By Lief Goodson, Senior Vice President of Analytics, Xerox Workers’ Compensation Solutions
We believe there’s quite a bit of savings to be obtained from nurse audit of workers’ compensation medical bills, so recently we ran a retrospective analysis of all medical bills we processed between 1/1/2016 and 5/31/2016 for a subset of clients who utilize our nurse audit program.
While savings varied by state and service, we found that medical bill audits performed by licensed nurses yield additional cost savings and value on an array of bills, not merely complex bills, hospital bills, or bills with high-dollar thresholds as you might expect. Our data analysis showed that nurses are just as likely to have an impact on bills between $250 and $500 as those between $50,000 and $100,000.
So, what services did nurse auditors target on those relatively low-value medical bills, and what was the provider’s response? Did they accept the lower rate or did they ask for reconsideration?
The most common services reduced by our nurse auditors on bills between $250 and $500 were office visits. Because CPT codes for mid-level severity/duration office visits are among the most frequently billed codes under workers’ compensation, it wasn’t surprising to see them top the list of services most often reduced by nurse auditors. What was more interesting though, was the provider’s willingness to accept lower reimbursement rates for these services. When nurse auditors changed these mid-level visits to lower severity codes, providers accepted lower payments almost 97 percent of the time. Likewise, providers accepted the correct coding of high-severity and prolonged office visit codes about 92 percent of the time.
Physical Therapy Services
Nurse auditors didn’t just question office visits on these smaller medical bills, they also scrutinized common physical therapy services. While office visits were often downgraded to a lower severity code, this was not the case for physical therapy codes. Nurse auditors denied many of the physical therapy services listed on low-dollar bills based on medical necessity, reasonableness or proof of service. These denied services included:
- Physical therapy re-evaluations
- Manual therapy
- Therapeutic activities self-care/home management training
- Hot water bottle, ice cap or collar, heat and/or cold wrap
Other codes regularly denied by nurse auditors included report and chart codes as well as supply codes for the items like alcohol wipes, electrodes, light compression bandages, and other miscellaneous supplies. Charges for muscle range of motion measurements were also repeatedly rejected on lower value bills, with nurse auditors typically citing inadequate proof of service as the reason for denial.
Physical therapy providers asked for reconsideration on about 16 percent of the physical therapy services denied by nurse auditors – a much higher rate than office visit providers.
Facility Bills and Nerve Conduction Studies
While nurse auditors made many significant reductions on bills ranging from $250 to $500 in total charges, they were also responsible for “big bang” reductions on high dollar bills, too. Nurse auditors reviewing high-dollar facility bills had a substantial impact – averaging more than $3,000 in reductions for the following common revenue codes (provider acceptance rates are noted in parentheses):
- General medical/surgical supplies and devices (86%)
- Sterile supplies (89%)
- General operating room services (97%)
- General ambulatory surgical care (90%)
Nurse auditors also averaged $1,000 or more in reductions on evaluated bills with nerve conduction studies; the provider acceptance rate was over 99 percent.
It’s important to note that on all bills with nurse audit reductions, providers accepted the reductions 94 percent of the time without asking for a reconsideration of allowance or payment. This provider acceptance rate was almost the same as the provider acceptance rate for bills without nurse audit reductions, which was about 95 percent.
Bottom line, it doesn’t matter what type of bill or whether the reductions are on low-value services or on select high-value bills, the nurse audit process brings real value with widespread provider acceptance.
About Lief G. Goodson
Lief G. Goodson is the senior vice president of analytics for workers’ compensation solutions at Xerox. His key areas of focus are analytics and technology, particularly the development of data systems, reporting capabilities and predictive modeling applications. He is currently responsible for strategic planning, innovation and quality assurance in all service areas. Contact Lief at firstname.lastname@example.org.
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