Claims editing is a step in the claims payment cycle that involves verifying that physician-submitted bills are coded correctly. While claims-transaction systems have some native editing and duplicate checking abilities, these systems are designed to adjudicate claims. As such, even the most robust transaction systems need some help to avoid overpaying claims. Faced with the need for additional editing, payers should decide whether to build an internal editing system or outsource the responsibility to a third-party vendor.
Claims editing is a step in the claims payment cycle that involves verifying that physician-submitted bills are coded correctly. While claims-transaction systems have some native editing and duplicate checking abilities, these systems are designed to adjudicate claims. As such, even the most robust transaction systems need some help to avoid overpaying claims. Faced with the need for additional editing, payers should decide whether to build an internal editing system or outsource the responsibility to a third-party vendor.
When selecting a third-party editing system, payers have a number of options to choose from and strategic decisions to make.
Editing vendors typically have millions of edits in their systems. To simplify reporting and understanding, edits are often broken into rule categories that group similar edits together. In the past, editing vendors had internal medical teams that developed edits. These internal or proprietary edits were competitive differentiators in the market, but led to friction with providers over the lack of standards and accountability. Litigation forced payers to open up the basis for their edits. Now, editing vendors tout open-sourced edits from Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA).
Consider how the edit can be customized to reflect payer-specific reimbursement policies. Some vendors are only able to turn edits on or off. If payment policies are different across lines of coverage or geography, this can force a payer to manually review claims. In addition to source and customization concerns, many edits, such as new office visits, global surgery dates require reviewing a patient’s claims history to determine if the current claim was coded correctly. As such, an editing system should evaluate current and previously processed claims for more accurate results. A payer needs to understand how much, if any, claims history an editing solution can examine.
Edit maintenance is a specific challenge that payers should consider. Correct coding initiative edits are updated quarterly, current procedural technology/procedural codes are updated annually and CMS policy changes can occur at any time in a given year. Because of this constant change, payers need to have a strategy for keeping edits current. Payers should look for: fully sourced rules from the CMS, the AMA or other national standards organizations; as robust customization ability as possible – payers should specify granular requirements when reviewing vendors; the ability to edit against as much patient history as possible; a process for keeping edits up-to-date; a mechanism for making edits (and their sources) available to providers; and a comprehensive suite of analytics to determine ROI, trends and aberrant billing behavior.
Claims editing systems are either installed within the claims transaction system or offered in the software-as-a-service (SaaS) model. SaaS vendors sit outside the claims-transaction system and pass claims through a secure connection.
Payers are advised to check on which editing systems support integrations with their transaction system or if the editing vendors have relationships with the payer’s strategic partners, such as clearinghouses or repricers.
Lastly, payers should understand a vendor’s customer-support model. As reimbursement policies and regulations change and lines of business are added or dropped, a payer should make sure its changing needs are met. Customer support might also provide payer-specific ad hoc reports and support in the case of provider appeals.
Gary Twigg is president and CEO of Bloodhound Technologies.
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September 2009
