Medical Review

NHIC, Corp.’s (NHIC) Medical Review Strategy has been developed to achieve the goal of the Centers for Medicare & Medicaid Services (CMS) Medical Review (MR) program to assure that the Medicare program makes payments only for covered, correctly coded services and to reduce payment error rate. Moreover, our strategy is to use education, proactively and retroactively, as the primary corrective action whenever possible.

NHIC, Corp.'s Medical Review (MR) Team is comprised of physicians, clinical nursing staff, and data & business analysts. MR team functions are diverse and support the Medicare Program operations in a variety of ways.

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Goal of the Medical Review Program

The goal of the Medical Review (MR) Program is to reduce payment error by identifying and addressing coverage, coding, or billing errors made by providers, through a variety of MR functions.

To achieve this goal MR will perform the following:

• Proactively identify potential billing errors concerning coverage and coding made by providers through proactive analysis of claims and appeals data and evaluation of other information.
• Take corrective action(s) to prevent and/or address identified error(s).
• Provide provider education.
• Educate the provider community of MR related finding and issues via the Medicare B Resource bulletin and this Web site.

A significant portion of this strategy focuses on prevention of errors, and seeks clinical and statistical approaches to identify incorrect billing patterns which contribute to incorrect processing of claims or program overpayments. To prevent claim payment errors a strong emphasis will be placed on individual provider education and education to providers within New England via the Medicare B Resource publication.

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Medical Review Functions and Activities

The primary functions of MR operations are described below:

Postpayment Medical Review

Postpayment medical review consists of validation of potential billing errors or claims payment errors after claims have been adjudicated by NHIC. There are two specific areas of postpayment review: Progressive Corrective Action (PCA) reviews and Statistical Sampling for Overpayment Estimation Reviews (SSR).

Progressive Corrective Action (PCA)

The Progressive Corrective Action Program was initiated by CMS in October 2000. The goal of the PCA program is to target incorrect billing patterns, educate providers, and correct issues identified in order to improve the accuracy of Medicare payments. CMS requires contractors to conduct a " probe review " of 20-40 claims to establish if claims are being billed in error.

NHIC will not exceed 40 claims when reviewing for a potential billing problem to ensure providers will not experience any administrative burden.

Data analysis techniques are used to determine if a pattern of code utilization, claim submission or payment indicates potential problems. Probe reviews may also be identified through referrals from the CMS, the Office of Inspector General, contractor alerts or NHIC operational areas.

Steps involved in the Probe Review Process

• Data analysis identification or confirmation of potential billing problem.
• Request for 20-40 medical records from billing provider.
• Copies of supporting medical records to be returned to NHIC within 30 days.
• Review of documentation and coding by NHIC Medical Staff or specialty consultant.
• Evaluate provider educational needs and develop Corrective Action Plan (CAP).
• Communicate probe review results to provider billing/group.
• Written notification contents:
  • Provider education
  • Detailed claim review results/rationale
  • Peer Comparison Reports
  • Educational reference materials
  • Expected improvements to documentation or future claims
  • Corrective Action Plan

Corrective Action Plans

CMS advises contractors to initiate specific corrective actions based on the severity of the issue(s) identified. Upon completion of the probe review a provider corrective action plan will be created, communicated and implemented. CMS expects providers to evaluate probe and SSR findings and implement changes to correct issues identified.

The following describes the types of corrective actions that could be initiated as a result of a probe review:

• Provider Education - Educational information and/or materials are provided with all probe review determinations.
• Provider Prepayment Claims Review - Requires provider to submit medical record documentation to NHIC for selected service(s) that require monitoring prior to reimbursement. Provider prepayment review allows NHIC to evaluate improvements to provider documentation and coding. It also provides an avenue for claims/documentation feedback directly to the provider.
• Statistical Sampling for Overpayment Estimation Review (SSR) - A statistical sampling for overpayment estimation is a medical review of a larger sample of claims from a provider that includes pulling a statistically valid random sample from the universe of beneficiaries that match the criteria being reviewed. In some situations a probe review case may require more comprehensive evaluation of services. Providers are notified if an SSR is required upon completion of the probe review.

Statistical Sampling for Overpayment Estimation Reviews (SSR)

NHIC conducts Statistical Sampling for Overpayment Estimation Reviews (SSR) reviews on physicians' services to evaluate provider claims which appear to warrant an in depth review to: 1) identify and validate problems regarding any unusual practice patterns, 2) verify that reimbursements are made only for those services which are considered to be medically necessary, 3) rule out over utilization or abuse of the Medicare Program.

The major steps in conducting statistical sampling are: (1) Selecting the physician or supplier; (2) Selecting the period to be reviewed; (3) Defining the universe, the sampling unit, and the sampling frame; (4) Designing the sampling plan and selecting the sample; (5) Reviewing each of the claims (or portions thereof), and determining if there was an overpayment, or, for administrative reviews, an underpayment; and, as applicable, (6) Estimating the overpayment.

SSR calculates and projects the amount of overpayments made on Part B claims. Statistical sampling is used to estimate overpayments made to physicians and suppliers as defined by CMS. CMS directs contractors to use statistical sampling to conserve resources of the Medicare program when reviews are performed on a large universe of claims. CMS states that in most cases it would not be administratively feasible, given the volume of records involved and the cost of retrieving and reviewing all the beneficiary records, for contractors to examine all individual claims for the period in question.

PrePayment Medical Review

The NHIC Prepayment Medical Review staff performs a variety of functions. Staff members are responsible for adjudication of complex claims that require clinical expertise in determining medical necessity. The primary function of the prepayment medical review team is to ensure that services suspended for review are both reasonable and necessary.

The prepayment staff is also a medical resource to other NHIC operational areas. Medical staff assists with issues relating to policy clarification, interpretation of medical necessity issues not covered by local or national policies, and contributes in the development of claims processing guidelines.

Selected Claim/Service Review

The prepayment staff also initiates claims review for specific claims and services either at random or selected samples. The MR staff will request supporting medical record documentation, and upon its receipt will evaluate and determine if services were reported and documented appropriately.

Provider Prepayment Review

MR prepayment staff also conducts claim reviews for providers or groups with identified billing problems that require monitoring prior to reimbursement. Providers may be placed on a prepayment review for a specific service or all services reported to Medicare. The level of review is dependent upon the nature of the problem identified.

Medical Review staff evaluates the necessary claims/services and supporting documentation to determine if services are being reported appropriately. MR staff monitors trends and changes to billing and documentation patterns and communicates review results to MR analysts or Provider Outreach and Education when feedback to a provider is required.

Corrective Action Plan Monitoring

NHIC will conduct periodic monitoring to evaluate providers who have been educated as a result of a PCA or SSR probe, or placed on provider prepayment review. The purpose of follow up monitoring is to determine if corrective actions have been initiated to address issues identified during the probe review.

Providers under provider prepayment claims review receive written notification of their progress which includes additional feedback and education. Providers under provider prepayment review are encouraged to review Remittance Advices carefully and contact Medicare customer service with questions regarding specific claim determinations. Providers are removed from prepayment review when follow up analysis demonstrates compliance with Medicare coverage and coding regulations.

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Educational News Articles

The goal of the NHIC Medical Review program is to reduce payment error by identifying and addressing billing errors concerning coverage and coding made by providers.  Medical Review has made a concerted effort to publish and promote awareness of probe review findings, coding, or documentation issues identified through the MR process in the Medicare B Resource.

For more information, please refer to the Educational Articles section.

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02/07/2008