Frequently Asked Questions Regarding The Identification and Recovery Process

1. What does HRI do?

HRI works on behalf of self-insured employers, Unions, governmental entities, and Trusts, that provide employee benefits. HRI identifies and recovers medical claim overpayments so that average working people and employers can afford health care coverage.

2. Why are you doing this?

It is well known that self-insured employers find it increasingly difficult each year to continue to offer affordable health care coverage to their employees. Employees are asked to bear more of the cost through premium, co-pay, and deductible increases even while benefits are being reduced. At the same time, studies continue to show that errors, abuse and fraud account for a significant amount of the dollars spent on health care; leaving the average employee struggling to afford health care coverage.

3. Is this identification and recovery process a health plan audit?

No, it is a third-party independent review of medical benefit plan paid claims to determine if any have been overbilled.

4. What law(s) allow you to do this?

Employers, Unions, and Trusts that provide employee benefits under the Employee Retirement Income Security Act, known as ERISA, are required to ensure that benefit plan assets are being spent appropriately and efficiently in accordance with the plan benefit design. These plans are regulated under Federal law and therefore are exempt from many state insurance laws. HRI helps these self-insured employers maintain their ability to provide health insurance to their employees.

5. Will this disrupt my health plan’s provider network?

The HRI process is designed to identify only providers whose billing practices are well outside of the normal range for any given provider specialty. In fact, as evidenced by our latest data runs for a client, an average of 5-8% of providers receive a letter regarding their billing practices. National statistics indicate that up to 20% of health care claims are billed incorrectly. HRI realizes that computer analysis is not 100% accurate, this is the reason that providers are encouraged to examine their own records before deciding to submit a refund or send in records to substantiate their billing. This process never touches the majority of providers and is designed to help employers continue to offer affordable health care to their employees.

6. How can you state that a claim has been incorrectly billed before you have looked at the medical records?

Medical record review is not required to establish a high probability of error. Sophisticated computer codes and programs alone can identify significant numbers of billing errors and are an accepted methodology for review of claim files. This is in fact the type of review performed by the Medicare Recovery Audit Contractor program known as the RAC. HRI’s process identifies those claims with the highest probability of overpayment and asks the provider to examine their records and take one of two actions. If the provider agrees with HRI's determination, they may submit a refund or if the provider believes the claim submission was correct, they should submit documentation to support the service billed. Whenever a service is performed and paid for, it is the individual or facility that was paid who must be able to justify the services for which they billed. When a self-insured employer pays for medical services for its employees, it has a responsibility to make certain the employee received the service that was billed. Without this watchfulness, the employer might soon find that they cannot afford to offer insurance to their employees.

7. Who does the review of submitted records?

HRI contracts with several companies that provide certified coding services. HRI has no financial control or ownership in any of these companies. Each company operates under a HIPAA compliant Business Associate Agreement and is paid on a per-record-reviewed basis. HRI agrees to abide by the outcome of the review regardless of whether the result supports or denies the claim. This is a more stringent arms-length standard than that maintained by health plans or by Medicare and Medicaid as they use their own employees to review claims. HRI does this so that the process will be fair and unbiased. The employer is only asking for the return of money that should not have been paid due to incorrect billing. These returned funds go to the employee benefit plan so that the employer can continue to offer affordable health care coverage for employees and their families.

8. Does the HRI process duplicate the claim review performed by our claims administrator?

Because the HRI process involves fully adjudicated and adjusted claims, there should be little or no duplication between the claim review performed by your claims administrator/health plan and HRI. We developed the identification and recovery process with an understanding of what medical benefit claim administrators already do during front-end and post-payment edits and audits. Whereas claims administrators and health plan audits focus primarily on duplicate claims submission errors, benefit design issues, and medical necessity review, HRI’s processes concentrate on billing errors. That is, whether the service or level of service billed was actually performed

9. What claim types do you review?

HRI examines the total data set of medical paid claims provided by a health plan carrier or third party administrator (TPA). All claim types are analyzed. Unlike many government program safeguard contractors or commercial audit firms, sampling or extrapolation techniques are not used. Every claim line is evaluated. Some examples of specific claim types are:

• Evaluation and Management of Outpatient Professional Services
• Chiropractic Services
• Physical Therapy/Occupational Therapy/Speech-Language Pathology/Podiatric Services
• Behavioral Health Services
• Inpatient Services (Medical)
• Inpatient Services (Surgical)
• Durable Medical Equipment
• Transportation Services
• Pharmacy/PBM Services
• Radiology

10. Approximately how many claims will be reviewed each year?

HRI analyzes every claim line of fully adjudicated and adjusted medical claims data as provided by the claims administrator. The total number of claims is dependant upon how many claims were submitted on behalf of the client’s subscribers. Typically, the first analysis is performed on all medical claims from the previous twenty four to thirty six months of data. After the initial data iteration, HRI begins a cycle of twelve month data refreshes. Each newly submitted set of data is trended against all of the previous data. Each data refresh enables the claim review process to continue thereby creating a constantly running engine that continually analyzes every claim line submitted.

11. What data or records do you require to perform your service?

Completed, fully adjudicated and adjusted, medical claims data are necessary for HRI to accurately analyze for medical overpayments. In order to conduct sufficient trending and multidimensional predictive modeling, 24 months of data are usually used to accomplish the first run of the HRI process. Medical records may be reviewed, at the request of the health care providers, in order to justify or dispute findings. These records are supplied by the providers and are handled in accordance with HIPAA and Privacy Act standards.