The Importance of Independent Payment Integrity

The Client's Broker and TPA told the client that their agreement already included periodic claim reviews to ensure that claims are properly priced and paid.

We discovered that the TPA's "claim reviews" and price negotiations were causing overpayments and egregious price gouging, which cost the plans and their members millions of dollars.

Report Overview

This is an electronic analysis of claims that identifies improperly paid medical (i.e., professional, outpatient facility, and inpatient facility) claims. Leveraging more than 700+ proprietary algorithms, our team reviews all claims paid by the plan over the past 36 months.

Claim Categories

Binary Findings. In this example, the paid claims are riddled with significant binary errors: immediately identifiable overpaid claims.

Binary Error Categories

Most Binary Error overpayments are claims that did not adhere to industry standard coding and payment guidelines.

Billing & Coding/Payment Guidelines: These errors occur when claims are inaccurately and incorrectly coded (e.g., unbundling, fragmenting, and upcoding). Unbundling occurs when multiple procedure codes are billed for a group of procedures that are covered by a single comprehensive code.

Medically Unlikely Edits (MUEs): MUE errors occur when the units of service (UOS) billed by a provider for a specific HCPCS/CPT code substantially exceed the maximum UOS a provider would typically report for a single beneficiary on a single dose of service.

Duplicate Payments: A duplicate payment occurs when a provider 1) incorrectly bills on identical codes multiple times within the same claim, or 2) incorrectly bills the same claim multiple times. Duplicates are caused by a variety of factors, including insufficient system controls, weak or absent technology controls, and administrative processing errors. In some instances, human error can also lead to duplicate payments.

Flagged Finding Categories

Episode of Core: Claims in this category have been identified as likely in error by the state-of-the-art Episode of Core (EOC) cross-coding technology. The EOC technology references all billing records for a single event (e.g, Gallbladder Surgery) and applies a cross-coding engine with over 100 rules that identify incorrect coding by providers. The EOC tool identifies incorrect service code errors, upcoding errors, and outlier errors that are often missed by rule-based ·set and go" pre-payment systems.

Example: The claim was likely billed and paid in error. The claim should have been billed with DRG 208, which is the code for fewer than 96 hours of a Tracheostomy with mechanical ventilation. The overage reimbursement for DRG 208 is -S62K, which is more in line with the hospital's original billed charge of -S96K and is -S820K less than the actual paid amount.

DRG 004 incorrect coding happens frequently. An OIG audit discovered that Medicare overpaid hospitals -$ 20 million over two years for inpatient claims with procedure codes that required 96 or more consecutive hours of mechanical ventilation. Most insurance companies and administrators use the same software and process to adjudicate Medicare and commercial health claims.

Key Observation 2: In-network Non-facility Claims Paid with No Discount. In-network non-facility claims were paid with no reduction or discount applied to the billed charges. These claims severely impacted the plan and member OOP expenditures.

Key Observation 3: Paid Amount Exceeds the Billed Amount (in-network), a 43% mark-up over providers' requested compensation. Plan sponsors do not believe adjudication would ever pay more than their PPO or network-agreed-upon reimbursement. It happens more often than anyone wants to admit.

 The Recovery Service is unprecedented. This is far more than a “Forensic Audit.” 100% of your claims paid over 36 months are re-priced, cross-examined, confirmed, and then recovered from hospitals and administrators.