The Missing Link: Tying Bill Review to Utilization Review

Thursday, April 29, 2010 | 0

By Joe Paduda
Healthcare Strategy Associates

The comp industry spends millions on utilization review certifying a procedure, hospital stay, therapy, or treatment as 'necessary' or not. What most payers don't realize, or, more correctly, probably realize and don't discuss, is the reality that their UR systems are not linked to bill review platforms, so if the procedure/therapy/treatment is delivered and billed, in far too many cases it is paid.

That's not to say payers don't spend a lot of time, resource, and effort trying to link UR and bill review, but the 'link' is largely manual, requiring bill review processors to stop what they're doing, look at (in many instances) a different software application or database, interpret the free form text, and manually enter payment recommendations and explanation codes.

Which is a waste not only of administrative effort, but medical dollars as well.

I'd long heard about this, and seen it in many of the audits of managed care programs my firm conducted, but until I surveyed most of the largest payers in the nation last year I didn't fully grasp how pervasive this is. (if you want a copy of the survey do not leave a comment to this post, rather email info@healthstrategyassoc.com)

The problem

The current challenge facing all bill review application vendors is a limited ability to interface with UR software products in general. Most UR software platforms capture their decisions in a narrative form, in text or free-form fields. Therein lies the problem; UR decisions must be capable of being placed in a file format that computers can recognize. Moreover, each payer has their own unique approach, set of UR guidelines, interpretation of state UR rules, and customer requirements, making the integration of bill review and UR doubly difficult.

Potential solutions

Now two bill review companies are working to address that problem. Mitchell, which markets the SmartAdviser application, will be releasing an internally-developed service, entitled Utilization Review Decision Manager, that is designed to automate the feed of utilization review determinations. The idea is to enable customers to auto-adjudicate bills and individual services that up till now people had to research and authorize manually. The new app is slated to be on the market in July of this year; it is currently about to enter the testing phase. That's a very tight timetable, but SmartAdviser General Manager Nina Smith advised me in a call yesterday that Mitchell is committed to hitting the date.

The app, which is 'enabled' by SmartAdviser's Capstone business rules engine, uses a proprietary approach to group procedure codes into a treatment group according to diagnosis, the idea being approval of a carpal tunnel release includes 'approval' of related services - facility charges, PT, anesthesia, etc. Mitchell expects the app to increase 'throughput' (bills not touched by a reviewer) by about 17%.

Competitor Medata implemented their solution about a year ago; according to Cy King, Medata's chief executive officer, the company rolled it out with a very large retail client who is quite pleased with the results. So far, client savings have increased from 5% - 7% depending on the month. Components of the solution are provided by Datacare through their Bill Zee product.

King reported that Medata is currently working on several additional implementations.

I'd note that it is entirely possible the other bill review vendors (CompIQ, Stratacare Coventry) offer similar UR-integration functionality, but at least as of last summer, no one was using them.

What does this mean for you?

Hopefully more efficiency and lower medical expense. Hopefully.

Joe Paduda is principal of Health Strategy Associates, a Connecticut-based employer consulting firm. This column was reprinted from his blog, http://www.managedcarematters.com