Why a little black box is generating a big fuss
Technology collides with claims denial rights
HCFA's attempt to license software for prospective prepayment edits of Medicare claims is setting up a confrontation with providers. The crux of the issue lies not in HCFA's use of the software to determine if a physician group's coding appears to be logical, reasonable, and medically necessary. Rather, the problem is the manufacturer's desire to keep the specifics of how its software works confidential - a concern that providers say may prevent them from knowing exactly why a particular claim was denied.
The software, named ClaimCheck, is manufactured by Atlanta-based HBO & Company.
"We call this 'black box' technology because the information goes in one end and a result comes out the other, but no one knows what happened in between. This means doctors end up in the dark as to why a claim happened to be denied, " says American Medical Association assistant director Jack Emery.
Before proceeding with any contracts, the AMA and other provider groups are lobbying HCFA to find ways to tell physicians why their claims have been denied - and what they can do to in the future to correct the problem - while still protecting HBOC's proprietary interests.
HCFA has defended the system, saying it could save Medicare some $465 million annually by spotting overpayments that presently slip through the system.
"We may not be able to release ClaimCheck edits because we do not own them outright," said HCFA administrator Nancy-Ann Min DeParle at a May 19 House of Representatives hearing that addressed the issue. "However, I believe we should provide enough information to physicians so that they are able to understand what our payment policy is."
One compromise floated by HCFA would be to permit a preselected group of representative physicians to review a "paraphrased" set of edits while still keeping the document's particulars confidential. This would allow physicians to give the general provider community an idea of how the software's general decision-making logic works without revealing too many specifics, says HCFA. However, the AMA is not very enthusiastic about this idea because it wants all providers to know specifically why the Claim Check program turned down any claim.
The software debate stems from HCFA's decision to augment its internal auditing procedures by contracting with private firms and individuals with specialized fraud-busting expertise.
Hoping to give the agency an added edge in ferreting out questionable claims, Congress authorized the use of private fraud and abuse investigators as part of the Medicare Integrity program (MIP) contained in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). These independent claims detectives will perform audits, medical reviews, and related functions outside the regular payment processing system.
While HIPAA set no specific deadline for hiring these outside fraud-busters, the General Accounting Office (GAO) has criticized HCFA for the fact that the first MIP contract is not scheduled to be awarded until January. Even then, it will be "limited in scope, covering only part of the work envisioned for program safeguard contracts," concluded a recent GAO report (Medicare: HCFA'S Use of Anti-Fraud Funding and Authorities, GAO/HEHS-98-160).
The fact that "HCFA has no firm plans regarding when it will expand the scope of this contract or award a second safeguard specialist contract" also troubles the GAO.
The bottom line: HCFA will only receive a fraction of the anticipated initial payoff from contracting with these anti-fraud commandos, finds the GAO report.
Of particular concern to both the GAO and congressional backers is the fact that the limited January contract does not include one of the new fraud tools originally scheduled for testing: a systematic review of all services provided by various providers to a single Medicare beneficiary in order to create a clearer claims profile.
In their defense, HCFA officials point to such things as the recent financial audit of Medicare and Medicaid operations by the Office of Inspector General that forced it to create a new process for soliciting and evacuating contractor proposals to reduce error rates; snafus in allocating funding; and unusually high turnover among its contractors as reasons for the delay.
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