Has a payer placed your facility on pre-payment review for certain services, such as emergency room visits for specific levels of care?
Pre-payment review means your facility must submit medical records with each affected claim before the payer will agree to pay or otherwise adjudicate the claim. This process:
- Increases administrative costs in the form of developing alternate workflows to submit medical records with affected claims
- Delays payment and increases days in accounts receivable
- Insinuates there are concerns with a provider’s billing practices
The latter observation is critically important; however, despite the serious nature of what pre-payment review suggests, payers often provide little to no explanation or basis for placing a provider on pre-payment review.
There’s often no transparency as to why it happened or what’s needed to end it. Providers have engaged neutral third parties to evaluate their billing practices, and these reviews find them to be compliant and consistent with Medicare and industry requirements. Providers are left to wonder what’s going on, how to move forward, and how to avoid this situation in the future.
Pre-payment review can be a worrisome status for a provider to have. Here are some key steps to consider if your facility is facing pre-payment review:
1. Make sure you’re aligned with CMS standards
First, consider what the Centers for Medicare & Medicaid Services (CMS) require regarding facility coding for Emergency Department (ED) Evaluation and Management (E/M) services:
Unique Methodology:
- CMS acknowledges that each hospital or ED may use its own unique system for assigning E/M levels.
- However, this methodology must adhere to certain principles:
- It should be medically necessary.
- The coding process should be consistent, reproducible, and correlate with the institutional resources utilized in the facility.
E/M Guidelines:
- CMS emphasizes that E/M guidelines should:
- Follow the intent of the CPT® code descriptor.
- Be designed to reasonably relate the intensity of hospital resources required to the different levels of effort represented by the code.
2. Assess the ask and your own resources
Next, consider what the payer’s pre-payment review asks of your facility or practice, and what challenges it may create to agree to it and comply. These may include:
Compliance risks:
Asking a provider to re-bill their claim under a different methodology to appease the payer would arguably place the facility or provider out of compliance with CMS requirements to have a consistent coding methodology which is uniformly applied to all patients. Non-compliance with CMS guidelines can result in False Claims Act exposure, fines and penalties and exclusion from Medicare and Medicaid programs.
Administrative burden:
Pre-payment reviews require providers to adjust routine workflows and submit extensive documentation before claims are paid. This is time-consuming and resource-intensive, and it unilaterally imposes significant administrative costs on the facility or provider — not the payer.
Impact on cash flow:
Because payments are delayed until the review is complete, hospitals and providers grappling with pre-payment reviews may experience cash flow issues. Delays in payment can lead to increased borrowing costs and financial strain on the provider. This can be particularly problematic for smaller facilities or practices that rely on timely reimbursement to maintain operations and standards for patient care.
3. Engage the payer using proven practices
Once you’ve confirmed your own compliance and assessed your resources, it’s time to take your concerns back to the payer. Consider these next steps in navigating this situation with the payer:
- Ask questions: Given the serious nature of pre-payment review, which suggest there may be concerns with a facility or practice’s coding and billing practices, it’s critical that such activities be done in complete transparency and good faith to ensure the parties fully understand the issues and work collaboratively to resolve them. Ask the payer to describe in detail the criteria it used to conduct its review and the analysis it employed to determine pre-payment review was appropriate. This is also an opportunity to ask the payer to produce the criteria it plans to use in evaluating whether to continue or terminate the pre-payment review status.
- Appeal: Facilities and providers have the right to appeal pre-payment review decisions. Understanding the appeal process and preparing comprehensive documentation can improve the chances of a successful appeal.
- Enhance documentation practices: Ensure that all medical records are thorough, accurate and up to date. Proper documentation can reduce the likelihood of claim denials and expedite the review process.
- Request a reconsideration: If the initial appeal is denied, hospitals and providers can request a reconsideration or a hearing, depending on the payer’s policies. This may involve presenting the case to an independent review board. Additionally, consider proposing a change in payment methodology to remove the payer’s incentive to downgrade claims. For example, a blended case rate for ER visits regardless of the E/M level can help ensure fair compensation and reduce disputes.
- Maintain communication: Keep open lines of communication with the payer throughout the appeal process. Regular follow-ups can help ensure that the appeal is being processed and provide opportunities to address any additional questions or concerns.
- Master your contract language: Understand your rights as a Contracted Entity and obligations to strictly adhere to CMS guidelines. If there are any uncertainties, consult legal counsel to ensure payers are not violating CMS guidelines when imposing their policies on hospitals and providers. In future contract negotiations, demand transparency and a robust appeal process should the payer wish to impose a pre-payment review status.
- Consider dispute resolution or litigation: Review the terms of your contractual agreement with the payer to understand the dispute resolution or litigation options available. This may involve mediation, arbitration or legal action if necessary. Engaging legal counsel can help navigate this process and ensure your rights are protected.
The bottom line
Grappling with a pre-payment review status can be daunting and feel quite unfair to providers who find themselves in this situation. However, there’s every reason to push back on payers, and numerous avenues by which to do so.
The key steps listed above offer a good start, and an expert end-to-end RCM partner can help you navigate the entire process. Ensemble is on the provider’s side, not the payer’s — when navigating pre-payment review, make sure you also have an advocate in your corner.
Your revenue cycle is too important to be left to chance.
Download our actionable checklist for questions to keep your team on track when navigating pre-payment review with payers.