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Conclusion Introduction Michigan healthcare providers and their legal counsel must be prepared to address audits and appeals initiated by commercial payors.
Therefore, understanding potential commercial payor audits, steps to respond to audits, and challenge improper denials and appeals strategies are all critical skills that healthcare providers and their legal counsel should develop.
The following outlines the key types of commercial audits and the corresponding appeals processes that Michigan healthcare providers often encounter.
In addition, the following addresses key strategies for preparing for an audit, responding to an audit and strategic tactics to employ in the event of unfavorable claim denials. While every audit and subsequent appeal will have a unique set of circumstances understanding the basic strategies is important for both healthcare providers and their legal counsel.
Some audits are a result of random selection. Others result from data analysis that reflects that the provider may be outside the norm among their peers in the provision of services.
Regardless of the initial reason for the audit, it is very important for the provider to appeal the audit results in conformance with the BCBSM Disputes and Appeals process. Upon completion of the record review, BCBSM will notify the provider that the claims are either payable, partially payable, or denied.
The most common denials, by way of example, are denials based on lack of medical necessity to support the claim, pre-certification program rejections relating to length of stay or appropriateness of treatment setting, and recovery demands involving requests for repayment related to services unsupported by the Auditing and appeals paper medical record.
Written Complaint When BCBSM sends a provider a post-payment audit denial letter, the letter will make an overpayment demand and provide a time frame for recovery of the overpayment.
After receiving the audit results, providers must be careful to timely exercise their contractual appeal rights.
In addition to defending the audit on the substantive merits in the Written Complaint, which may include providing written medical summaries of the claims at issue focusing on the services that were denied and the medical explanation for why the services were medically necessary this may involve retaining a physician expert in some casesproviders may also take advantage of other legal defenses including: This conference may be held in-person or over the telephone.
The purpose of the informal conference is to discuss the audit results in an informal setting and to explore a possible resolution of the dispute. If the dispute involves medical-related matters then a BCBSM consulting doctor will participate in the conference.
Within 10 days following the conclusion of the informal conference, BCBSM will issue the provider with a decision. Importantly, if the provider elects judicial review for resolution of the dispute then any right to review by an External Peer Review Organization is waived.
However, once a provider initiates this external review process, the provider is required to complete it prior to seeking judicial resolution. Within thirty 30 days of the receipt of the written materials the Review Organization must issue its determination.
As stated above, the provider may also seek judicial review at the conclusion of Step Two in this contractual process in lieu of the Review Organization stage.
The process for appealing care management decisions is a two-step process, both of which are internal. Once the appeal request and supporting documentation are received, BCN has 30 calendar days to notify the provider of its decision.
A Level Two appeal enables the provider another opportunity to submit new or clarifying clinical information.
In addition, providers have the option to request that the Level Two appeal be performed by a different BCN physician reviewer from the physician who reviewed the appeal at Level One. Once issued, the Level Two decision is final, and the provider has no further appeal rights.
Appeal Administrative Denials Administrative denials are not based on the medical necessity of care, and can be issued by BCN without the need for review by a plan medical director.
Providers must submit the written appeal request within 45 calendar days of receiving the denial. In this case, the provider would be eligible to appeal under the process described in the previous section.
Appealing Clinical Editing Denials Additional claim denials are made by BCN on an automated basis through the use of clinical editing software that compares the procedures codes billed by providers against nationally accepted coding and billing standards to verify clinical appropriateness and data accuracy.
Commercial Audits and Appeals White Paper - Part 2 This publication is intended to serve as a preliminary research tool for attorneys.
It is not intended to be used as the sole basis for making critical business or legal decisions. This document does not constitute, and should not be relied upon, as legal advice.
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