In the realm of Medicare, Medicare Advantage (MA), and Commercial Insurance claims, requests for records and claim reviews are commonplace. Insurers generally follow similar processes for these reviews, which can include both prepayment and post-payment audits as outlined by CMS for Medicare programs. The primary objective of these reviews is to minimize improper payments. According to CMS’s FY 2023 Improper Payment Fact Sheet, the estimated improper payment rate for Medicare Fee-for-Service (FFS) was 7.38%, or $31.2 billion, while for Medicare Part C (Medicare Advantage), it was 6.01%, or $16.6 billion1. Although Commercial Insurers are not subject to the same reporting standards, it is reasonable to assume their error rates are comparable. CMS is mandated to audit and report on these rates to maintain program integrity.
Prepayment claim reviews typically involve examining medical records and applying National Correct Coding Initiative (NCCI) edits to prevent inappropriate payments. CMS and many commercial plans use these edits and others to scrutinize claims. Post-payment reviews can be conducted by various agencies, aiming to identify errors and verify if the claim was initially processed correctly. A prepayment review results in an initial decision on whether a claim will be paid, while a post-payment review may result in the claim being fully paid, partially paid, or denied.
Providers must understand that for complex prepayment or post-payment reviews, or automated reviews by contractors, CMS has instructed Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) to limit their review to the reasons for the initial denial. However, in cases involving automated prepayment denials, MACs, and QICs may introduce new issues and evidence at their discretion, potentially leading to unfavorable decisions on grounds not initially specified. Appealing a denied claim is almost always an option, there are very few unappealable instances, so preparation to follow up on denied claims is essential. Providers are often seeking advice in this area which Powerback offers to our customers and business partners, as well as through our Powerback Consulting services.
Current areas of focus in claims reviews
In the Skilled Nursing Facility (SNF) and outpatient therapy sectors, Medicare, MA, and Commercial Insurers are currently focusing on several key areas. For Medicare Part A or MA services, reviews are concentrated on the Patient-Driven Payment Model (PDPM) and the necessity for SNF-level care, with particular attention to items on the Minimum Data Set (MDS), especially section GG. The focus is on specific billing codes and modifiers in all outpatient settings, including SNF, for Medicare or MA Part B services and Commercial Insurers. Across all settings, reviewers are keenly interested in supportive documentation that demonstrates medical necessity, proper coding, prior authorization, and benefit verification.
Proactive strategies for managing claims reviews
A proactive approach is crucial in managing claim reviews effectively. Assembling a team with the right members to review documentation for technical compliance and ensuring clear communication are essential. Accurate and complete coding—both ICD-10 (diagnosis) and HCPCS (billing)—supported by thorough documentation, is critical. Implementing a quality assurance program that ensures technical and regulatory compliance in all documentation areas is key. This includes verifying timely signatures, meeting specific setting and timeliness requirements, and accurately capturing medical necessity. From a Medicare perspective, medical necessity involves demonstrating that services are reasonable and necessary for diagnosing or treating an illness or injury2. Since not all payers agree on this definition, reviewing specific insurer policies is vital to ensure compliance.
Regardless of the payer, documentation must clearly justify why particular services are needed for the beneficiary at that time and setting. It is important to remember that while medical necessity and skilled services are related, they are not synonymous; effective documentation must demonstrate why services are skilled and cannot be performed by an unskilled provider, caregiver, or the beneficiary independently. Key elements include outlining the unique skills, actions, facilitation, critical thinking/analysis, testing/reporting, and interventions performed that only a professional could have provided for the patient. In essence, having a strong, well-prepared team is crucial for navigating Medicare, MA, and Commercial Insurance reviews and denials.
How Powerback Consulting can help
If you are a provider in need of support, Powerback Consulting can assist with the claims review process, aiding with the medical review, and handling denials and appeals. Proactively, our Certified Professional Coders and licensed nurses and therapists can provide comprehensive coding and documentation reviews and advice.
We can help! Learn more about Powerback Consulting and how we can streamline your claims review and appeal process.
Ami E. R. Faria PT, DPT is the director of reimbursement at Powerback Rehabilitation
