Frier Levitt has observed a rising trend among payors, such as Horizon New Jersey Health, Horizon Blue Cross Blue Shield of New Jersey, and United Healthcare, who are leading the way in New Jersey to place healthcare providers on pre-payment review. This practice is increasingly impacting specialists who perform high reimbursement procedures or who have few “peers” that they can be compared to by payor’s performing data analytics.
What is a Pre-Payment Review?
Pre-payment review is a process where an insurance carrier requests to examine claims and medical records submitted by a practice or provider before making payment. Unlike traditional post-payment audits, which review a wide range of claims, pre-payment reviews focus on specific codes or sets of codes. These codes are often chosen because they are high reimbursement codes or due to widespread misuse of the code in the industry.
The review typically starts with a vague letter from the insurer, highlighting a particular code or set of codes without providing detailed information. The letter may only mention generic terms like “billing code outlier” or indicate that a pre-payment review has started, with minimal guidance and no direct contact information for the reviewer. Oftentimes, providers are entirely unaware that they are on pre-payment review or being audited.
The Immediate Impact: Delayed Payments
The most immediate and tangible consequence of a pre-payment review is the delay in payments. These delays can span days, weeks, or even months, depending on the complexity of the review. For practices heavily reliant on the payor in question, such delays can quickly lead to cash flow disruptions, jeopardizing the financial stability of the practice and, in severe cases, threatening closure.
Failure to respond to these requests for records can also result in the pre-payment audit being converted to a full post-payment audit with an extrapolation.
Escalation to Serious Investigations
Even more concerning is the potential for pre-payment reviews to trigger further scrutiny. If discrepancies are identified during the review process, payors’ Special Investigations Units (“SIU”) may become involved, leading to post-payment audits and extrapolated overpayment demands. In severe cases, these reviews may escalate to external entities, such as the Medicaid Fraud Division (“MFD”) or insurance fraud prosecutors, potentially resulting in criminal investigations and charges.
This frustrating and often opaque process places a heavy operational and emotional burden on practices. Beyond financial strain, it threatens reputational damage and disrupts patient care delivery.
Our Proven Approach to Defense
At Frier Levitt, we employ a multi-faceted strategy to defend providers subjected to pre-payment reviews:
- Expert Coding Reviews: We work with vetted, independent expert coders to verify that all claims comply with coding standards and submission requirements.
- Proactive Appeals: We appeal every denied claim to minimize financial exposure and mitigate the risk of overpayment demands.
In addition, we have established strong relationships with payors’ Investigators, SIU, and legal teams. These connections enable us to work collaboratively to identify and implement efficient, mutually agreeable solutions.
Through this comprehensive approach, we have successfully removed physicians from pre-payment review in a relatively short timeframe, avoided extrapolated overpayment demands, and protected practices from further escalation. Our commitment to navigating these challenges ensures that providers can focus on what matters most, which is delivering high-quality patient care.
The Crucial Role of Legal Guidance
Legal professionals, especially those with expertise in handling payor audits, play a crucial role in defending against such actions. They help by facilitating effective communication with insurance carriers, ensuring that claims are properly documented, and verifying that physicians’ billing practices comply with payor coding requirements.
At Frier Levitt, our experienced healthcare attorneys are invaluable partners in navigating the complexities of pre-payment reviews. If you receive a pre-payment review notification, our dedicated attorneys are ready to assist in protecting your practice.
With a wealth of experience, our legal team offers a strategic, comprehensive approach to safeguard your practice’s interests. Contact us today if you receive a pre-payment review notification letter.
