Billing Disputes with Managed Care Organizationsby Scott Einiger, Esq.

Billing Disputes With Managed Care Organizations–How To Avoid Scrutiny

I. INTRODUCTION
As most physicians know, governmental agencies have heightened scrutiny and emphasis on health care fraud and abuse. The Health Care Financing Administration (HCFA) has instructed Medicare carriers to focus their efforts on where there may be significant, potential abuse. Additionally, commercial “for profit” insurance carriers are actively seeking ways to contain costs and reduce payment to providers in this managed care environment.
Needless to say, these efforts surround services that insurance carriers may deem to be excessive, non-covered and/or medically unnecessary and the carrier accomplishes this task through utilization of claims data. Data obtained is analyzed and compared against both local and national claims data, looking for and identifying any possible patterns or aberrancies in terms of CPT codes submitted.

The insurance carriers review, typically look at the most commonly performed procedures for your practice and/or specialty based on the number of charges or number of services rendered. In an ongoing effort to focus and address compliance in your practice, it is recommended that a check be done regularly (e.g., monthly, semi monthly, quarterly, and/or annually) and compare the physicians utilization patterns, as well as the entire practice’s patterns against this local data.

By performing this exercise and monitoring, your practice, you will be in a better position to identify any areas that may possibly be viewed as potential aberrancies within the practice’s data. This can then prompt an investigation of these patterns further by comparing medical record documentation to determine if the services have been coded according to the documentation present.

Generally, the result of this activity prepares you to determine any necessary corrective action plans, which often result in increasing physician and staff awareness and education on coding and documentation as well as increased/implementation of quality assurance checks on any coding personnel.

Today, many multi-specialty groups have or are in the process of planning and/or implementing a comprehensive billing compliance plan as part of their overall corporate compliance initiatives. Typically, these types of billing compliance plans require that billing trends and patterns be reviewed regularly and that medical record documentation be assessed to determine and verify coding and documentation accuracy.

Once a carrier has determined that group or individual provider has an unusual billing pattern, an expanded investigation is warranted. Most carriers will then select a relatively small sample of claims at random from all claims submitted during a particular period. At that point, documentation will be requested from the physicians to determine whether or not the documentation supports the service to be billed. In these instances, the physician will be required to respond with any supporting and complete documentation typically within 45 days of the request.
( Special Note: In the event that you receive a request for refund from the carrier without any details supporting their request for refund, you should demand a specific accounting in writing of the patients and services involved in the carriers audit/refund request prior to undertaking any dialogue or settlement negotiation with the carrier.)
Many medical societies have peer review and ombudsman programs to assist you in reviewing your billing and coding practices with medical and billing experts to guide you along the way.

For those claims that are included in this payment review, a final determination should not be made until all documentation is received and reviewed.

The carrier should then contact you in writing within a reasonable amount of time to notify you of their final review determination. 1 If not provided, physicians should request a detailed breakdown of the points that the carrier still feels is owed.

In the event that the physician still feels that the carrier determination is still inappropriate, the physician should be aware of the appeals mechanism at the carrier and should avail themselves of a formal appeal.

If after the appeal, the physician feels that the determination is being made in bad faith, without rational criteria being applied, or as a harassing tactic, its is recommended that the Office of the Attorney General and the State Insurance Department be apprised in writing of the specifics issues under review.
Given all of the above criteria, one must ensure that all physicians are aware and understand not only the requirements but also the consequences of noncompliance.

There is a need to be proactive with education and monitoring of services now more than ever. If your physician group practice does not have a plan in place for conducting these activities, it is highly recommended that you revisit these issues and obtain support and authorization to do so.

Most carriers and regulatory arms of the federal government are targeting their efforts on compliance, audit, and recoupment with an emphasis o the following coding particulars:

• Medical necessity issues
• Allegations of procedures not being performed
• Incident To services
• Procedures purposely not covered under carrier policy (experimental or elective procedures)
• Coding accuracy of physician/patient encounters (Evaluation & Management)
• Utilization of modifier 25 (Medical care & procedure – same day)
• Correct Coding Initiatives (Bundling)
• Diagnosis code utilization by physicians and other providers
• Billing services

COMPLIANCE PROGRAM ELEMENTS
At a minimum, comprehensive risk management and compliance programs should include the following seven elements to avoid the untoward scrutiny of the insurance carriers that you participate with:

• the procurement and distribution of written policies and procedures that outline the carrier’s particulars for claims submissions, and applicable coverage policy and that address specific areas such as claims development and submission processes, code gaming, and that this information be distributed to key office personnel responsible for claims and billing procedures as well as the physician and other health care professionals providing services.
• the designation of a chief compliance officer (i.e. the Office or Billing Manager) charged with the responsibility of operating and monitoring the compliance program to insure that the individuals responsible will be adhering to standards of the carrier. (Note: There are different standards for each carrier so it is important that one staffer be assigned the critical task of monitoring the particulars of each plan).
• the development and implementation of regular, effective education and training programs to update all affected employees to the changing rules;
• the regular use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem areas on an ongoing basis; and
• the development of a system to respond to allegations of improper/illegal activitiesand the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or federal health care program requirements;
• the investigation and remediation of identified systemic problems and the development of policies addressing the non-employment or retention of sanctioned individuals.
• the development of a system to respond to insurance carrier inquiries regarding allegations of improper claim submissions and/or requests for refunds (i.e. designating a formal contact person and notifying other employees not to discuss cases under review and not to address any inquiries from carrier personnel without proper clearance.
• the maintenance of a process, such as a hotline, to receive complaints, and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation;

1 As of July 1999, New York State has created an external review process for patients and physicians to review certain adverse decisions by managed care plans by an independent review body.