It's a quandary every casualty adjuster faces: How much should I pay on this claim? To land on the right figure, there are two key considerations: liability and damages.
From a purely academic standpoint, in situations where an insured was not liable, the damages should not matter. Likewise, if an insured causes an accident and there are no damages, then liability doesn't matter. Of course, reality is much different than academia and claims do get settled for any number of business reasons, even if they aren't owed.
In the last edition of Blocking & Tackling, we focused on comparative negligence and the million-dollar opportunities for carriers who take the challenge to improve accuracy on liability assessment. Today, we focus on the damages aspect of the claim and another tremendous opportunity for third-party medical bill review.
When a demand for an injury is received, there will be consideration for both special damages, providing compensation for economic loss, as well as general damages to compensate for pain and suffering. While both areas can be challenging, it is special damages that warrant particular scrutiny. Specials are often used as a foundation upon which large demands for generals can be made. In this day and age of upcoding, unbundling and other questionable billing practices, it has become more important than ever to conduct a thorough medical bill review.
After An Accident
Consider a demand received for a fairly typical accident in with the insured making a left turn in front of the claimant causing $2,500 in property damage and a soft-tissue low-back injury. There was no trip to the emergency room and the claimant treatment consisted of an initial visit to a medical doctor for $500, a referral to a chiropractor with $10,000 in treatment, a referral to specialist for $700 and $6,000 in diagnostic testing. At first glance, that $17,200 claim for medical specials seems pretty significant. A closer review of the medical bills, however, reveals that many of the CPT codes were inaccurate.
The initial treating physician billed $500 for CPT code 99205, which is a high-level office visit for a new patient requiring three key components:
1) A comprehensive history
2) A comprehensive examination
3) Medical decision making of high complexity
A billing for this type of service typically occurs when there is a serious condition during which the doctor spends at least 60 minutes face to face with the patient. In this particular case, an injury of lower complexity is reported. This means what occurred is "upcoding," a fraudulent practice in which provider services are billed for higher CPT procedure codes than were actually performed, resulting in a higher payment by the insurance company.
When conducting the claims investigation, it is very important to take steps to not only validate treatment, but to also obtain details from the injured party, such as a physical description of the medical clinic and provider; route driven to the clinic; and a descriptive summary of procedures conducted and the duration of each. During my tenure investigating claims, it was not uncommon for claimants to cite face to face time as a matter of just a few minutes.
After seeing the initial physician, the claimant is then referred to a chiropractor who bills 12 weeks of CPT codes 97110 (therapy) and 97140 (manipulation). This is important, as there are only four true chiropractic CPT 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 the chiropractic manipulation code. It is important to note that not all instances may be improper if the therapy or manipulation was done as a standalone procedure. 
The secondary issue is the run up of $10,000 in chiropractic treatment in such a short period of time, often necessitating a records review for medical necessity and duration of treatment. To most effectively identify proper coding, treatment and duration issues, carriers may benefit from utilizing medical bill review services, coding experts and medical professionals who have the training and knowledge of the National Correct Coding Initiative (NCCI) to identify abuses.
The demand also includes diagnostic testing which was billed as CPT code 72148 for a lumbar MRI with contrast and 72149 for a lumbar MRI without contrast. 72148 was billed at $2,400 and 72149 was billed at $2,600. These services should have been billed at CPT code 72158 for a lumbar MRI with and without contrast material. The reasonable cost for this bundled operation may have been $2,800. Again, paramount to determining what is owed is a review of medical bills to determine upcoding and unbundling.
As I have discussed previously, digging into injury demands is critical to the quality and accuracy of outcomes. Medical bills should be thoroughly scrutinized with a process that leverages medical knowledge and coding expertise to focus on causation, relationship of diagnosis to treatment, frequency, duration and appropriateness of medical billings.
While claims vary in complexity, this is designed to provide a basic overview of what should be expected during the bodily injury demand review. By taking the additional steps to execute on basic blocking and tackling, carriers will create a competitive edge as they transform their claims organizations from ordinary to extraordinary.
Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary! He has more than 20 years of industry experience with multiple leading insurance carriers. To learn more, visit www.christidball.com or e-mail chris@christidball.com.
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