What is a Pre-Payment Review and Why Does It Happen?

Both Medicare and private insurance plans use many different methods to identify and avoid incorrect or improper payments. The methods and tools used can vary depending on the review type, and whether they are used in the pre-payment or post-payment stage. 

Both are important, but understanding pre-payment review is the first step in understanding the beginning of the payment review process. Pre-payment review in particular can help prevent improper payments, saving money from day one.

What Is Pre-Payment Review?

The Medicare insurance pre-payment review is a simple step in the claims process. It is the review of a claim before it is paid by the insurer. In some cases, the pre-payment review can result in the denial of the payment. The pre-payment process includes medical review as well as the application of edits where needed. An edit can provide automatic verification of certain claim details, even across sets of claims, so make sure they meet the criteria for payment. Edits are applied by processors between submission and payment of claims.

When Is Pre-Payment Review Required?

Pre-payment review is when Medicare, or potentially any private insurer, wants to review all of the claims from a particular office or facility before they pay them.

This often happens when using a doctor, facility, or office that has had a history of claims that resulted in improper payments. In many cases this could be because they’ve submitted documentation that doesn’t support the coding, unnecessary services, billing inconsistencies, and more. Sometimes, payers determine that there is an anomaly in claims that is traceable to other providers in the region.

What Is The Pre-Payment Review Process?

In general, there are two primary types of pre-payment reviews, the complex, and the non-complex. The complex review is going to require documents aside from the claim itself, such as medical records or consultation to review the validity of the claim. The non-complex review isn’t going to require any additional documentation.

There are three criteria on which reviews are based. These are National Correct Coding Initiative edits, edits classified as Medically Unlikely, and Medical Review. Both the National Correct Coding Initiative edits and Medically Unlikely edits will generally be non-complex reviews.

Medical review, however, can be a relatively complex process. It will usually be performed by Medicare Administrative Contractors or Supplemental Medical Review Contractors, and the review contractors will focus Medical Review activities specifically on the already-identified problem areas, and will determine the action to take based on the severity. These actions can include:

• Pre-payment review
• Post-payment review
• Education or feedback for the healthcare provider

If the decision made is to enact pre-payment reviews, the insurer or payer will ask the provider to send pertinent records and other documents for any claims made within a predetermined time frame. In many cases the records period is three month’s worth, but in some rare cases they can go much further back.

Ending Pre-Payment Reviews

To remove pre-payment reviews, providers or coders should first review all of the pertinent medical records and double-check that all codes used are supported by the medical records. Additionally, they should make sure that their billing and coding department is adhering to the requirements of each insurer when actually assigning codes or creating billing claims. Coding and billing staff should also be trained to properly check for bundling and unbundling of codes.

AMS Solutions Can Help Prevent Pre-Payment Reviews

When it comes to preventing or avoiding pre-payment reviews, AMS Solutions can provide coding and billing professionals that are kept up-to-date and completely educated on all aspects of claims billing.