By GARY G. TWIGG, president and CEO, Bloodhound Technologies
As part of the healthcare claims adjudication process, claims payers must edit all incoming claims to ensure they were coded properly. Common errors such as duplicates, improper bundling, and unbundling of services and inappropriate modifier use are quickly flagged through the payer's editing system and sent back to the healthcare provider for revisions. However, not all claims-editing systems are the same, and it is imperative that payers use a platform that is both technically and clinically advanced.
Given the large amount of healthcare claims coded incorrectly each year, payers must either maintain the editing process in-house, or outsource to a third-party vendor. Payers must accurately gauge their clinical and technical expertise if they decide to manage editing internally because miscoding can cost the payer upwards of tens of thousands of dollars in overpaid claims if the error is not caught during the adjudication process.
In working with a third-party vendor, payers have a number of options to choose from in terms of technology, content (or edits) and service models. The content offered by editing vendors is often foremost in customer minds, and vendors typically have millions of edits in their systems or software. To simplify reporting and understanding, edits are often broken into rule categories that group similar edits together.
For example, the software will check for up-coding (provider services being billed for a higher procedure than what was actually performed), bundling and unbundling of codes (a routine post-op visit being billed as a separate encounter instead of being billed as part of the surgery), and duplicate claims submissions or claim lines. This is based on pattern-matching algorithms. It is important that a check for duplicates is done to make sure that the patient does not overpay for the service.
MOVING TOWARD TRANSPARENCY
The sources behind the edits are just as important as the number of edits. Traditionally, edits have been exclusive to the outsourcing vendor. That is, a medical team at the editing vendor created the edits based on their interpretations of regulations. While this offered a feature with which vendors could compete, it also led to friction with providers over the lack of standards and accountability.
A few vendors now solicit the use of open-source edits that come from national organizations such as the American Medical Association and the Centers for Medicare and Medicaid. Taking the open-source model one step further, some vendors can make edits and their sources available to providers.
Another point to consider is how the edits offered by an outsourcing vendor can be customized to reflect payer-specific reimbursement policies. Some vendors are only able to turn edits on or off. If payment policies are different across lines of coverage or geography, this can force a payer to either pay claims they normally wouldn't or pend and manually review claims.
TWO TYPES OF TECHNOLOGY DELIVERY
The two primary technical models for delivering claims editing are installed systems that are embedded in the claims transaction system and one based on Software as a Service that sits outside the claims system. Installed claims-editing software packages often have integration links with the major claims transaction vendors, but integration can take from six months to more than a year.
SaaS systems are usually much quicker to implement because they sit outside the claims transaction system, but payers should insist that the SaaS system is fast enough to handle peak claim volume.
Other technology based considerations for payers are processing speed--real-time should be required by large payers--as well as the strategic partnerships and integrations an editing vendor has with other vendors.
SERVICE AND SUPPORT
Payers should also consider service and support levels when selecting an editing solution. Service and support models vary among the leading claims-editing vendors. In general, analytics, the updating and maintenance of edits, and customer support are key factors for payers to consider.
Another major service challenge with claims editing is keeping edits up to date and current. Correct coding initiative edits are updated quarterly, current procedural terminology procedural codes are updated annually and CMS policy changes can occur at any time. Because of this constant change, it is imperative to have a process for keeping edits current.
With an installed editing system, updates are typically sent to the payer, which then bears the responsibility for installing the updates. SaaS vendors can usually make edit updates and then push those updates to clients without requiring any effort on the part of the client.
Analytics are crucial for payers to determine return on investment and to provide visibility into their businesses. Many editing vendors are able to offer reports to their customers that summarize and detail savings by category and by individual claims. Some even allow providers access to these reports, which promotes transparency and openness.
The last component of support is traditional customer service. As reimbursement policies and regulations change and lines of businesses are added or dropped, it is important for an editing vendor to have an account team to make sure its clients' changing needs are met.
Given the amount of effort required to create and maintain a claims-editing solution, many healthcare payers find it practical and cost-effective to outsource some, if not, all of their claims-editing needs. Payers in the market for claims-editing solutions should focus their attention on content, technology delivery model and support when selecting editing vendors, which will ensure a better relationship between payers and the providers.
May 1, 2009
Copyright 2009© LRP Publications