Teaming up for medical necessity compliance

Healthcare Financial Management, Feb, 2006 by Linda Bosenbark, Anne Vincenti

The saying, "If you want something done right, do it yourself," doesn't apply when it comes to ensuring clean claims.

One person-even one department-is hard pressed to take on this challenge in today's environment, where the task of coding and billing claims gets more difficult every quarter, possibly every month. That's how often payers update the rules that govern coding and compliance.

To keep up with ever-changing regulations, patient financial services departments are reaching out to other departments and experts within the hospital to ensure claims are sent correctly the first time. Today, each functional department along the revenue cycle is sharing in the responsibility for reducing the number of days a claim remains in accounts receivable-a difficult task, to say the least.

Reducing Back-End Fixes and Rework

To come up with new ways to reduce the number of claim denials and the amount of time that staff spend fixing claims after the fact, PFS professionals are looking not only at the benefits of front-end medical necessity compliance, but also the value of improving processes before bills hit a claims scrubber.

To drop a clean claim, PFS departments often must undertake the time-consuming process of consulting with multiple departments in order to confirm that the appropriate documentation exists to support adding modifiers or changing current procedural terminology or Healthcare Common Procedure Coding System codes. Worse yet, if the claim scrubber triggers an edit, a decision may be made to simply write off the charge assuming that its value is not worth the trouble of rework to fix the problem. Or the claim will be submitted knowing that it will be denied and will need to be corrected later by denials management staff.

Back-end fixes and rework require that billing or coding staff:

> Manage a worklist of unresolved edits

> Pull charts

> Compare diagnosis and procedure code pairs manually against local fiscal intermediary rules

> Communicate with physicians or departments to check for additional documentation

> Ensure the appropriate use of modifiers

> Relay their findings and fixes back through the abstracting process, returning the claim to the billing department to rescrub

The end result may be cleaner claims, but back-end fixes and rework require a significant investment of time and labor, resulting in lost productivity and increased accounts receivable days.

An alternative approach would be to create a proactive integrated team made up of representatives from PFS, medical records coding, patient access, ancillary and clinical staff, and compliance, with responsibility for:

> Performing retrospective review of claim errors that occur throughout the revenue cycle

> Assigning responsibility for fixing the source of the identified problems

> Determining accountability for error resolution

> Reviewing new and upcoming regulations to determine financial impact and implementation implications

> Approving new services to be added to the chargemaster

This team of experts would review all hard- and soft-coded CPTs, revenue codes, and ambulatory payment classifications for editing, making it possible to track errors and pinpoint problems that occur repeatedly. After defining the impact of various problems, the task force could then address issues that have a significant financial impact or compliance exposure, as well as those that are simply easy to fix.

Although this approach involves a substantial process change for most facilities, it can have far-reaching benefits. Staff resources would be used more efficiently as PFS, ancillary, and coding staff members become more knowledgeable about each other's area of expertise and how they can best work together to effect change.

Taking the Detective Work Out of Coding

There are numerous variables that can have an impact on coding compliance. The Centers for Medicare and Medicaid Services has issued national coverage determinations that affect countless procedures. Local carriers contribute to the maze of information with their own local medical review policies (now known as local coverage determinations). Correct coding edits that regulate which pairs of codes can and cannot be billed together are added and modified frequently. Often the detective work involved in discovering potential problems and avoiding coding errors is overwhelming.

New software and web-based technologies are making this task more manageable. Many electronic or online solutions are designed to quickly and automatically identify specific edits that will derail a claim, thus allowing coders to incorporate this information early in the initial coding session. For example, technology can immediately identify situations in which application of modifier-CA would be appropriate. This modifier, indicating that a procedure payable only in the inpatient setting was performed in the emergency department on an outpatient who died prior to admission, allows the hospital to be paid for the encounter. Without the modifier, the entire claim would be denied.