It's a quandary every casualty adjuster faces: How much should Ipay on this claim? To land on the right figure, there are two keyconsiderations: liability and damages.

From a purely academic standpoint, in situations where aninsured was not liable, the damages should notmatter. Likewise, if an insured causes an accident and thereare no damages, then liability doesn't matter. Of course,reality is much different than academia and claims do get settledfor any number of business reasons, even if they aren'towed.

In the last edition of Blocking & Tackling, wefocused on comparative negligence and the million-dollar opportunities forcarriers who take the challenge to improve accuracy on liabilityassessment. Today, we focus on the damages aspect of the claimand another tremendous opportunity for third-party medical billreview.

When a demand for an injury is received, there will beconsideration for both special damages, providing compensation foreconomic loss, as well as general damages to compensate forpain and suffering. While both areas can be challenging, it isspecial damages that warrant particular scrutiny. Specials areoften used as a foundation upon which large demands for generalscan be made. In this day and age of upcoding, unbundling andother questionable billing practices, it has become more importantthan ever to conduct a thorough medical bill review.

After An Accident

Consider a demand received for a fairly typical accident in withthe insured making a left turn in front of the claimant causing$2,500 in property damage and a soft-tissue low-backinjury. There was no trip to the emergency room and theclaimant treatment consisted of an initial visit to a medicaldoctor for $500, a referral to a chiropractor with $10,000 intreatment, a referral to specialist for $700 and $6,000 indiagnostic testing. At first glance, that $17,200 claimfor medical specials seems pretty significant. A closer reviewof the medical bills, however, reveals that many of theCPT codes were inaccurate.

The initial treating physician billed $500 for CPT code 99205,which is a high-level office visit for a new patient requiringthree key components:

1) A comprehensive history

2) A comprehensive examination

3) Medical decision making of highcomplexity

A billing for this type of service typically occurs when thereis a serious condition during which the doctor spends at least 60minutes face to face with the patient. In this particularcase, an injury of lower complexity is reported. This means whatoccurred is “upcoding,” a fraudulent practice in which providerservices are billed for higher CPT procedure codes than wereactually performed, resulting in a higher payment by the insurancecompany.

When conducting the claims investigation, it is very importantto take steps to not only validate treatment, but to also obtaindetails from the injured party, such as a physical description ofthe medical clinic and provider; route driven to the clinic; and adescriptive summary of procedures conducted and the duration ofeach. During my tenure investigating claims, it was notuncommon for claimants to cite face to face time as a matter ofjust a few minutes.

After seeing the initial physician, the claimant is thenreferred to a chiropractor who bills 12 weeks of CPT codes97110 (therapy) and 97140 (manipulation). This is important,as there are only four true chiropracticCPT codes as follows:

98940 – Chiropractic manipulative treatment(CMT); spinal, one to two regions

98941 – Spinal, three to four regions

98942 – Spinal, five regions

98943 – CMT, extraspinal, one or more regions

The billing by the chiropractor in this case is an example of“unbundling,” as 97110 and 97140 would be included in thechiropractic manipulation code. It is important to notethat not all instances may be improper if the therapy ormanipulation was done as a standalone procedure.

The secondary issue is the run up of $10,000 in chiropractictreatment in such a short period of time, often necessitating arecords review for medical necessity and duration oftreatment. To most effectively identify proper coding,treatment and duration issues, carriers may benefit from utilizingmedical bill review services, coding experts and medicalprofessionals who have the training and knowledge ofthe National Correct Coding Initiative (NCCI) to identifyabuses.

The demand also includes diagnostic testing which was billed asCPT code 72148 for a lumbar MRI with contrast and 72149 for alumbar MRI without contrast. 72148 was billed at$2,400 and 72149 was billed at $2,600. These servicesshould have been billed at CPT code 72158 for a lumbar MRI with andwithout contrast material. The reasonable cost for thisbundled operation may have been $2,800. Again, paramount todetermining what is owed is a review of medical bills to determineupcoding and unbundling.

As I have discussed previously, digging into injurydemands is critical to the quality and accuracy ofoutcomes. Medical bills should be thoroughly scrutinized witha process that leverages medical knowledge and coding expertise tofocus on causation, relationship of diagnosis to treatment,frequency, duration and appropriateness of medicalbillings.

While claims vary in complexity, this is designed to provide abasic overview of what should be expected during the bodily injurydemand review. By taking the additional steps to execute onbasic blocking and tackling, carriers will create a competitiveedge as they transform their claims organizations from ordinary toextraordinary.

Christopher Tidball is a claims consultant and the author ofRe-Adjusted: 20 Essential Rules To Take Your ClaimsOrganization From Ordinary To Extraordinary! He has morethan 20 years of industry experience with multipleleading insurance carriers. To learn more, visit www.christidball.com or e-mail[email protected].