The Importance of Medical Bill Review in Workers Compensation

Risk Managers and workers’ compensation claim managers normally know the purpose of medical bill review is to reduce medical bills to the state fee schedule or to the previously agreed amounts with the medical provider network. A good medical bill review company provides many more services. Unfortunately, many workers’ compensation insurance professionals do not understand all the services a medical bill review company can offer.

Upcoding Charges Higher Fee Than Injury Justifies

The adjudication process where the medical bills are compared to the state fee schedule or medical provider network schedule is the first step. The medical bill review company should also review whether or not the coding of the bill is correct. “Upcoding” is where the level of the medical care is coded at a higher level than was delivered, or where the medical care delivered is at a higher level than the injury justifies. Upcoding is used by the billing departments of medical providers sometimes in error, sometimes on purpose.

Either way, if upcoding is not caught by the medical bill review company, the cost of medical care is higher than it should be. Good medical bill review companies will not only compare the bill’s coding to the state fee schedule or the medical provider network schedule, it will also review the coding to determine the appropriateness of the coding and “downcode” the bill when appropriate.

State Fee Schedule Comparison Only First Step

It is important that the medical bill review company utilize the specific state fee scheduled where the injured employee was treated. Employees who travel constantly, for example, truck drivers and salespeople, often have an accident in one state but need medical treatment near their home. The medical bill review company needs to have the flexibility to utilize the appropriate fee schedule and not be locked into the state where the injury occurred.

The medical bill review company should provide highly experienced RNs to review specific types of medical bills, like surgical bills and all in-hospital bills to verify proper coding, the delivery of the services billed, and the necessity of the services provided. If the medical bill review company is only comparing the codes on surgical bills and hospital bills with the fee schedule, it is almost definite the payer of the medicals bills will have paid too much.

With surgical bills, the review of the bill should be completed by the highly experienced nurse. Medical bill coding alone will not be able to address whether or not a procedure was done in compliance with FDA-approved methods. Also, the use of a medical professional to review the medical billing will identify when something billed is outside the norm.

The medical bill review company should be able to assist with the cost of catastrophic care. When a stay at a hospital is needed, the medical bill company should have the expertise to understand the extent and depth of care needed, and negotiate the cost of the treatment with the CFO of the hospital.

When long-term care is needed, the medical bill review company should be able to partner with the field nurse case manager to negotiate the fixed cost and translate the cost into a daily rate. Also, the medical bill review company should be able to revisit the long-term rate every couple of months to adjust the daily rate to reflect changes in the needed medical care of the injured employee.

The medical bill review company should be able to assist with the cost of durable medical equipment. Often, durable medical equipment will not fit into the state fee schedule, or if it is covered in the fee schedule, it is under a miscellaneous code. The medical bill review company should be able to verify the cost is proper for durable medical equipment.

Turn Around Time Should be Prompt

Turn-around time on medical bill processing should be prompt as some states impose penalties for late payment of medical, California for example. As there are often delays with the medical provider sending the bill and delays in the mail, the medical bill review company needs to act quickly on reviewing and adjudicating the bill. The medical bill review company should have a turn-around time of 7 days or less.

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

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