Using case management to improve claims payment - patient account management

Healthcare Financial Management, May, 1995 by Julie A. Micheletti, Steve Mevert, Thomas J. Shlala

PATIENT ACCOUNTS MANAGEMENT

Payers increasingly are subjecting claims to intensive review in an attempt to control amounts paid for healthcare services. An internal case management program, however, can help providers better understand and respond to the review techniques employed by payers as well as streamline overall processing.

For years, payers have tried to control reimbursement through retrospective medical review and concurrent case management functions. Today, payers are challenging claims for payment that previously were considered to be acceptable using even higher-level review techniques. These techniques identify cases that raise questions concerning the medical necessity of services that have been delivered, the appropriateness of continued coverage of a patient by a payer, and the suitability of continued payment at pre-established negotiated levels.

The practical effects of these payer techniques for providers are refusal to authorize the delivery of some treatment alternatives, reluctance to continue to authorize payment in keeping with prenegotiated discounts, delays in payment for services for 60 to 90 days or longer, denial of full payment for services that have been rendered, protracted appeals over payment disputes, and continued debate or conflict with payers over the appropriate amount of payment.

Providers may help to ensure timely and proper payment, facilitate claims processing and payment, and improve cash flow by developing their own internal case management strategies. Effective case management can assist providers in the accurate preparation and prompt submission of claims, reduce unnecessary review of claims by payers, accelerate the payment of claims, and provide support for ongoing negotiation with payers over the services provided and the payments made for those services. In addition, effective case management can provide a framework within which providers can plan the delivery of services to minimize excessive use of resources and maximize reimbursement.

Payer review techniques

Three principal types of review techniques currently are being used by payers to target claims for scrutiny: payer system edits that flag a case for individual review, medical review that occurs before authorization for payment, and case management that concentrates on select diagnostic conditions or therapeutic modalities.

Payer system edits. When specific measures - such as the total number of days of treatment or the total gross amount of charges billed - exceed given thresholds, some payers classify claims as pending and isolate them for intense review. These measures are one form of payer system edits. Other payer system edits cover suspected billing errors, such as a claim that has a duplicate date of service. For example, a home health agency nurse may visit the home of a patient who is receiving hydration therapy to change an intravenous site. On the same day, the patient may make an unplanned trip to an outpatient setting to receive a platelet transfusion.

A payer system edit will review this type of case because the claims from the two providers make it appear that the patient was in two places at the same time. In practice, the payer routinely will process payment to the provider who submits the first claim for treatment on the date in question; it will refer the claim of the other provider for further review.

Medical review. A case may be referred to a payer's medical review department before treatment is authorized in order to assess the medical necessity of a planned course of therapy. One example of such a case is a claim for total parenteral nutrition (TPN) for a cancer patient that a physician has ordered in anticipation of a patient's nausea, vomiting, and anorexia that often occurs during and after chemotherapy treatments. A payer may request a copy of the patient's medical record or send a nurse to the patient's home to determine the need for TPN if the cancer patient has experienced only minimal weight loss or has some degree of oral intake.

Payer case management. Identified diagnostic conditions, such as acquired immune deficiency syndrome, or therapeutic modalities, such as growth hormones, usually are sent directly to the case management division of some payers. Payer case management is an extension and enhancement of the medical review function. It is concerned primarily with authorizing medical treatment and cost containment on a prospective and concurrent basis. For example, a physician may order an intravenous regimen of multiple drugs following chemotherapy, including an expensive medication to control nausea. The payer case manager may authorize the delivery of all medications except the anti-emetic because he or she believes a less expensive oral drug may be equally effective.

Although payer case managers authorize service delivery, they do not guarantee payment for services. The medical necessity of the services must be established before payment is approved. The review of medical necessity is considered a separate evaluation that is done after all services have been delivered.