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Mistaken payments add up to an estimated $200 billion, exceeding 10% of national healthcare costs. Other Party Liability (OPL) alone, i.e., claims that should be paid by somebody else, make up $68 billion or 3.6% of national healthcare cost. The enormous size of potential

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

savings due to improved claims processing continues to attract attention and resource focus. Insurance profitability experts believe that a payment scrutiny program can be as successful a profit-building strategy for insurance companies as raising premiums or adding member

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

s. A growing industry of outsourced technology and services to avoid mistaken payments is also symptomatic of a growing demand for such services. Some vendors cite cumulative payment savings as high as $3 billion.

However, avoiding mistaken payments is hard because of fou

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

r-pronged constraints, namely, the volume of claims, the disparate and disconnected sources of relevant information, the resource-intensive manual processes needed to identify and investigate recovery opportunities, and regulatory requirements for timely payments.

To manage

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

these difficulties, many payers adopted a two-phase-based “pay-and-refund” approach for payment minimization. The second phase of this approach is designed to correct any mistakes made during the first phase. Each of the phases can be further divided into two stages. Spe

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

cifically, the initial phase splits into prepayment review and timely payment of valid items, while the final phase includes post-payment audits and refunds of items proven invalid during the audit.

Prepayment Review

Prepayment review typically proceeds in two stag

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

es, identification and confirmation. Potential overpayment identification requires cross-referencing multiple systems that manage provider enrollment, authorizations, recovery case management, and call centers for both insured and providers.

Overpayment confirmation uses C

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

orrect Coding Initiative (CCI), Local Medical Review Policies (LMRP), and other rules to categorize the potential overpayments into Contractual/Clinical, Eligibility, Coordination of Benefits, or Duplicate Payments. Overpayment confirmation typically includes tests for in

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

er-claim, intra-claim, or cross claim inconsistencies, lifetime duplicates, date range duplicates, re-bundling, inappropriate modifier codes, wrong E&M crosswalk, upcoded or undercoded visit level, etc.

Prepayment review requires powerful database technology. Most of prepa

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

yment claim review process can be automated along with subsequent denial notice or explanation of benefits (EOB).

Post-Payment Audit

In contrast, post-payment audits tend to consume more resources during each one of the audit stages:

Target identific

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ation

Audit identification report shows total annual revenue and the degree of variance between the audit target and peers in the same specialty and geography. The product of the two numbers is proportional to the expected gain from the audit, essentially providing a n

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

atural audit ranking.

Audit preparation

A higher return to the payer is the key advantage of a carefully designed and executed post-payment audit. Audit preparation starts with a review of audit target selection, which is the result of provider profili

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

g and variance reporting. This stage includes a list of claims paid in the past that are most likely to fall outside of standard distribution of the peer group.

Audit execution

The auditor requests and analyzes medical notes supporting the data reflecte

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

d in the sample of paid claims produced at the audit preparation stage. The auditor’s objective is to establish the proportion of claims found unsupported by reviewed medical notes within the set of audited sample (percent of overpayment).

Refund (and penalt

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

y) extrapolation

The auditor extrapolates refund as the product of percent of overpayment and the total payments by the auditing insurance carrier for the past six years.

Negotiation

Settlement

Some stages, such as

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

audit execution, negotiation, and settlement must be entirely manual, and may require highly skilled and experienced personnel. Other stages, such as verification of overpayment amount and currency, identification of overpayment reason, and audit prioritization, may be part

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ally automated, using rule-based technology to identify procedure repetition, high payments per day, surge analysis, unusual modifiers, unusual procedure rates, geographic improbabilities, or 5/50 patterns. External resources might be added at this stage to consult provider

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

watch lists, OIG sanctions databases, or high-risk address databases.

Summary

A full-scale implementation of payment scrutiny requires sophisticated processes to handle prepayment claim review and post-payment audits and uses advanced fraud detection technology.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

Prepayment claim reviews are less expensive than post-payment audits and therefore can be applied to every claim, while post-payment audits must be carefully targeted. A system to manage overpayment recovery process must include claim identification, its history, provide

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

r and insured information, medical notes, insured services call center notes, authorizations, etc. Without the ability to efficiently manage a large volume of recovery cases, the risk for errors or missed payment deadlines is high, resulting in missed recovery opportunities

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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