eNEWSLETTER
Volume One, Issue 2
- Recent Legislation Increases the Health Care Payer's Obligation for Claims Review
- CareAssist and ClinAssist Work Together for Optimal Outcomes
Recent Legislation Increases the Health Care Payer's Obligation for Claims Review
Deficit Reduction Act and False Claims Act: What They Mean for Payers
On January 1, 2007, new federal legislation call the Deficit Reduction Act (DRA) took effect. The DRA has several significant implications for those involved in the health care industry. In this article we will look at two you need to be aware of – the breadth of the application and the importance of education on a key provision of the DRA.
The DRA applies to all in the health care industry that receives or disburses Medicaid/Medicare funds. This means the act applies to providers and commercial payers alike. Payers may negotiate discounts that vary from the uniform set of billed charges. However, providers may not differentiate in the amount or type of charges submitted on their claims based on a difference in payer type. For example, unbundled services which would be denied by Medicaid and Medicare may also be denied by commercial payers.
One of the key provisions of the DRA mandates training on the False Claims Act (FCA). This provision has very serious penalties for those who do not properly perform training. Thus, all organizations covered by the DRA, providers and payers, must develop a training plan and implement this plan as defined in the DRA.
You may ask, why did Congress feel it so important that people in the health care industry understand and be trained on the FCA? The FCA was passed in the mid 1980s to combat waste and abuse in the defense industry. It was passed after reports of the government paying $500 for a hammer. It applies to any claim or service that involves government funds, including Medicare and Medicaid.
Currently, the General Accounting Office (GAO), senior legal personnel, the Administration and a majority of Congress feel that the FCA is not being applied in the health care industry. The perception is that taxpayer funds are being used for the health care industry equivalent of $500 hammers. For example, charges for "room air" and items such as $100 diapers are common place.
The FCA covers not only "fraud" but "waste and abuse." Any charge the average person would feel is unreasonable can be contested under the FCA. This means all charges must be reasonable as a provider can only have one "charge master." If, under the FCA, fraud is shown, then criminal penalties can apply. If waste and/or abuse are shown, then significant monetary penalties can apply.
Our ClinAssist Forensic ReviewSM solution helps payers comply with their DRA and FCA obligations to ensure that claims are properly reviewed and paid correctly. ClinAssist helps payers make prompt payments by rapidly reviewing a bill, notifying them of the undisputed charges and working with the provider to reach a fair and equitable settlement of the disputed charges. Our Forensic Review solution yields an average savings of 20% after application of any contractual discounts.
Consistent with the FCA, our ClinAssist Forensic Review solution offers the following value added services:
- Compares individual patient charges with Federal guidelines and industry billing standards. As outlined above, these guidelines apply regardless of payer, as there can only be one charge master.
- Compares the claim with actual levels of care provided.
- Compares billing with authorized plan services.
- Reviews the claim for fair and reasonable charges for the services provided.
To learn more about our ClinAssist Forensic Review solution, contact us at 1-877-631-9080 or visit us online at www.assistgroup.com where you can request a complimentary pre-screen of a claim.
CareAssist and ClinAssist Work Together for Optimal Outcomes
Case Study: Diagnostic Related Groups and the Outlier Based Payer
Review Findings
ClinAssist performed a Forensic ReviewSM of claims for an adult patient with chronic pelvic infections. Utilizing the expertise of ClinAssist's physician panel and proprietary algorithms, we identified the following exceptions:
- Billing errors and irregularities for diagnostic imaging services
- Supplies and nursing services were incorrectly unbundled from the room and board charges
Results
The payer's contract provided for a diagnostic related group (DRG) with an outlier provision. The Forensic Review resulted in a $19,484 reduction of billed charges, which was agreed to by the facility after ClinAssist's settlement team presented the findings.
The Forensic Review adjustments reduced the submitted charges to a level less than the outlier minimum threshold, resulting in total payer savings of $29,915 or 47%. The plan's DRG payment of $8,077 was considered as full payment for the claim.