Successfully Navigating Prepayment Reviews
Prepayment review, or the process by which a health insurer reviews a provider’s medical claims before reimbursing the provider for his services, can be a financially devastating experience. For this reason, it is crucial to address these reviews promptly and effectively, and to understand the reasons that such reviews are triggered.
Both private healthcare insurers and CMS contractors, including Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), and Unified Program Integrity Contractors (UPICs), can place a healthcare provider or supplier on prepayment review. [1] A private insurer or a CMS contractor can place a provider or supplier for a variety of irregular billing practices, including, but not limited to:
Prior improper medical claims and payments. For example, the provider has a pattern of submitting claims which do not support the level of services billed or the diagnosis code used, the provider or supplier submits numerous duplicate claims, and/or the medical documentation does not show that the provided goods or services were medically necessary.
A substantial deviation in billing patterns as compared to similar providers or suppliers within the same geographic area. For example, a finding that a provider in Albany, New York bills significantly more high-level E/M services than other similar providers in that area.
Third-party or employee allegations that the provider or supplier engaged in fraud, waste, or abuse.
A low accuracy rating,[2] as determined by the percentage of total claims which are denied.
A provider who is placed on prepayment review is required to submit supplementary medical documentation when filing any subsequent claims for payment. In addition, the provider must comply with any additional requests for documentation (ADRs) which it receives from the private insurer or CMS contractor after submitting the initial claim. To make matters worse, the provider who is placed on prepayment review is not paid for his services until the auditor determines that the associated claims comply with relevant coding and billing requirements— a so-called “clean claim.”
Given that the review process for each submitted claim can take up to several months to complete, a provider who is placed on prepayment revenue can lose the critical revenue to remain in business. Furthermore, the provider or healthcare entity cannot be removed from prepayment review until it achieves a certain claim acceptance rate (typically, the auditor must approve 75% of the claims) for several consecutive months.[3] Given the length of time that is required for the provider or entity to satisfy this criterion, prepayment reviews can span for over a year, further depriving the provider or entity of vital financial resources.
For these reasons, time is of the essence for providers and healthcare entities that have been placed on prepayment review. The provider must promptly identify the reasons for the prepayment review and verify that they were not based on incomplete, incorrect, or subjective information.[4] If the provider was improperly placed on prepayment review, the provider should promptly dispute the merits of the findings and provide a well-supported argument to the contrary. If the basis for the review was proper, the provider must identify and fix the issues which triggered the review to ensure that they are not repeated in future claim submissions. To this end, the provider must resolve any shortcomings within the practice’s billing, coding, documentation protocols, and appropriately train and educate its staff.
At Bull Owen Law, we use our expertise to promptly remove providers from prepayment review and negotiate favorable resolutions. We also help providers to create customized compliance plans to avoid future claim denials and prepayment reviews.
The prepayment review process for Medicare claims. Photo courtesy of AAPC.
[1]Most private commercial insurers, including Blue Cross Blue Shield, Anthem, and United HealthCare Group conduct prepayment reviews.
[2] A healthcare provider can be placed on prepayment review if a certain percentage of its submitted medical claims are denied.
[3] Usually, the prepayment reviewer requires the provider or supplier to obtain a claim acceptance rate of 70% or greater for several consecutive months.
[4] For example, a Medicare contractor can incorrectly conclude that a provider has a low accuracy rating based on a sample of improperly denied medical claims.
