How do I know if I’m being paid what I should be paid?  The question can be overwhelming and the answer involves more than a few factors.  To determine if you were paid what you were entitled to, begin with a narrow view and work your way out to the details as the process leads.

First, clarify what you’re looking for.  Expected contractual reimbursement is based on fee schedules or allowed amounts and not simply the insurance payment amount.  A claim may be allowed yet not paid because the insurance carrier deems the patient responsible for deductible or co-insurance, for example.  You need reporting that provides charge amount and contractual adjustment on adjudicated transactions in order to calculate the actual allowed amount.  Group by insurance then same procedure code and compare the actual allowed amount to the contracted/expected fee schedule amount.

Now, if the actual is less than the expected amount, here is a hierarchy of steps to follow before you conclude additional reimbursement is due.   This list is not all-inclusive but should point you in the right direction and will require you to become well-versed in the details of your contracts.

1. What is the location of service on the claim?  Office or facility?  Medicare and many commercial insurance carriers include a site-of-service fee schedule differential.  This means a provider is allowed a higher rate for services rendered in the office than in a facility setting.  Did you use the accurate contract allowed amount for the location billed?
2. Ok, you’re confident you pulled in the correct site-of-service amount.  What about the provider type?  Some insurance carriers allow a lesser amount for services rendered by a non-physician provider (Physician Assistant, Nurse Practitioner, etc) than for a physician.
3. Alright, step 1 and step 2 checks out, now what?  Next, let’s look at modifiers.  Specifically, modifiers that affect pricing, such as 26, TC, 50, 53, 62, 80, to name a few.   The insurance carrier’s policy regarding pricing modifiers may not be covered in your contract, which means you must go to the provider manual or published payment policies on their website.
4. So, you’ve considered site-of-service differential, non-physician versus physician fee schedule rates, applied any reductions based on pricing modifiers and the actual allowed amount is still less than the contract/expected amount.  What’s left?  Look to insurance carrier policy that applies additional discounting, such as multiple procedure/multiple endoscopy discounts, frequency limits, and maximum units.

If these steps do not bring you to a balance between the actual and contracted/expected allowed amount, get in touch with the insurance carrier for more details on the reason for payment reduction.  If this is an anomaly on one claim you may have identified an error and should request additional payment.  If you uncovered a pattern, you need to work with your insurance carrier to resolve.  One benefit of this analysis is the opportunity to identify in-house coding and billing errors and implement corrective action going forward.

Failure to routinely check paid amounts against what is owed means the practice is leaving monies on the table…..dollars that your practice is owed.  This  step of revenue cycle management is critical for your ongoing review of accounts receivables.

Written by:

Robin Gluchaki, CHCO, CPC
Associate Consultant
Medical Management Services