5/1/2009

Medical Compliance Menu

Served daily: regulation ragout—you can’t tell what’s what, and it’s sure to give you indigestion. Software providers may have a prescription.

By John Gilmartin

One part medical coding guidelines, two parts state and federal rules and regulations, a pinch of interpretation and dash of implementation, and you have a hearty concoction even the most experienced insurance payer and claims adjuster will have difficulty digesting.

Reviewing and processing medical claims or bills in health, workers’ compensation and automobile lines of business has become more complex than ever before. The increased frequency of medical compliance issues, the addition of state fee schedules, electronic billing and remittance, and state reporting mandates are a recipe for compliance disaster.

While swelling claims expenditures are related to the high costs of the services being provided—healthcare costs have increased at a rate of 8%–10% year over year—a large percentage of the increases are tied to leakage directly related to the growing complexity of medical compliance.

What with the American Medical Association (AMA), National Correct Coding Initiative (NCCI), Centers for Medicare & Medicaid Services, plus other medical coding rules and regulations driven by best practices, medical billing and coding standards groups like the National Uniform Billing Committee, Workgroup for Electronic Data Interchange, X12, and the International Association of Industrial Accident Boards and Commissions, it is unreasonable to expect any organization or individual to know how to handle the eight quadrillion existing medical billing scenarios. Yes, that’s an eight followed by 12 zeros. Add the thousands of state and federal rules to this already staggering figure, and as a member of the medical billing community, it might seem that you’re destined for failure when, in fact, there is a light at the end of the tunnel.

Following the rules of the road using medical bill review and compliance software can keep insurance payers, third-party administrators, self-insureds, and other constituents compliant—allowing these organizations and claims adjusters to focus on other complex claim-decision issues. The recipe for success is rooted in four main areas: (1) selecting the best partners, (2) testing, (3) internal ownership and, most importantly, (4) following a balanced and fair reimbursement and communication strategy.

Selecting the Best Partners
Get the right mix by choosing the best software vendor/partner. This requires a rigorous selection process that includes evaluating each potential vendor’s knowledge and experience, flexibility and configurability, availability to provide an integrated rules engine, ability to integrate with other solution providers, and use of fair and accurate standards.

While some compliance topics are cut and dried, other issues are not so simple. These interpretive or undefined situations require the partner’s solution to be flexible and configurable. You can overcome these common hurdles by choosing a partner that will allow you to configure its application to meet your specific business needs. A rules engine is a software solution that executes business conventions externally from the core application in order to allow the organization to be more dynamic, flexible and adaptable. In other words, the rules engine is the component of the overall solution that allows customers to personalize the solution to their unique business process and approach. These rules engines are typically a combination of “if-then-else” scenarios intended to identify a specific variable, take action if true, or take an alternative action if not true.

It is paramount for medical bill review and compliance solution providers to utilize a powerful rules engine that contains all (or at a minimum the most common) data elements and common operators, and that can take action or route bills or claims to specialized work queues. The rules engine must allow for multiple hierarchical rules to be integrated in with the solution and be flexible enough for rules to be changed quickly by business or technical owners. The most dynamic rules engines can handle both inference (if/then) and reactive event condition rules that effectively route inbound information and processes.

While choosing a provider that can provide you with all of these fundamental elements is a must, integration is another necessity that you can’t overlook. The optimum medical bill review and compliance solution providers integrate with other specialized partners. They recognize that they alone cannot address and solve all of the business needs of the customer. Providers that collaborate with other partners frequently offer the best overall, highest-quality solution or service at the best price. Be sure your medical bill review and compliance partner has an open strategy and has integrated with other best-in-class specialty partners in the area of payment, imaging and data capture, managed care, pharmacy, preferred provider organizations, and negotiation services.

What to Look for in a Software Vendor/Partner
It is absolutely critical for medical bill review and compliance solution providers to possess knowledge of the industry’s needs and the experience required to deliver these solutions to the market.

The organizations you choose as partners must also understand the federal and state rules and the role of the AMA and NCCI. They must be able to include and keep fees current and integrate data and rules together at varying hierarchy levels. Their proficiency must be expansive enough to include knowledge of which Web sites to monitor and the key contacts to call at the federal and state level. They need a dedicated medical team aligned to help with rule interpretations. They should also be active participants in standards organizations and groups ,and ultimately take positions on topics that impact the industry.

Partnering with a provider that has attained an elevated level of knowledge and experience that includes all of these components will help ensure that you remain where you need to be—in compliance with the rules and regulations.

Test the Software
Some consider testing a necessary evil required only for the solution provider’s software application. Customers, too, should engage in some amount of testing up front and during regular intervals to ensure the expected results are achieved and business and technical processes aren’t harmed or interrupted. The amount of testing is tied to the complexity of the integration with your partner, and each carrier must evaluate workflow and processes to ensure the solutions not only work, but provide peak performance. Customers should develop test plans that describe the analytic process, undertake test cases that describe the inputs and expected outputs, and provide test results that describe what passed or failed in each test case. Your solution provider should support you during your testing efforts by giving you full access to its test plans and results, along with access to a testing environment of the version of the software you’ll be implementing.

Internal Ownership of Compliance
Don’t buy a solution and expect it to be successfully implemented and managed externally. Consider your software provider a partner, meaning there’s another member of the relationship—your business. Even if building or utilizing a full strategic vendor management program is not possible for your organization, it is very important to assign individual “owners” to oversee and manage the medical bill review and compliance process. In addition to legal and procurement individuals, organizations should assign business and technical personnel either on a full-time or a temporary assignment basis to ensure the solution is implemented, managed and maintained according to your desired goals and objectives. If medical expertise exists within your organization, be sure to include those individuals as well. Organizations that do not assign internal owners struggle with adoption, policy and process adherence, and implementation.

Start by developing a formal written plan that clearly defines your expectations of the software partner and be sure to include a scorecard with key metrics. Be inclusive and solicit input from all internal stakeholders. After the plan has been established, share this with your partner and establish monthly stakeholder teleconferences and quarterly or semiannual face-to-face stakeholder sessions. These will facilitate your respective teams in addressing issues, solving problems, and providing general communication. Lastly, be sure your internal owners support your effort to be open and honest with your partner. If something isn’t working, they deserve an opportunity to address the problem.

Balanced and Fair Reimbursement and Communication Strategy
Navigating your way through the labyrinth of code sets, federal and state rules, and a multitude of regulations, isn’t the only challenge for your medical compliance software. As part of your compliance solution partnership, be certain that your vendor and internal staff understand your underlying commitment to reimburse injured claimants a fair, accurate and reasonable amount. It is incumbent upon you and your compliance teams to communicate this approach internally and externally to all involved.

To keep your teams focused on serving your customers and making the right claim decisions, be aware of the increasing frequency and complexity of the medical compliance changes happening within your state, region or nationwide—but don’t fret. There are organizations that can assist you in this process and help you digest this overwhelming menu that is constantly changing. To guarantee success, select the right software vendor/partner, engage in testing, assign internal owners, and communicate your balanced and fair reimbursement strategy.
John Gilmartin (john.gilmartin@mitchell.com) is vice president of Product Delivery for Mitchell International, Inc., which offers medical bill review and compliance solutions for its property and casualty clients.



John Gilmartin is vice president of Product Delivery for Mitchell International, Inc., which offers medical bill review and compliance solutions for its property and casualty clients.

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