Can Prepay Reviews Save Millions?
Ceris is a Fort Worth, Texas-based claims payment solutions company. Johnson discusses the process of prepay reviews for healthcare claims and the importance of proactively avoiding overpayments instead of attempting clawbacks from providers.
When you are talking about getting money back from providers, the biggest challenge is not necessarily getting the provider to agree there was an incorrect bill but to issue a refund check. They tend not to want to give up money when they have been paid for services, which makes sense.
Also, the insurance industry fails to remember that not all providers they pay are participating in-network. If you are a nonparticipating provider, you may not have a lot of patients you see for a particular insurance company. The payer is often unable to recoup those overpayments because there just isn’t enough spend there to make the provider care about sending money back.
The provider doesn’t really have to comply with anything at that point; they have been paid for services and are just going to move on. Also, payers and clients often have a different appetite for how much they are going to pursue legally. Payers aren’t necessarily going to pursue small dollars.
Hospital claims tend to have more errors, and the more complex the claims are, the more errors you tend to find. The most common we tend to find are hospital charges that are not separately reimbursable.
For instance, a patient is hospitalized, and they need to spend the night in the ICU. That ICU is going to have oxygen on the wall and other material equipment in that room. Oxygen and the equipment are not separately reimbursable; the cost of the ICU should cover all of that. But some billing departments bill for oxygen, tubing, equipment, etc. That’s what we identify and understand is being overbilled. We use artificial intelligence [AI] to see that is not a separate reimbursable claim. The same errors occur with prepayment and post-payment; it’s just a matter of paying it and chasing it or fixing it on the front end with prepayment reviews.
What we’ve really been seeing a lot of over the past three years is added charges related to respiratory care, and that’s a direct function of COVID-19. We are seeing a lot of respiratory charges on bills that are not separately reimbursable. Hospitals are charging for different types of ventilators that should be included in a diagnosis and episode of care. Depending on how they are reimbursed, a provider could be expecting payment for services rendered and then adding on charges for ventilator management and a respiratory therapist, which shouldn’t be reimbursable. But that is payer- and provider-specific.
Another very common example, especially in the post-payment space, is duplicate payments. Providers are allowed to send in corrected bills to correct a previously submitted claim to payers. If that is not processed correctly, the payer could end up sending in a duplicate payment. That alone could be billions annually. The payer can miss those and process the claim as an original one. There is just inherent waste throughout the process; sometimes it’s human error, and sometimes technology doesn’t catch it.
We wouldn’t be able to stop every claim and process it for review; there are just too many. So we work with each client to set thresholds on what they want to review. It depends on the audit being performed.
We work with a payer after claims have gone through a number of steps in the processing unit. Insurers send us a claim, and we get an itemization and do the work and send it back to them. Then, they ingest the information and send the payment to the provider based on what was disallowed and tell them why. Some of our clients are on referral; they refer certain claims to send to us. In some situations, there are providers that have contractual arrangements to not allow prepay review. It is rare, but it does occur.