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Reducing Medical Billing Waste and Abuse

MultiPlan

11/13/2018

With a backlog of 687,000 recovery audit appeals and a federal mandate to clear them by 2020, the Centers for Medicare and Medicaid Services must enhance its ability to identify and correct billing errors prior to payment – as would payers of any health plan. But depending largely on automation, pre-payment integrity programs either leave significant errors on the table or miss critical opportunities to effectively educate providers and change their behavior.

MultiPlan’s analysis of hundreds of millions of paid commercial claims from a variety of payers has shown that, even after the sophisticated editing, and often secondary editing processes employed by these payers, MultiPlan’s Probe Audit Risk System (PARS) still identifies significant opportunities for savings through removal of charges billed. Only about 30% of these are National Correct Coding Initiative edits missed by the payers’ systems. The vast majority are overpayments from, intentionally or unintentionally, exploited loopholes not easily addressed in standardized coding approaches.

 

The Study

Hypothesis

PARS comprises a powerful analytics engine with rules covering more than 200 million code combinations across 90 service areas. Importantly, it also drives an accelerated expert review process – a critical “pause” between analysis and payment. This step ensures that less straightforward errors suggestive of waste or abuse, and potentially even fraud, can be confirmed by physicians, nurses and medical coders – sometimes with the provider directly – before a determination is made.

This review process, and the technological support, allows both a deeper dive into the claims data and a more provider-considerate means of resolving the issues found. MultiPlan conducted a study of paid commercial claims to quantify the benefits of this engineered pause and review. 

 

Analysis

Using PARS, MultiPlan analyzed 12.2 million in- and out-of-network claims incurred during a recent three-year period across five health plans, including Blues and self-insured plans managed by TPAs. Table 1 illustrates key statistics of the dataset.

 

Table 1: Summary of CMS Medicare Data Analyzed

 Claims analyzed  12.2 million
 Paid dollars analyzed  $3.4 billion
 Claim Mix 10% outpatient
90% professional
 Plan edits run 67% of claims

The analysis focused on billing errors that could be resolved quickly enough to be completed before payment:

  • Issues identified with high confidence via automation
  • Issues that could be reviewed by a clinician or coding expert within 24-48 hours
  • Issues that would need only limited outreach to, or documentation from, the provider
Savings were also modeled for claims with suspect issues that would require confirmation via review of full medical records or other documentation, and for claims where the best resolution would be to hold a discussion with the provider and obtain their consent.

Findings

The results of the analysis suggest an estimated 2 -3% of claims contain issues that can be automatically detected. Less than 2% of claims would require a review of medical records or provider discussion. Another 1 -6% of claims have issues that require additional expert review our program supports.

Program Overview

MultiPlan’s PARS platform translates clinical and coding guidance into systemized rules called “factors,” automatically adds digestible explanations and citations, and then routes the analyzed claims as appropriate for further review, resolution and service. This ensures that any errors identified can be quickly and accurately understood, addressed, and supported throughout the process. There are four layers to the process.

Technology Layer 

MultiPlan’s analytic factors enable the program to perform well beyond the level of standard claim editing.  Table 2 illustrates the difference between edits and factors with a three-line claim totaling $5,040 in allowed dollars after network pricing.

Table 2: Sample Claim

CPT Description  Allowed
01935 Anesthesia for Image Guided Procedures on the Spine  $4,320
64494 Paravertebral Facet Joint Injections with Image Guidance  $270
77003-59 Fluoroscopic Guidance for Spine Injection  $450

 

Standard editing would, potentially, identify $450 as an error because industry standards bundle fluoroscopic guidance into the facet joint injection. However, the presence of modifier 59 would usually lead to an override of the edit.

MultiPlan factors reach beyond the information included on the claim to identify two important additional findings, increasing potential waste/abuse avoidance to $4,770:

  • The modifier 59 override would rarely be appropriate because no supporting procedure was found for same member/date.
  • Anesthesia is reported less than 1% of the time with spinal pain injections, but this provider reported it 80% of the time on 44 claims in the last year.

 

Factors incorporate rules that fall into four categories:

  • Industry-sourced, from medical societies, medical coding publications, health plan publically available policies, and Medicare national/local coverage determination rules
  • Industry-standard edits and adjustments
  • Pattern recognition and outlier rules – cross-claim rules to identify repeat offenders and outlier provider/member behavior
  • NCCI published edits expanded from 3 million CPT code pairs to 115 million code combinations that allow for modifiers, diagnoses, place of service, etc.

 

The payer’s entry point to this service is typically after all other claims adjudication steps have been completed, and just before payment. Thus, for more common rules like NCCI and industry-standard edits, PARS acts as a safety net to address leakage in the payer’s primary editing functions. These claims with errors identified by these common rules accounted for about 20% of the paid claims analyzed.

Expertise Layer

Claims exit the automated analytic process in one of three states: clean, error(s) confirmed, or review required. The technology layer typically confirms about 30% of the charges at issue. The remaining issues are confirmed through an expert review process that has been tuned for pre-payment timelines. 
The review adds 24 hours for most claims, though depending on the actions the payer elects to take, the process could take more time (e.g., if outreach to the provider is required). Reviews are conducted by physicians, certified coders or licensed nurses:
  • Physicians focus on complex coding errors and other potential clinical errors that can’t be confirmed without physician input. 
  • Coders and nurses focus on errors with a high confidence level, such as simple coding errors identified through industry-standard edits.

 

Action Layer

Because PARS is designed to identify more complex errors, the program supports a variety of actions to resolve issues. The most basic action is to remove the charges in error. This action is ideal when the errors are violations of commonly accepted rules, and its use is associated with the subset of factors that have the highest confidence that the rule was correctly identified.  Other actions incorporate more detailed reviews, documentation and, where appropriate, outreach to the provider, allowing for use of a greater number of the factors available. 

Service Layer

Integrated into PARS are detailed explanations to help MultiPlan reviewers, payers and providers understand the basis for any findings that impact reimbursement. These explanations are written in plain English and include citations. In addition to making these explanations available for a variety of service models, MultiPlan makes its physician reviewers available to support initial findings or review documentation provided to overturn findings, should an action lead to provider appeal.

Conclusion

MultiPlan’s study of commercial claims confirms that, while technology is a necessary component of pre-payment integrity, the ability to pause between analysis and action to allow time for an expert review enables a focus on more complex – and costly – issues suggestive of waste and abuse. 

Key findings include:

  • By allowing time for an expert review, the opportunity to avoid paying for inappropriately billed charges more than doubles while adding only about 24 hours to the claim’s processing time. 
  • The pause enables use of more provider-mindful strategies where appropriate, such as sending an education and alert message or reaching out to the provider for clarification.
  • Analytics – particularly automated analysis – must go beyond NCCI. More sophisticated logic is needed to minimize false positives, and rules must be dynamic enough to react to claim billing trends.
    With the ever-increasing complexity of medical billing, too many erroneous claims are either left unaddressed, or lead to pushback and appeal logjams, unless confidence and credibility are established from the start. MultiPlan’s PARS system offers significant advantages over current processes, and the opportunity for substantial cost savings for healthcare payers and their plan members.