Some organizations hire one company to carry out their utilization review and bill review functions. This is known as bundling. Other companies outsource the two processes to two different providers. Still others handle one or both functions in-house. The quality of service should not change regardless of which model a carrier uses.
Integration is the key. If the two parties communicate effectively and transfer information between each other efficiently and accurately, then managing treatment cases can be cost-effective and compliant.
Even when one provider handles both processes, a lack of communication, and therefore effective integration, can often arise. How can organizations correct these communications problems? The first step is to identify the red flags that indicate that there is a communication breakdown.
Red Flag #1: Paperwork Inefficiencies
If data exchange between utilization review and bill review partners is not effective, then integration will be compromised.
An all-too-common scenario involves paper utilization review notes placed in a file folder. Bill review auditors check the folder to ensure they know the specific treatments approved. Costly human errors implicit in this system include:
- Auditors failing to check file folders before approving payment.
- Pre-approval departments and case managers sending notes directly to the bill reviewer, bypassing the file folder.
- Disorganized or missing notes, especially for complicated cases with high volumes of documentation, varied levels of thoroughness, consistency and accuracy in notes.
Red Flag #2: Inadequate Software Solutions
Solving the communication barriers to integration requires a technology solution that captures real data, not just notes, and electronically sends it to the bill review staff.
Good utilization review software greatly reduces the likelihood of error. Each claim has an attached CPT code that identifies the approved medical service, and matches it against the data that shows the actual treatment delivered. The codes communicate the treatment rendered and reimbursement amounts to the billing department. Relying on notes and folders instead of using software designed for medical review processes creates a fertile environment for mistakes, waste and noncompliance.
Red Flag #3: Code Confusion
ICD-9, CPT and UCR codes are the language of utilization review and bill review. Codes ensure that what was approved in utilization review matches the treatment that was delivered and billed. Confusion surrounding any of these codes is clear indicator of ineffective integration.
For example, the UCR code (the usual and customary rate) is applied to each workers’ compensation claim. But these codes and the reimbursement for each procedure differ considerably across states. For example, in Texas, reimbursement is calculated as a percentage of Medicare, while Kansas applies a standard 80 percent. Coding must be correct to ensure appropriate bill review.
Both the utilization review and bill review functions must include accurate communication to achieve true integration. Commitment to a culture of effective communication and the right software will eliminate conflicts in coding and inaccurate reimbursement regardless of which state guideline is being used.