency cooperative projects and undertakings relating to fraud and abuse with the Department of Justice (DOJ), the Centers for Medicare & Medicaid Services (CMS) and other governmental agencies, and is responsible for the reporting and legislative and regulatory review functions required by the Inspector General Act.

• Re-review of claims to determine if previous problematic coding issues have been addressed and resolved by your providers.

What’s a practice to do?

Take steps to minimize your risk in the event of a review. An effective internal compliance program is necessary to monitor coding and billing practices and to assess appropriate medical record documentation. Your program should:

• Identify potential areas of risk with coding patterns and billing practices.
• Develop an internal chart review process with follow-up educational sessions for providers and staff.
• Review all coding changes and document supporting authoritative resources for coding and billing services.
• Arrange for a review of your compliance program and documentation by an external auditor.
• Provide on-going education for your staff and providers with coding and billing text books and outside seminars.
• Encourage open communication within your office for reporting and responding to coding and billing compliance concerns.

For more information, please contact Maggie Mac at (800) 270-9629.

The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only.  Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.

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