Our healthcare and business law firm often assists medical practices in responding to medical record and coding audits initiated by private and governmental payors. If a payor believes there are consistent concerns with a medical practice’s claims, the payor may place the practice under a prepayment review process. This process can be very concerning to a practice and, in some cases, can place a practice at risk of shutting down. If you have questions about an insurance audit or prepayment review process or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.
Standard Claims Reimbursement Process
Generally, once a medical practice establishes a relationship with a payor, the practice can submit claims electronically that are paid without requiring individual review. Generally, supporting documentation is not required to be submitted along with the claim. Periodically, the payor may run routine audits asking for documentation to support certain claims. The payor will review those claims and documentation. If all looks good, nothing will come from the routine audit. If there are deficiencies in coding or documentation, the payor may request more information, immediately request a refund for an overpayment, wish to expand the audit, and/or place you on a prepayment review.
A prepayment review is what it sounds like—the payor will review each claim and all supporting documentation before paying a medical practice for the claim. Generally, this requires faxing in each claim and all documentation, rather than submitting claims electronically. It also requires the payor to have an individual manually review each claim and documentation to determine whether to pay the claim. This process can result in delays in payment to the practice for days, weeks, or even months. Generally, the practice will stay on the prepayment review process until it is clear that a certain high percentage of claims are properly submitted and paid. This process can be frustrating given the delay and often lack of clear communication with the insurance company. Even more, the payor may place a practice under prepayment review before determining whether the practice truly owes an overpayment. If payment from this payor makes up a large percentage of the practice’s revenue, the prepayment review process can place a practice in jeopardy of shutting down.
Facing an insurance audit is already scary enough, considering the treble damages available if the payor believes you to have engaged in fraud. When a prepayment review process is added, however, the risk of serious damage to a practice becomes even more imminent. If you have questions about an insurance audit or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, email@example.com. You may also learn more about our law firm by visiting www.hamillittle.com.
*Disclaimer: Thoughts shared here do not constitute legal advice.