Are You Overpaying for Emergency Department Level 5 Services?

December 18, 2020 HMS Marketing

Has your health plan examined its payments for Emergency Department level 5 services recently? If not, it may be time to take a closer look. Based on a recent analysis of data on file, HMS found that between 2012 and 2019, ED level 5 billing increased 215% on average.

According to the AMA CPT Guidelines, the clinical conditions appropriate for level 5 ER visits are those that are high severity and pose an immediate threat to life or physiologic function. The CPT code for a level 5 ER visit requires collection of comprehensive patient history, a comprehensive exam and high-complexity medical decision-making.

Yet, it’s not uncommon for physicians and facilities to code patient encounters for minor issues like ear aches, colds or constipation as level 5 ER visits (E&M code 99285). That translates into unnecessary overpayment for services by health plans.

ER Billing Compliance Doesn’t Have to be Costly and Time-Consuming

To address overpayments, health plans have traditionally used labor-intensive and time-consuming processes like reviewing medical records. Fortunately, a new alternative is now available – HMS’ ER Billing Compliance Review.

This purpose-built solution eliminates the need for chart pulls. It uses advanced analytics and algorithms to efficiently identify inappropriate level 5 ER billings based on information provided in the claim itself, such as diagnosis and procedure codes, previous and subsequent claim history, and more. Removing medical record review from the process reduces provider abrasion and also saves time for health plan staff.

With ER Billing Compliance Review, payers can fully deny the incorrect claim line payment or down-code, depending on their requirements. Health plans enjoy accelerated cost recovery and increased confidence that they are only paying for legitimate ER claims.

Clients Report Millions in Savings, Low Appeal Rates and High Uphold Rates

Multiple Medicare Advantage, Commercial and Medicaid MCOs have adopted HMS’ ER Billing Compliance Review in a post-payment model. The results thus far speak for themselves. Since HMS launched this offering, clients have identified over $100 million in savings. In addition, the average appeal rate is less than 2% of total claim volume and the original determination uphold rate is 97%. To date, clients have opted to use ER Billing Compliance Review in a post-pay environment. However, the concept can also be applied in a pre-pay model.

Experience suggests that ER Billing Compliance Review is having a long-term positive effect on billing accuracy. After providers receive a recovery letter from HMS identifying an inappropriate level 4 or level 5 ER claim, incorrect billing practices decrease within six months.

If you’d like to learn more about this innovative new approach to reducing overpayment for level 5 ER claims, contact us. HMS is committed to helping healthcare organizations reduce their costs and improve outcomes.

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