Medical providers have invested time and money to ensure they are compliant with the evolving billing regulations, but increasing audits make E&O claims more likely. Gareth Tungatt of Ascent Underwriting has some solutions.
All healthcare providers share the same billing processes whether collecting reimbursements from commercial insurance companies or government-sponsored programs such as Medicare and Medicaid.
The reimbursement process is the coding, submission, transaction and request to a health benefit plan of a claim to receive payment for the medical services undertaken. There is a comprehensive set of rules and regulations which healthcare providers who are submitting such claims must follow, in order to provide their services aptly, and ensure that there is no breach of confidence while maintaining patient records.
Since 2005, healthcare providers have been urged to send their claims electronically in compliance with such rules in order to receive a reimbursement. The Health Insurance Portability and Accountability Act (HIPAA) has led to the adoption of certain standard transactions for electronic data interchange (EDI) of administrative healthcare data.
Under HIPAA, if the provider or insurance provider conducts one of the adopted transactions electronically, they must use the adopted standard; they must adhere to the content and format requirements of each transaction. Under the act the Department of Health and Human Services (HHS) also has specific code sets for diagnoses and procedures to be used in all transactions.
Tightening the reins
As far as the healthcare industry is concerned, amendments to regulatory frameworks over the last few years—mainly arising from the government looking to crack down on monies lost through internal inefficiencies—have caused a significant tightening of the billing and coding process between a healthcare provider and the insurance company paying the claim, or governmental agency where Medicare or Medicaid is involved.
As a result, medical providers have spent many thousands of dollars on new technology and have been forced to redesign business processes and software to ensure that they become and remain compliant with the evolving frameworks. While there are now rather strict compliance structures around the billing practices, the authorities are pursuing practices that overbill, miscode, or have undertaken abuse or general fraud against any such healthcare plan, often by utilisation of their powers under the False Claims Act.
These pursuits are often initiated in the form of a request by agents in the Special Investigation Unit (SIU), with assistance from clinical ‘consultants’, to review a practice’s processes and procedures by means of a Post Payment Audit which is defined as “an investigation by a health benefit plan, insurance carrier, or agent thereof regarding whether a claim was properly previously paid.”
These audits often occur, in part, due to the impact of State Prompt Payment Laws, where claims are generally adjusted electronically and paid without rigorous diligence, aside from the procedures and pre-certification processes.
If the data on the reimbursement form ‘adds up’ the claim will often be paid without further question. When these claims are reviewed and audited at a later date, it is not uncommon that errors in the form of overpayments are uncovered.These overpayments can range from mistakes, such as improper diagnosis or procedure code selection, to the nefarious, such as billing for services that were never provided or even purposely misrepresenting the nature of services actually rendered to increase payment.
Whereas historically the process relating to the instigation of an audit tended to surround the investigation of fraud and abuse through random claims audits and traditional investigatory techniques, data profiling, the enhanced use of technology platforms and data aggregation have turned the focus firmly on to statistical outliers to identify improper payments, regardless of whether fraud or abuse enters the equation, and the industry is therefore seeing an increased frequency surrounding audits of past billing.
Audits are occurring on a less random basis than previously and more as a result of a highlighted fact or inconsistency when comparing submitted data and claims for reimbursements from peers acting within a similar space against industry benchmarks.
However, in addition to provider profiling, audits are often brought following a complaint from a former employee or disgruntled patient, the claims made in a practice’s advertising or the submission of claims for family members or employees, which may be prohibited in a payer’s services agreement.
Medical billing insurance covers an amount which a healthcare provider is legally obliged to pay as a result of a claim brought against it. This could include sums paid as awards, judgements, settlements, and civil fines and penalties imposed by a governmental entity. Where a commercial insurance company is involved this could be as a result of an actual or alleged erroneous submission or claim being made to a government health benefit payer or program or a commercial payer from which a payment or reimbursement for medical services is being sought. Coverage is also provided for violations of civil, federal, state or local anti-kickback or self-referral laws, or any rules or regulations.
Against this backdrop of increasing compliance and regulations surrounding the healthcare billing and coding practices, it is not surprising that errors and inaccuracies in claims submissions are common. However, these practices are finding themselves at the forefront of investigations and potential liabilities which can be costly.
One of the ways to protect against such liabilities is the purchase of a medical billings errors and omissions (E&O) policy to provide adequate risk transfer. We have seen a significant take-up rate of first time purchasers over the last 12 months as practices seek ways to limit their exposures.
Ascent Underwriting launched its CyberPro Medical Billings coverage in 2013 in response to the tightening of the billing and coding processes affecting US healthcare providers of all sizes.
With authorities actively pursuing practices that are not billing, coding or processing healthcare claims correctly, the CyberPro E&O insurance product was developed to minimize the potential financial threat of both the healthcare data protection risk and the business risks associated with non-compliance to the HIPAA billing legislation, including reimbursement for billing audit investigations and regulatory fines or penalties.
The policy is based on a modular concept and combines insurance coverage for billing errors and omissions with a comprehensive network security coverage to protect against HIPAA data protection legislation.
The coverage has various key elements including qui tam investigations and reputational harm. In addition, there are a number of complementary risk management solutions, compliance and assessment tools.
Data breach management specialists and a panel of expert legal representatives are available in the event of receiving notification of an action or following the occurrence of a data breach, as part of the policy.
The main reason for medical billings insurance being established ties back to the increased regulation and documented process surrounding industry compliance, transparency and, of course, best standards which ensure there is little room for incorrect or fraudulent business practices.
Utilising coverage for the key areas of risk such as violations of HIPAA and EMTALA regulations provides an important backstop and additional level of protection against the real financial exposures healthcare providers are facing.
Gareth Tungatt is chief underwriting officer, Ascent Underwriting.
Errors and omissions, Ascent Underwriting, Gareth Tungat