Case Studies

Issue: In a billing process known as unbundling, the provider was billing two separate CPT codes for MRI scans, one that represented the image without contrast (e.g. CPT-74150 abdomen scan) and one that represented the image with contrast (CPT-74160) rather than the appropriate combined “global” code (CPT-74170), which is an image without contrast followed by the introduction of additional images with contrast.

Findings: Through advanced data mining techniques, Connolly was able to identify multiple instances of unbundling. This was also applied to other types of MRI and CT scans where unbundling was taking place.

Financial Impact: Each unbundled claim represented an overpayment of approximately $1,500. The total impact in one year was nearly $750,000.

Solution: The payer was instructed to set system flags for potential CPT codes that might represent unbundling. Flagged claims could then be reviewed for potential overpayments. The payer also issued clarified instructions to providers to avoid future instances of unbundling.

Issue: A provider was mistakenly billing the health plan by the administered dose amount rather than by the proper billing unit. This seemingly innocent error cost the health plan hundreds of thousands of dollars annually in overpayments.

Findings: Connolly used data mining techniques to identify numerous cases where the dosage unit was being used incorrectly as the billing unit.

Financial Impact: The reimbursement for each dose of a high cost drug — pegfilgrastim (J2505) — should have been approximately $3,000, which meant the average payment for just one dose was overstated by approximately $15,000. The numbers added up quickly — with Connolly Healthcare identifying nearly $1 million in overpayments for this specific drug alone.

Solution: J2505 and other high cost drugs are a common cause of overpayments for many health plans. There are over 10,000 drugs with different indications and guidelines for appropriate use, creating the potential for significant billing errors and overpayments. Connolly helped the client to create a system to monitor billed units versus administered units, resulting in ongoing savings into the millions of dollars.

Issue: Our client was identifying cases where Medicare was the primary insurer, however not all claims were captured during the claims adjudication and eligibility update processes, resulting in some claims continuing to be paid incorrectly.

Findings: Connolly used datamining techniques to identify cases where, despite notes in the health plan’s system, claims were not coordinated.

Financial Impact: As a value-added service, Connolly provided analysis of the client’s claims to identify cases where Medicare was primary. The analysis identified potential future savings of $500,000 annually.

Solution: Connolly recommended ongoing review of instances where notes entries indicated other payer coverage but system flags might not have been applied appropriately. Connolly performed this service and trained client personnel to identify the error in the future.

Issue: Very often, private plan reimbursement rates are mistakenly applied to Medicare fee-for-service plans. Often, the Medicare rate is lower than it would be for a private plan.

Findings: Our client was reimbursing assistant surgeons at the private plan rate of 20% when in fact they should have been paid at the Medicare rate of 16%.

Financial Impact: By uncovering cases where the incorrect rate was applied, Connolly recovered over $450,000 in overpayments.

Solution: Connolly recommended that the client create a separate fee schedule for Medicare fee-for-service claims that takes into consideration the correct reimbursement rate of 16% versus 20%. By making this change in their fee schedule based on our recommendation, the client was able to eliminate hundreds of thousands of dollars going forward that would have been paid erroneously.

Issue: When a contract provides a case rate for a cardiac catheterization, the case rate reimbursement should include reimbursement for all component codes used to report the procedure. Many cardiac catheterization claims are overpaid because the claims system will pay an additional case rate on the component codes.

Findings: Connolly analyzed the payment data and found multiple payments being made under catheter placement codes, injection procedure codes, and imaging supervision and interpretation codes. In fact, only one payment should have been made under catheter placement codes. 

Financial Impact: Connolly recovered over $1 million in overpayments for multiple clients where incorrect payments were being made for component codes.

Solution: Connolly recommended the concurrency for the case rate be loaded as 100/0/0 rather than 100/50/25. This would prevent component codes from being paid in addition to the case rate.

Issue: CPT coding for Electrocardiographic (ECG) billing for monitoring longer than a 24 hour period requires that the bundled code be submitted, not the code for a single 24 hour period.

Findings: ECG services were being billed incorrectly due to the way CPT codes were entered in the provider’s system. Per CPT Coding Rules, 93236 should only be billed once within a 30 day period. When this procedure is done multiple times within a 30 day period, typically Code 93271 should be used.

Financial Impact: A Connolly auditor found that CPT Code 93236, for a single day occurrence, was submitted incorrectly by 16 different providers during a timeframe of approximately one year, resulting in over $1.2 million in overpayments.

Solution: Our client was informed of the issue and instructed to set system flags for the correct usage of these specific CPT codes to mitigate future errors. They could then flag erroneous claims in the system and work with providers to educate them about the issue and prevent future billing errors.

Issue: Our client was processing claims for cardiac catheterization procedures where CPT G0269 was billed on the claim. The client was reimbursing CPT G0269 as an ungrouped outpatient procedure when in fact the payment of this “bundled” code is included in the payment for the services to which they are incidental.

Findings: Connolly used datamining techniques and the coding knowledge of its staff to identify claims where this code was present and determined whether the contract and/or CMS guidelines supported payment. In 95% or better of the cases examined, while the code was appropriately billed, it was not subject to reimbursement.

Financial Impact: Recoveries were made in the amount of $829,000 and Connolly brought the claims to the client’s attention so future improper payments could be mitigated.

Solution: Connolly recommended system updates for the providers affected to ensure future payments would be correct.

Issue: Our client was processing implants and high cost drugs (HCD) at a percent of charges based on provider billed charges. The managed care contract included a provision that  the percentage of charge paid for the HCD could not exceed the provider cost.

Findings: Invoices for implant and high cost drugs were requested and audited, and instances of reimbursement exceeding the provider’s cost were identified. In some instances, the markup was as much as 500%.

Financial Impact: Connolly used datamining techniques to identify contracts that have implant and high cost drug (HCD) cost limitation language. The contracts were screened to capture verbiage such as “to pay implants and HCD without exceeding the invoice cost.”

Solution: Connolly guided the client through an audit methodology to uncover irregularities, ensure providers were in compliance with their contractual cost limitations, and that appropriate adjustments to percentage-of-charge cases were being made accordingly.

Issue: In the case of coverage by two payers of a dependent, the “Birthday Rule” calls for payment of a claim to be made by the parent whose birthday falls first in a calendar year.

Findings: Connolly isolated claims where a patient’s parent existed who was not the subscriber and had a birthday that fell first in the calendar year. The auditors then researched whether the parent had other coverage that provided benefits for the dependent.

Financial Impact: When a Connolly auditor uncovered a claim that was the responsibility of another payer under the birthday rule, a recovery was made for $2,164,807.

Solution: Connolly recommended the insurer review dependent claims for instances where a parent existed who was not a subscriber and whose birthday preceded the subscriber’s during the calendar year.

Issue: Connolly reviewed ER charts on a pre-pay basis to determine if a large national healthcare system was appropriately billing for related services. Without uniform emergency room billing/payment criteria, facilities within this health system routinely billed the client using a variety of point systems and other private, non-disclosed ER guidelines, making accurate payment processing difficult and inconsistent.

Findings: Connolly uncovered that 13% of ER charts reviewed were found to have billing errors. The prepayment reviews were conducted using the provider's own criteria or by using the American College of Emergency Room Physician's guidelines for facilities.

Financial Impact: The claims reviewed on a pre-payment basis resulted in $1.1 million in direct cost avoidance. More importantly, the client obtained the payment intelligence necessary to understand the providers’ billing practices.

Solution: Connolly’s recoveries were used to demonstrate the erroneous costs in the structure of the provider contracts, leading to the client renegotiating terms related to emergency room payments with approximately 54 hospitals.

Issue: Both Medicare and generally accepted billing practices indicate multi-use vials are not subject to payment for discarded amounts of a drug or biological (Medicare Claims processing Manual, Chapter 17, section 40).  Providers may inadvertently bill for an entire vial when in fact only the administered drug amount should be billed.  This error can cost health plans hundreds of thousands of dollars annually in overpayments.

Findings: The payer was being billed for the entire multi-use vial of a high cost cancer injection rather than the administered dose.  Discarded amounts of the drug should not have been billed.

Finacial Impact: More than $250,000 was recovered from just one provider.  In addition, the health plan realized $125,000 per year in future savings as a result of the provider correcting their billing practice for this drug.

Solution: Errors can occur when dosage units are billed incorrectly, or are not billed in accordance with Medicare and /or generally accepted billing practices.