5 simple steps can help cross-check payments
Question: How can I know for sure that my payer’s reimbursements are correct?
Answer: If a significant portion of your outpatient claims will be paid using APGs, you will probably want to invest in APG grouping and pricing software. If not, you can validate the payer’s calculations by manually grouping and pricing a sample of claims. Here are the steps:
• Select a well-rounded sample of claims from one month. Make certain the claims are typical for your facility, and include the most common significant procedures, medical visits, and ancillary services.
• Assign APGs to the claims. Group the claims using an APG reference manual such as the 3M Definitions Manual, Version 2.0 published by 3M Health Information Systems in Murray, UT. For every CPT code, assign a corresponding APG. For every medical visit claim, look up the primary diagnoses on the claim to determine the medical APG.
• Consolidate and package. Perform consolidation and packaging based on the consolidation and packaging requirements contained in the payer’s contract.
• Consult the payer’s contract. The contract will provide the following vital information: The APG relative weights, your facility’s payment rate, and the payer’s discount structure. You will need each of these three variables to calculate your payments.
If the payer makes additional payments for outliers, obtain the outlier dollar thresholds and outlier payment formula from the contract.
• Perform the final calculations. Once you’ve completed the APG assignments, multiply the relative weight of each APG on your claims with your facility’s adjusted rate (after any adjustments stipulated by the payer in the contract). Then multiply that product by the contract’s discount structure. The steps should look like this:
APG relative weight x Facility adjusted rate x Discount factor = Payment
If you only have one significant procedure on the claim, it will be paid at 100%, or zero discount. The second may have a 40% discount, depending on your payer’s discount structure.
You can use this method to hand-check a sample of claims to see whether you and your payer come up with the same figures. Compare your calculations with those on the payer’s voucher or remittance advice. If there is a difference, you should call the payer, and find out what accounts for the difference. Barring any benefit limits or maximums imposed by the payer, any hospital should be able to calculate the appropriate payment amount.
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