As part of Palmetto GBA’s role as the Railroad Medicare Specialty Administrative Contractor (RRB-SMAC), we are charged with examining the reasonableness and medical necessity of the services being billed. This process is called ‘Medical Review’. Because Medicare processes millions of claims each year, it isn’t feasible to look at every single claim providers submit. Instead, Medicare and Railroad Medicare use data analysis and information from other Medicare Contractors to find claim types that have high billing error rates.
‘Billing errors’ can mean the claims are not filed correctly, the services were not reasonable and clinically medically necessary, or the services have not been documented correctly to meet Medicare’s guidelines. Medicare employs several contractors to do this function, such as the CERT (Comprehensive Error Rate Testing contractor), the RAC (Recovery Audit Contractor), the ZPIC (Zone Program Integrity Contractor), as well as the Medical Review units at each local Medicare contractor, including Railroad Medicare.
The Medical Review process works like this: the contractor conducts data analysis and creates an action plan outlining what types and how many claims the unit proposes to take on for the year. The plan is approved by the Centers or Medicare and Medicaid (CMS) or the Railroad Retirement Board (this is necessary for the RRB-SMAC). Some of the topics our Medical Review unit examined in the past year were:
• Chiropractic Services
• Radiology (Chest X-Rays)
• Ambulance Transports (emergency and non-emergency services)
• As well as drugs and biologicals, doctors’ office visits, and several other claim types
As the claims are submitted, a random sampling are chosen by a computer program, and letters are sent to the providers requesting documentation to support the claim. Doctors have 30 days to respond to these letters. If they fail to respond by the 45th day, their claim will automatically deny. When this happens, the provider has 120 days to submit the requested documentation for review.
Once the Medical Review team has the documentation needed to examine the claim, they have to determine if the services were covered by Medicare, if they were clinically medically necessary, and if the documentation meets the standards required by CMS. If all of these criteria are met, the claim is processed to pay. If they are not met, the claim is denied, and the provider has 120 days to file an Appeal. An appeal is a new and independent review of the case, and it is not conducted by the person who reviewed the claim originally.
If you see that a claim for a service you received has been denied, read your MSN carefully. If the service is not covered by Medicare, or is determined to not be medically reasonable and necessary, then the patient is responsible. If the service was denied because the provider failed to supply the necessary documentation, then the claim denies and the provider is liable. If the provider is liable, he or she cannot charge you or collect payment from you for that claim.
