To keep costs under control, health plans strive to identify and quickly address improper claims payments. When it comes to payment accuracy, however, no single, silver bullet solution exists. Instead, organizations must take a portfolio-based approach to payment integrity. Targeting multiple sources of overpayment is the best way for plans to positively impact their bottom line.
Are You Overpaying for Level 5 Emergency Room Services?
The American Medical Association CPT Guidelines characterize the clinical conditions appropriate for Level 5 ER visits as those that “are of high severity and pose an immediate threat to life or physiologic function.” The associated CPT code requires providers to collect a comprehensive patient history, perform a comprehensive exam, and engage in medical decision-making of high complexity.
Between 2012 and 2019, Level 5 Emergency Room billing increased over 215% on average. Some ER visits certainly warrant Level 5 coding – such as severe burns, toxic ingestions, or severe infections requiring IV antibiotics. Yet, some health plans see physicians and facilities that provide Level 5 Emergency Room Services for relatively minor problems like ear aches or colds and upper respiratory infections.
Identifying and eliminating inappropriate use of the Level 5 ER visit code is proven way for health plans to accelerate cost recovery. The difference between a Level 5 and a Level 3 ER visit is approximately $1,000. When artificial intelligence-based algorithms are applied with a clinical lens, it’s possible to determine whether claims meet the Level 5 requirements identified in guidelines, criteria, and clinical information. With this approach, there is no need for medical record request or review.
The monetary opportunities associated with inappropriate Level 5 Emergency Room Services are large. At HMS, we’ve worked with multiple Medicare Advantage plans, as well as commercial and Medicaid MCOs, on this issue. These organizations have saved over $100 million and the average appeal rate has been less than two percent of the total claim volume.
Replacing a Claims-Centered View of Payment Accuracy with a Member-Centric Approach
Traditionally, health plans have analyzed individual patient claims to identify potential coding and billing errors. This approach presents multiple challenges. First, it doesn’t take a holistic view of patient care. Second, it tends to be slow since health plan savings are dependent on access to patient medical records. It’s not uncommon for providers to take several months to as long as a year to provide these medical records.
A better alternative is for health plans to adopt a member-centric audit approach to payment accuracy. This means analyzing an episode of care in its entirety, looking at multiple claims across multiple providers and at many points on the healthcare continuum. The episode of care approach to payment accuracy broadens the scope of claims analysis to the entire patient journey. By combining technology and human expertise, it’s possible to make contextual decisions about the accuracy of services billed without first obtaining the patient’s medical record.
To make episode of care analysis efficient and scalable, organizations can leverage machine learning algorithms to target claims for review. Then clinical recovery specialists can evaluate each claim within the context of the patient’s history to identify mismatches between diagnoses and procedures that resulted in overpayment. Since medical records aren’t required, the burden on providers is reduced. At the same time, health plans can accelerate the payment recovery process. In our experience at HMS, episode of care analysis has accelerated recoveries by 90 days on average.
Viewing patient care through an episode of care lens isn’t attractive only to payers. The healthcare sector as a whole has recognized the value in moving to an episode of care model for coding. As of January 1, 2021, new American Medical Association guidelines will take effect. Under these guidelines, providers will select evaluation and management (E/M) codes based on the total time spent on the date of the encounter or medical decision making. This decision will be based on whatever is most financially advantageous. For encounters, physician documentation must accurately articulate what occurred.
ER billing compliance and episode of care analysis are just two strategies that leading health plans are incorporating into their payment integrity programs. Many more payment accuracy approaches exist and should be considered as part of a comprehensive payment integrity portfolio.
To learn more about new approaches to increasing health plan efficiency, register for HMS’s webinar on November 12th – Containing Healthcare Costs: Emerging Payment Integrity Solutions to Streamline Recoveries.