Healthcare Law Updates for EMS Managers: Prepay Review—Will Your Claim Stand Up?

Citing ‘errors,’ some Medicare contractors now wary of certain types.


Prepay Review: Will Your Claim Stand Up?: Feburary 2012

Last July, TrailBlazer Health, the Medicare contractor for Texas, adopted a policy of automatically denying claims for transports between private residences and freestanding dialysis centers. This move prompted outrage and created a dangerous situation for many patients whose transport benefit was being denied. After being challenged on this issue, TrailBlazer later adjusted its policy back to a prepayment review approach, which proved to have very similar results. This prepay review policy has since been expanded to include nursing-home-to-dialysis claims as well.

The effect of this policy is not an automatic denial; what it means is that you have to send in your full trip report and supporting documentation (mainly your PCS, or physician certification statements), which will be reviewed before payment determination is made. More often than not, due to the high bar many Medicare contractors have set for nonemergent ambulance coverage—and also in no small part to our industry’s lack of thorough documentation practices—this review results in denial of the claim.

More recently, First Coast Service Options, the Medicare administrative contractor (MAC) for Florida, announced a similar policy for claims involving hospital discharges to nursing homes. This policy resulted from a study done on the most common claims “errors” in Florida. According to First Coast, for the next 12 months, these transports will not be paid without going through review.

While these Medicare contractors have put the ambulance suppliers in their states on notice of their new policies, others have instituted similar policies without warning, and in some cases these seem to be unwritten policies the contractor will not even readily admit they are enforcing.

So, what rights do you have in the prepay review process? The answer to that is not very clear. Prepay review is authorized by federal regulation, and the process is almost totally at the discretion of the contractor. There is a requirement that there be an “error rate” sufficiently high to justify the prepay review, and the regulations seem to say this error rate must be found for an individual provider/supplier, not an industry as a whole. That prompts a question: How can First Coast apply this to everyone in the state?

I believe the answer to that is that because until you challenge them, Medicare contractors will often interpret rules liberally to get the result they wish to have. The prepay review process runs in three-month cycles, at the end of which your “error rate” should be redetermined and your status reevaluated. If your “error” has been fixed, you should be removed. If you continue to make the error, you should be provided with a summary of the contractor’s opinion on what you are doing wrong, and then you will be on review for another three-month cycle.

In my experience, this process is often not adhered to. Either you will not get the initial explanation of your “error rate,” or you will not get your quarterly reassessment. But again, unless you challenge this, nothing will happen other than your continued prepay review status.

Now, what can you do to avoid this nightmare? It’s simple: Don’t make errors! Of course, some of these “errors” concern matters of subjective analysis—for instance, the issue of medical necessity—and for these all you can do is paint as clear a picture as possible of why an ambulance was necessary for each and every transport you make. But for other “errors,” such as collecting signatures, getting documents dated correctly, coding levels of service correctly and using the proper origination and destination modifiers, you only need to understand what is required and make sure you are doing it. For example, I have written about several different signature requirements over the past few years, but I rarely review a company that is in 100% compliance with all the various signature rules CMS mandates.

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