09072010 HEALTH CLAIMS AUDIT' II I I
,. .
9/7/201U
Healthcare
Horizons
Cansulting Group, inc.
Optima Health Claims
Audit Report
September 7, 2010
Summary of Recovery
Audit Overview
• Purpose: Identify claim errors resulting in
incorrect payments and to assess
underlying conditions contributing to any
errors identified.
• Scope: Review 100% of claims processed
by Optima with paid dates March 2009
through December 2009 totaling $61 M
($36M Schools and $25M City).
City
a
1
• In addition, overpayments totaling $23,112 were found
to be recovered after the data extract but prior to the
delivery of the claims. 3
9/~/zo~~
School
Findings
• The amount of errors identified in the
sample indicates that Optima has effective
procedures in place to prevent duplicate
payments.
• Identified two members with claims paid
incorrectly as primary.
• Identified overpayments for missed
multiple procedure reduction opportunities
due to fragmented billing by providers.
Areas of Testing
• Duplicate Claims
• Eligibility
• Contract Audit
• Assistant Surgeon
• Multiple Procedure
Reductions
• Benefits
• Pricing
• Other Insurance
• High Units
• Medical Edits
• Overlapping Inpatient
• Subrogation
• Hospital Mistakes
• Cosmetic Surgery
• Reinsurance
Findings
• Optima has process in place to identify
and recover claims affected by retroactive
eligibility terminations.
• Identified instances where the $100
outpatient copayment was not applied.
• Found that the $20 Primary Care
Physician office visit copayment is not
taken when the $100 annual deductible is
taken on same claim.
2
9/7/201(1
Findings
• Identified a member eligible for Medicare
Part B who did not elect to pay for the
coverage
• Disagreed with 2 examples of outpatient
therapy where separate episodes of care
were authorized by Optima.
Findings
• Optima is now utilizing two external audit
vendors through its Special Investigations
Unit that perForm overpayment
identification similar to Healthcare
Horizons.
• Healthcare Horizons did not identify other
areas of concern for systems
overpayments.
„
Findings
• Based on site visit claims, Optima's policy
for secondary claims is to pay the member
liability from the primary payer's
explanation of benefits regardless of the
contract allowable by Optima on the claim.
• Contract audit did not yield any agreed
overpayments, but three cases of facility
multiple procedure errors were identified
on last audit & recovered before site visit.
,o
Recommendations
1. Discuss options with Optima for cases when a
member is eligible for Medicare Part B but elects not
to take it. Many plans estimate what the Medicare
benefit would have been and reduce their secondary
payment using the estimate. This prevents members
from having an mcentive to opt out of paying for
Medicare Part B due to the plan covering all such
claims in full.
2. For secondary claims, explore the possibility of limitin
the entire combined payment (primary and secondary}
up to Optima's normal contractual allowable. This is a
common limitation in many plans audited by
Healthcare Horizons.
,z
3
9/7?201C ~
Recommendations
3. Clarifv the intent of the plan on whether to charge the patient
an office visit copayment when a deductible is also due.
Typically, Healthcare Horizons would expect the copayment
to apply first in such a scenario and then the deductible for
any remaining plan payment due.
4. Define the criteria used by Optima to determine when a
separate illness or condition exists for the purposes of
granting separate authorizations for outpatient therapy
services.
5. Determine a solution to prevent overpayments caused by
multipie claim submissions by providers for surgeries
performed during the same operative session.
6. Monitor the recovery of claims due to retroactive terminations
on a monthly basis.
13
Conclusion
• Whilethe audit has produced meaningful
recoveries for the City, the percentage of
overpayments compared to the total paid
amount in the data is very low.
• Optima should be commended for performing at
a high level in the administration of healthcare
claims for the City.
• Overall results represent exceptional
performance by Optima in the administration of
healthcare claims.
4
~HE CITY QF ~IRGINIA E3EAGH AND
THE SGHQQL ~Q~4RD OF THE CITY
QF VIRGINIA E~EACH
OPTIMAHEALTH
CLAIMS AUDIT REPORT
August 27, 2010
Heaithcare
Horizons
Consulting Group, Inc.
- Healthcare
Horizons
Consulting Group, Inc.
TABLE OF CONTENTS
CITY QF ~f lRGIN1A B-EACH
CLAIMS AUDIT REPORT
Executive Summary ..............................................................................................
Process Overview ................................................................................................. 4
Areas of Testing .................................................................................................... 5
Site Visit Selection ...............................................................................................11
Findings . . .. .. .. ... .. . . . . . . ... . . ... .. . . . . . . ... .. .. . .. . . . .. .. .. . . . . . .. .. . . ... . . . . . . . . .. .. .. ... . . .. . . . ... . . . . .. . . . . .. .. . . .12
Conclusion ...........................................................................................................16
Site Visit Detail .................................................................................... Appendix A
Out-of-Sample Claims ......................................................................... Appendix B
Optima Response ................................................................................. Appendix C
August 27, 2010 Page 1
- Healthcare
Horizons
Consulting Group, Inc.
CITY OF VIRGINIA BEACH
CLAIMS AUDIT REPORT
EXECUTIVE SUMMARY
The City of Virginia Beach engaged Healthcare Horizons to perform an audit of claims
processed by Optima for paid dates of March 2009 through December 2009. Healthcare
Horizons received $61,380,761 in paid claims data from Optima and performed a full
electronic review of claims processing. Of this total amount, $36,163,884 was paid for school
membership and $25,216,877 for the city. The purpose of the audit was to identify claim
errors resulting in incorrect payments and to assess underlying conditions contributing to
any errors identified. A site visit was conducted the week of June 28, 2010, to review a
sample of 225 claims selected by Healthcare Horizons as potential errors or as higher dollar
claims needing review. In addition, Healthcare Horizons was provided access to the top
fifteen paid facility contracts during the site visit in order to test pricing and contractual
terms. The contract audit resttlted in 4 additional write-ups for a total of 229 audit items.
All audit items were resolved by the end of the site visit.
Healthcare Horizons identified a total recovery amount of $24,732 from the audit. In
addition, overpayments totaling $23,112 were found to be recovered after the data extract
but prior to the delivery of the claims. These are not included as audit findings, but they are
notable for the City as they represent continued errors that should be monitored on an
ongoing basis. The findings by category are as follows:
ther Insurance
.
.
$9,097.42
..
.
.
$0.00
. •
.
.
$0.00 ..•
.
.
.
$0.00
. ~
. .
. .
$9,097.42
Multi le Procedure Reductions $2,181.52 $0.00 $81.26 $6,242.15 $2,262.78
Out atient Thera Benefit Ma~cimum $5,407.25 $0.00 $0.00 $0.00 $5,407.25
Du licates $4,015.03 $1,160.75 $0.00 $0.00 $4,015.03
Out atient Sur e Co a $800.00 $0.00 $1,400.00 $0.00 $2,200.00
Seconda Pa ent Hi her Than Prima $1,188.00 $0.00 $0.00 $0.00 $1,188.00
Eli ibilit - Afrer Termination $265.35 $10,504.95 $0.00 $0.00 $265.35
Out atient Durin In atient $101.20 $0.00 $0.00 $0.00 $101.20
Emer enc Room Co a ment $100.00 $0.00 $0.00 $0.00 $100.00
Assistant Sur eon Multi le Procedures $95.26 $0.00 $0.00 $0.00 $95.26
Contract Audit $0.00 $5,204.00 $0.00 $0.00 $0.00
$23>251.03 $16,869.70 $1,481.26 $6,242.15 $24,732.29
August 27, 2010 Page 1
- Healthcare
Horizons
CITY OF VtRGIN1A BEACH
ConsultingGroup,~~c. CLAIMS AUDIT REPORT
The tables below detail the findings between the city and school membership:
citv
ther Insurance
~
$0.00
.
~
•
$0.00 • .
•
$0.00 • . .
~
.
$0.00
.
$0.00
Multi le Procedure Reductions $80.13 $0.00 $0.00 $1,798.11 $80.13
Ou atient Thera Benefit Maximum $5,407.25 $0.00 $0.00 $0.00 $5,407.25
Du licates $1,986.41 $0.00 $0.00 $0.00 $1,986.41
Ou atient Sur e Co a $300.00 $0.00 $100.00 $0.00 $400.00
Seconda Pa ment Hi her Than Primaz $1,188.00 $0.00 $0.00 $0.00 $1,188.00
Eli ibili - After Termination $215.75 $6,966.89 $0.00 $0.00 $215.75
Ou atient Durin In atient $101.20 $0.00 $0.00 $0.00 $101.20
Emer enc Room Co a ment $100.00 $0.00 $0.00 $0.00 $100.00
Assistant Sur eon Multi le Procedures $95.26 $0.00 $0.00 $0.00 $95.26
Contract Audit $0.00 $2,427.00 $0.00 $0.00 $0.00
$9>474.00 $9,393.89 $100.00 $1,798.11 $9,574.00
Schools
ther Insurance
.
•
$9,097.42
..
. •~
.
$0.00 • .
.
~
.
$0.00 • ~ ~
.~
. •~
•
$0.00
. ••
. ..
• •.
$9,097.42
Multi le Procedure Reductions $2,101.39 $0.00 $81.26 $4,444.04 $2,182.65
Ou atient Thera Benefit Maximum $0.00 $0.00 $0.00 $0.00 $0.00
Du licates $2,028.62 $1,160.75 $0.00 $0.00 $2,028.62
Out atientSur e Co a $500.00 $0.00 $1,300.00 $0.00 $1,800.00
Seconda Pa ent Hi her Than Prima $0.00 $0.00 $0.00 $0.00 $0.00
Eli ibili - After Termination $49.60 $3,538.06 $0.00 $0.00 $49.60
Ou atient Durin In atient $0.00 $0.00 $0.00 $0.00 $0.00
Emer enc Room Co a ment $0.00 $0.00 $0.00 $0.00 $0.00
Assisrant Sur eon Multi le Procedures $0.00 $0.00 $0.00 $0.00 $0.00
Conuact Audit $0.00 $2,777.00 $0.00 $0.00 $0.00
$13,777.03 $7,475.81 $1,381.26 $4,444.04 $15,158.29
While this audit has produced meaningful recoveries for the City of Virginia Beach, the
percentage of overpayments compared to the total paid amount in the data is very low.
Based on our experience in the industry, Optima should be commended for performing at a
high level in the administration of healthcare clauns for the City of Virginia Beach.
Based on the findings of the audit, Healthcare Horizons ofFers the following
recommendations for the City of Virginia Beach regarding the administration of its
healthcare pla:n:
August 27, 2010 Page 2
- Healthcare
Horizons
Consulting Group, Inc.
CITY ~F ~/tRGIN1A ~EAGH
CLAIMS AUDIT REPORT
• Discuss options with Optima for cases when a member is eligible for Medicare Part B
but elects not to take it. Many plans estimate what the Medicare benefit would have
been and reduce their secondary payment using the estimate. This prevents members
from having an incentive to opt out of paying for Medicare Part B due to the plan
covering all such claims in full.
• For secondary claims, explore the possibility of limiting the entire combined payment
(primary and secondary) up to Optima's normal contractual allowable. This is a
common limitation in many plans audited by Healthcare Horizons.
• Clarify the intent of the plan on whether to charge the patient an office visit
copayment when a deductible is also due. Typically, Healthcare Horizons would
expect the copayment to apply first in such a scenario and then the deductible for any
remaining plan payment due.
• Define the criteria used by Optima to determine when a separate illness or condition
exists for the purposes of granting separate authorizations for outpatient therapy
services.
• Determine a solution to prevent overpayments caused by multiple claim submissions
by providers for surgeries performed during the same operative session.
• Monitor the recovery of claims due to retroactive terminations on a monthly basis.
August 27, 2010 Page 3
- Healthcare
Horizons
Consulting Group, Inc.
~ITY QF VIRGtNt~- BEAGH
CLAIMS AUDIT REPORT
PROCESS OVERVIEW
Healthcare Horizons systematically reviews 100% of claim payments by the administrator on
behalf of our clients via our proprietary electronic claims edits. A series of standard
algorithms are utilized to identify potential areas of claims overpayments in areas such as
eligibility, pricing, duplicates and medical edits. In addition, customized queries are created
specific to each client based on variable factors such as benefits design.
Based on the results of our electronic analysis, Healthcare Horizons targets areas with
significant overpayment potential based on the dollar amount and our experience with the
categories in question. Many areas are resolved by Healthcare Horizons without inclusion in
the claims sample due to low findings from the electronic analysis or our determination that
the claims flagged are exceptions rather than errors. For the areas that warrant additional
research, a sample of claims is selected for review during the site visit with the administrator.
Within each category, Healthcare Horizons strives to select a sample that is representative of
all claims identified for the particular issue and covers significant potential errors. The goal
of the site visit is to work with the administrator to verify the presence of an error on each
claim and to solidify the logic used to identify the claims for full reports. Healthcare
Horizons recommends the delivery of additional claims beyond the site visit sample for
review and recovery by the administrator if warranted by the site visit findings. For
example, if Healthcare Horizons and the administrator agreed that nineteen of twenty
eligibility claims were recoverable overpayments, Healthcare Horizons would deliver a full
report from the entire data set meeting the same criteria.
Once an agreed listing of overpaid claims has been identified and placed into recovery by the
administrator, Healthcare Horizons monitors the collections process to a point of completion
that is satisfactory to both Healthcare Horizons and our client.
The following section describes the general areas of testing by Healthcare Horizons.
August 27, 2010 Page 4
- Healthcare
Horizons
CITY QF ~IRGINIA E~EACH
ConsultingGroup,~n~. CLAIMS /~1UDIT REPORT
AREAS OF TESTING
17uplicate Claims
Healthcare Horizons runs a series of duplicate claim edits across the claims data set to
identify claims that have been billed and paid more than once. Healthcare Horizons
identifies duplicate claims at both the claim level and individual procedure level. The
duplicate claim queries vary with matches and mismatches on fields such as patient,
provider, service date, billed charge, and procedure code. While most clients would e~cpect
duplicate claims to be rare, they are actually quite common in healthcare claims payments
and usually result in recoveries on every project conducted by Healthcare Horizons.
Eligibility
In addition to claims data, Healthcare Horizons requests a full eligibility file from the
administrator in order to validate coverage on the service date. Employer groups often
submit retroactive terminations to the administrator, resulting in an opportunity for
overpayments unless the administrator has a process in place to identify and recover these
claims. Every administrator should have a process for identifying and recovering claims
affected by a retroactive termination as they are common in the claims industry. In addition
to claims paid after the termination date, Healthcare Horizons identifies claims paid during a
gap in coverage and claims paid without an eligibility record on file.
ContractAudit
Healthcare Horizons normally requests a review of the signed provider contracts for the top
30 utilized hospitals for each group. While on-site at the administrator, Healthcare Horizons
uses the claims data to test pricing and other contractual terms present in the contract for all
claims paid to that provider in the claims data set. Other terms in the contract may include
readmissions, outpatient services on the day of admission, pre-admission testing, timely
filing, and transfers.
Some administrators do not allow this type of comprehensive audit of provider contracts in
which Healthcare Horizons tests all claims according to the terms present in the contracts. If
this is not made available, Healthcare Horizons selects site visit sample claims to test pricing
and the following items on a more limited basis.
August 27, 2010 Page 5
- Healthcare
Horizons
CITY QF YIRGINIA BEACH
ConsultingGroup,~nc. (r'LAIMS AUDIT REPORT
• Readmissions - If provider contracts have Diagnosis-Related Group (DRG) case rate
reimbursement, readmissions to treat the same illness may not be allowed if the
patient is readmitted within a certain number of days. This prevents facilities from
being compensated a greater amount for an inappropriate discharge.
• Outpatient Services on Day of Admission - If a patient receives outpatient services
such as an emergency room visit, and is later admitted on the same day, these charges
should be combined with the inpatient claim according to most provider contracts. If
the provider is reimbursed based on per diems or DRG case rate, no additional
payment is made for the outpatient services.
• Pre-admission Testing - If a patient undergoes tests related to a scheduled admission
within 24 to 72 hours, these services may be included with the inpatient claim and
not paid in addition to the inpatient stay for per diem or DRG case rate
reimbu.rsement. Examples of these tests include lab work and a baseline chest x-ray.
• Timely Filing - Provider contracts often state that claims must be submitted to the
administrator within a certain time period (such as one year) to be eligible for
payment. Otherwise the claim should be denied and the patient is held harmless.
• Transfers - Provider contracts based on DRG case rate inpatient reimbursement often
contain special pricing if the patient is transferred to another acute care hospital for
treatment. Since the patient was transferred, the initial hospital is not due the full
case rate amount to treat the illness. Transfer payments are often based on a specific
per diem rate in the contract.
Assistant Surgeon
In some circumstances, a procedure may require the services of an assistant in addition to the
primary surgeon. Healthcare Horizons tests two common areas of overpayments for assistant
surgeons: pricing and coding. Assistant surgeons usually receive 20-25% of the normal fee
schedule rate for the codes used with assistant modifiers. Healthcare Horizons utilizes the
claims data to identify the payment to the primary surgeon and then isolates assistant
surgeon claims paid greater than 20-25% of this rate. In our e}cperience, this analysis yields a
high rate of assistant surgeon lines that are overpaid. In addition, The Center for Medicare
Services produces a publicly available listing of procedure codes for which it does not allow a
payment for assistant surgery. These are services that> by their natttre, do not lend
themselves to requiring an assistant. Healthcare Horizons identifies assistant surgeon claims
for these procedures as possible overpayments. Although this Medicare guideline is not a
requirement that must be followed by commercial insurance carriers, most administrators
should have some similar list of codes not payable for assistants.
August 27, 2010 Page 6
- Healthcare
Horizons
Consulting Group, Inc.
~ITY 4F VIR~INIA BEAGH
CLAIMS AUDIT REPORT
Multiple Procedure Reductions
When multiple services are performed in the same session, secondary procedures are priced
at a reduced percentage (usually 50%) of the normal contract rate to account for economies
and efficiency gained by not having to duplicate preparation of the patient for each
procedure. Healthcare Horizons flags claims that may have missed this standard discount by
reviewing the secondary procedure allowance in relation to the primary procedure
allowance for the session of care.
Benefits
Healthcare Horizons creates customized queries to model the benefits present in the
summary plan documents (SPDs) provided by the employer group. Likely areas of testing for
benefits are application of copayments and coinsurance, annual dollar or visit maximums,
non-covered benefits, coordination of benefit rules, and other specific items flagged by our
auditors as potential errors. A Healthcare Horizons auditor reviews the SPDs in full for each
claims audit and selects the benefit areas where testing is possible. Some benefits do not lend
themselves to systematic testing in the data and can only be reviewed on selected sample
claims.
Pricing
Healthcare Horizons takes steps to verify accurate pricing of certain claims in the data set
such as high dollar, no discount, and those with variability in pricing. These steps are
described further below.
Healthcare Horizons selects the highest paid claims in the data set to ensure correct pricing
by the administrator. Often these claims are more complex, which raises the possibility of
error.
Claims priced at billed charges. with no discount are targeted for pricing verification. Given
the broad networks of the larger administrators, as well as the availability of national rental
networks, the majority of claims should receive some type of discount. Healthcare Horizons
verifies that pricing was not missed in error on higher paid claims.
Healthcare Horizons profiles top facilities and establishes payment patterns and trends.
Claims that fall outside of the normal patterns will be questioned for payment errors. This
area is especially important if a contract audit is not available as part of the audit process.
August 27, 2010 Page 7
- Healthcare
Horizons
Consulting Group,lnc.
CITY OF V'IRGINIA BEAGH
CLAIMS AUDIT REPORT
Since Healthcare Horizons has found that pricing of claims is one of the largest categories of
errors at many administrators, we take aggressive steps to identify as many potential errors as
possible for detailed review.
Other Insurance
The presence of other primary insurance usually reduces the payment due by the employer
group if they are secondary. In some cases, a secondary policy will pay as primary, such as
when primary benefits are exhausted or the primary policy does not cover a particular
service. Healthcare Horizons utilizes the claims data to identify claims paid as primary that
may have other insurance based on the following categories:
• Other Claims Paid as Secondary - Healthcare Horizons utilizes the claims data to
create a date range for each patient where claims have been paid as secondary based
on the presence of a coordination of benefits (COB) savings amount. Any claims paid
within this date range without a COB amount may be questioned for the presence of
other primary coverage.
• ESRD -- After 33 months of treatment for ESRD, Medicare automatically becomes the
primary insurer for the patient. Healthcare Horizons identifies patients with an
extended period of treatment for ESRD to ensure the administrator is correctly
tracking the Medicare primary effective date.
Healthcare Harizons also scrutinizes claims that are paid as secondary with a paid amount
higher than that of the primary camer. Normally, the secondary payment is lower than the
primary plan payment as it likely only covers remaining member responsibility after the
primary payment.
High Units
Healthcare Horizons queries the claims data for unit counts that are abnormally high for the
procedure code billed. An error in units may cause the claim to default to billed charges as
the fee schedule is multiplied by an incorrect unit count.
Medical Edits
Healthcare Horizons applies medical edits to the claims data to identify mutually exclusive
procedures and cases of procedure unbundling. Mutually exclusive edits identify procedure
combinations that cannot be reasonably performed on the same patient on the same day.
Unbundling occurs when a provider bills multiple component codes versus a single
August 27, 2010 Page 8
- Healthcare
Horizons
Consulting Group, Inc.
~ITY OF VIRGINIA BEACM
CLAIMS AUDIT REPORT
comprehensive code, often resulting in higher reimbursement. Payers have much discretion
over which medical edits to apply as there is not a commonly accepted group of these
throughout the industry; therefore, Healthcare Horizons is generally looking for a reasonable
application of a set of edits and questions selected claims that seem to be clear errors.
Overlapping Inpatient
Healthcare Horizons identifies cases where patients have claims reporting that they are
inpatient at different facilities for the same service date. These are often the result of
provider billing errors or manual data entry mistakes.
Subrogation
Healthcare Horizons queries the claims data for possible subrogation opportunities where
third party liability (TPL) may exist. A common e~cample is medical services related to an
auto accident where the auto insurer is liable for a portion of the medical claims. These
claims are identified via accident-related diagnosis codes.
Hospitalllllstakes
Many payers across the country have adopted policies to investigate and subsequently deny
payment for hospital mistakes and avoidable conditions, such as objects left in patient during
surgery, fractures incurred in the hospital, blood incompatibility, and certain types of
infections. Healthcare Horizons examines the claims data for these types of hospital errors
and expects recovery opportunities for these errors as more administrators adopt such
policies.
Cosmetic Surgery
Healthcare Horizons maintains a listing of procedure codes that may be considered as
cosmetic, but judgments on these claims are highly subjective. Healthcare Horizons is
usually looking at the total paid for these types of codes to make sure it is not excessive. If
any of these claims are selected for the sample, we request that the administrator provide
evidence that the claim was considered for medical review and that reasonable review took
place. Medical necessity issues such as cosmetic surgery are not areas that result in
significant recovery, but can be issues that our clients want to address proactively for future
cost savings.
August 27, 2010 Page 9
- Healthcare
Horizons
Consulting Group, Inc.
CITY QF ~/IRGlNIA BEACH
CLAIMS AUDIT REPORT
Reinsurance~
If the employer group has stop loss or reinsurance coverage, Healthcare Horizons utilizes the
claims data to identify members that should have resulted in a credit due back to the group.
Healthcare Horizons verifies with the administrator that the credits have been issued to the
group.
August 27, 2010 Page 10
- Healthcare
Horizons
Consulting Group, Inc.
~lTY QF VIRGINIA ~EACH
CLAIMS AUDIT REPORT
SITE VISIT SELECTION
The following chart details the composition of the site visit claims selection as well as the
errors identified during the site visit.
u licates - Claim Level
.
12
~• . ..
.
3
.
.
$2,870.41 ..
~- . •~
.
1 .
. •.
.
$1,085.00
Du licates - Line Level 13 2 $1,144.62 1 $75.75
Assistant Sur eon Multi le Procedures 3 1 $95.26 0 $0.00
OtherInsurance 8 2 $9,097.42 0 $0.00
Second Pa ent Hi her Than Prima 8 1 $1,188.00 0 $0.00
Hi h Seconda Pa ent 4 0 $0.00 0 $0.00
ESRD 5 0 $0.00 0 $0.00
Timel Filin 2 0 $0.00 0 $0.00
Out atient Durin In atient 2 1 $101.20 0 $0.00
Overla in In atient 2 0 $0.00 0 $0.00
Admission from Emer en Room 2 0 $0.00 0 $0.00
Multi le Procedure Reducrions 26 8 $2,181.52 0 $0.00
Eli ibili - After Termination 55 5 $265.35 47 $10,504.95
Eli ibili - Not on File 2 0 $0.00 0 $0.00
Out atient Sur e Co a 10 8 $800.00 0 $0.00
Office Visit Co a 10 0 $0.00 0 $0.00
Emer enc Room Co a ment 5 1 $100.00 0 $0.00
Subro ation 3 0 $0.00 0 $0.00
Out atient Thera Benefit Maximum 46 6 $5,407.25 0 $0.00
PHCS POS Benefit 2 0 $0.00 0 $0.00
Pricin 5 0 $0.00 0 $0.00
Contract Audit 4 0 $0.00 3 $5,204.00
229 38 $23,251.03 52 $16,869.70
August 27, 2010 Page 11
- Healthcare
Horizons
Consulting Group, Inc.
GITY QF VIRGINIA BEACH
CLAIMS AUDIT REPORT
FINDINGS
The immaterial amount of errors identified in the sample indicates that Opti.ma has effective
procedures in place to prevent duplicate payments. In total, Healthcare Horizons identified
$5,176 in duplicate payments in the site visit sample, which we view as insignificant given
the volume of claims processed by Optima. All material potential overpayments were
presented in the site visit sample; therefore> no additional follow-up is required in this area.
Healthcare Horizons identified two members with clai.ms paid incorrecdy as pri.mary. For
audit items 30 and 35, other insurance should have paid as primary. It is likely that the other
insurance information was obtained after the claims were processed, but Optima should have
procedures to identify claims impacted by updated information for reprocessing. Audit item
30 had a refund request issued previously, but this amount has not been recovered or
credited to the group to date. Healthcare Horizons is citing the overpayment amount
($4,859) as a finding and will track the overpayment to recovery. Based on the site visit
findings, Healthcare Horizons submitted 39 additional out-of-sample claims for one of these
members, however, Optima responded that all of these services fell under Medicare Part B
coverage, therefore, no overpayment occurred since the member only had Part A. If the plan
design called for an estimate of Part B benefits, additional savings would have applied.
Healthcare Horizons identified overpayments for missed multiple procedure reduction
opportunities due to fragmented billing by providers, but most payers have procedures in
place to identify these cases for reduction as the billing pattem is not uncommon. It appears
that Optima does not have a process in place to identify multiple procedure reduction
opportunities when providers bill on separate claims. This was also a finding in the previous
Optima audit. Healthcare Horizons identified $2,182 in multiple procedure overpayments
from the site visit sample selection and delivered eight additional cases covering sixteen
claims for review by Optima. All eight cases were agreed as errors, however, Optima
indicated the majority of overpayments were already recovered ($6,242 of $6,323) prior to
delivery by Healthcare Horizons. While the total dollar amount is not significant, this area
likely represents ongoing overpayments. Healthcare Horizons recommends that Optima
e~cplore options to eliminate this type of overpayment, even if it can only be done through
post-payment audits.
Opti.ma has a process is in place to identify and recover clai.ms affected by retroactive
eligibility terminations, but the ti.meliness and consistency of this process should be closely
monitored by the plan. The majority of claims sampled by Healthcare Horizons in this
category were recovered prior to sample delivery, but the majority of these adjustments were
August 27, 2010 Page 12
- Healthcare
Horizons
Consulting Group, Inc.
~ITY QF ~f IRGiN1A E~EA~H
CLAIMS AUDIT REPORT
performed just prior to the audit by Healthcare Horizons. Given the paid date ranges of the
claims in question, we believe that Optima needs to follow-up on these claims more
consistently in the future. Healthcare Horizons suggests that the group monitor eligibility
recoveries monthly to ensure that claims are adjusted on a timely basis.
Healthcare Horizons identified instances where the $100 outpatient surgery copayment was
not applied, but the root cause has not been identified yet on these clai.ms. Optima agreed to
eight overpayments from the site visit selection where the copayment was not applied. No
explanation was provided for the errors; therefore, we request that Optima examine the root
cause of this error. Based on the findings from the site visit, Healthcare Horizons provided
fifteen additional claims for review by Optima resulting in fourteen agreed errors totaling
$1,400.
Healthcaze Horizons found that the $20 Pri.mary Caze Physician office visit copayment is not
taken when the $100 annual deductible is taken on the same claim. While this seems to
match the plan's intent based on the discussion at the exit meeting, this is not the manner in
which we normally see this adjudicated. Typically the copayment would apply first and then
the annual deductible would apply to any balance due from the plan on the claim. Further,
Optima is only applying the copayment if there is a plan balance due on the evaluation and
management CPT code on these types of claims. Most office visits include additional
ancillary charges such as lab or diagnostic radiology codes. Healthcare Horizons noted cases
where all additional codes on an office visit claim were allowed at 100% with no copayment
even though the copayment was not applied to the evaluation and management line due to
the deductible issue cited above. Healthcare Horizons would consider all services performed
as part of the office visit and not just the specific evaluation and management code, thus
leading to application of the copayment in cases where it is missed by Optima. Healthcare
Horizons only estimates an overpayment of $1,498 on PCP claims for the audit period, so the
impact is not significant. As long as the plan understands the application of this bene~it and
agrees to it, then no follow-up is necessary in this category.
Healthcare Horizons identified a member eligible for Medicare Part B who did not elect to
pay for the coverage, resulting in a higher amount paid by the City of Virginia Beach.
Medicare Part A is free to Medicare-eligible persons and generally covers inpatient hospital
stays. Medicare Part B is available for a monthly premium and covers physician and
outpatient facility claims, so a member with coverage through a group health plan may be
incentivized to omit the election of Part B if the group coverage does not contain provisions
to coordinate with estimated Part B benefits. For audit item 36, the claim was for a physician
August 27, 2010 Page 13
- Healthcare
Horizons
Consulting Group, Inc.
GITY QF VIF~GINIA ~EACH
CLAIMS AUDIT REPORT
service, so no coordination was required with Medicare Part A. The absence of Part B
resulted in a higher liability for the plan as it paid primary on the claim. Some employers
include language in their plan benefits to estimate Part B coverage in these cases for the
purpose of reducing plan payment using the estimated benefits. The City may wish to
explore this type of provision, though the overall impact should be relatively low given the
limited cases of Medicare-eligible members on the plan.
Healthcare Horizons disagrees with two examples of outpatient therapy where separate
episodes of care (and separate 30-visit maximums) were authorized by Opti.ma. It appears
that minor variations in diagnosis code can result in separate authorizations for an additional
benefit of 30 visits. The examples from the site visit are as follows:
Audit Items 189-194 - Three sevarate authorizations
Occupational Therapy 955.2 Injury to ulnar nerve NA NA
Occupational Therapy 882.2 Open wound of hand 955.2 Injury to ulnar nerve
Phvsical Theranv 882.2 Ouen wound of hand 955.2 Iniurv to ulnar nerve
Audit Items 195-201- Two
authorizations
~ Physical Therapy ~ 728.87 ~ Muscle weakness ~ NA ~ NA ~
Phvsical Theravv 728.2 Muscular wasting NA NA
For the cases outlined above, services were provided consecutively with no break that would
suggest a recovery and therefore a new benefit period. We request that Optima's clinical
area revisit these cases and provide feedback on why each authorization above was
considered a separate illness or condition.
Based on the site visit clai.ms, it appears the Optima policy for secondary cla.i.ms is to pay the
member liability from the primary payer's explanation of benefits regardless of the contract
allowable by Optima on the claim. There may be an opportunity for additional cost savings
on these claims if Optima limits the combined primary and secondary payments to its
contractual allowable. This is a common provision in plan documents in our e~cperience, and
Healthcare Horizons made a similar recommendation in the prior Optima audit.
August 27, 2010 Page 14
- Healthcare
Horizons
Consulting Group, Inc.
GITY 4F VIR~INIA BEACH
CLAIMS AUDIT REPORT
The contract audit did not yield any agreed overpayments, however, Healthcaze Horizons
noted three cases of facility multiple procedure errors that were identified on the last audit
that had been recovered shortly before our site visit. Optima has long-standing agreements
with most of the top providers and has established standard pricing methodologies that result
in an exceptional degree of accuracy in the pricing of facility claims. It is commendable that
Optima identified and corrected the three claims referenced above prior to identification by
Healthcare Horizons, but the City should note that these errors have e~risted for a number of
months and were likely prioritized based on the expected external audit.
Opti.ma noted in the exit meeti.ng that it is now utilizing two external audit vendors through
its Special Investigations Unit that perform overpayment identification similaz to Healthcare
Horizons. As no details were available from the staff present at that meeting, the City should
follow-up with Optima management to negotiate access to reports of findings from these
vendors on the plan's claims. Reports from these vendors could identify areas of concern or
highlight audit procedures in place that would impact future audit plans by the City. We
request that Optima include the names of the vendors and a general description of their
work on the City's claims in response to this audit report.
Healthcare Horizons did not identify other areas of concem for systemic overpayments.
Beyond other insurance, multiple procedures, and the outpatient surgery copayment,
Healthcare Horizons does not recommend review of additional out-of-sample claims. All
other overpayments identified in the site visit sample selection were indicative of manual
errors.
August 27, 2010 Page IS
- Healthcare
Horizons
Consu Iting Group, Inc.
CITY QF ~IRGiNEA BEAGH
CLAIMS AUDIT REPORT
CONCLUSION
Healthcare Horizons appreciates the opportunity to perform this claims audit on behalf of
the City of Virginia Beach. The overall results represent exceptional performance by Optima
in the administration of healthcare claims.
Healthcare Horizons requests that Optima place all agreed overpayments into recovery and
report any negative potential member impact to both Healthcare Horizons and the City of
Virginia Beach prior to any collections activity. Once all overpayments are in recovery> we
request that a monthly collections report be delivered to Healthcare Horizons and the City of
Virginia Beac~a until a satisfactory percentage of collections is achieved.
August 27, 2010 Page 16
APPENDtX A
SITE VIStT L'~ETAIL
- Healthcare
Horizons
Consulting Group,lnc.
~ITY QF ~/IRGINIA ~EACH
APPENDIX A
SITE VISIT DETAIL
I Du licates - Claim Level $0.00 $0.00 CorreM claim Schools
2 Du licates - Claun Level $884.00 $0.00 Error Schools
3 Du licates - Claun Level $522.04 $0.00 Error Ci
4 Du licates - Claun Level $0.00 $0.00 Correct claim Ci
5 Du licates - Claun Level $0.00 $1,085.00 Alread corrected rior to sam le and afrer data (5/13/10) Schools
6 Du licates - Claun Level $0.00 $0.00 Correct claim Schools
7 Du licates - Claim Level $0.00 $0.00 Correct claim Ci
8 Du licates - Claim I.evel $1,464.37 $0.00 Error - claim should have aid as second onl - Ci
9 Du licates - Claun Level $0.00 $0.00 LT modifier (Mod2 not in data) Schools
10 Du licates - Claun Level $0.00 $0.00 RT modifier (Mod2 noi in data) Schools
11 Du licates - Claun Level $0.00 $0.00 Different roceduzes Schools
12 Du licates - Claun Level $0.00 $0.00 Different rocedures Schools
13 Du licates - Line Level $0.00 $0.00 Two different ER visits Ci
14 Du licates - Line Level $0.00 $0.00 Two different ER visits Ci
15 Du licates - Line Level $0.00 $0.00 Correct claim Ci
16 Du licates - Line Level $0.00 $0.00 tllread corrected rior to sam le - ad ustment not in data Ci
17 Du licates - Line Level $0.00 $0.00 Alread corrected rior to sam le - ad us[ment not in data Ci
18 Du licates - Line Level $0.00 $0.00 Correct claim Schools
19 Du licates - Line Level $0.00 $7575 Alread conected rior to sam le and after data (5/20/10) Schools
20 Du licates - Line I.evel $0.00 $0.00 Correct claim Schools
21 Du licata - Line Level $1,085.00 $0.00 Error Schools
22 Du licates - Line Level $0.00 $0.00 Correct claim Schools
23 Du lica[es - Line Level $59.62 $0.00 Error Schools
24 Du licates - Line Level $0.00 $0.00 Correct claim Schools
25 Du licates - Line Level $0.00 $0.00 59 modifier (Mod2 not in data) Schools
26 Assis[ant Sur eon Multi le Procedures $0.00 $0.00 No further reduction er medical olic Ci
27 Assistant Sur eon Multi le Procedures $0.00 $0.00 No further reduction er medical olic Ci
28 Assistant Sur eon Multi le Procedures $95.26 $0.00 Error Ci
29 Other Insurance $0.00 $0.00 No other insurance on service date er tima Ci
30 Other Insurance $4,859.42 $0.00 Refund re uested 4/4/10, however retraction has not cleared - findi Schools
31 Other Insurance $0.00 $0.00 Correctl allowed atient ortion from ri EOB Schools
32 Other Insurance $0.00 $0.00 tima ri Ci
33 Other Insurance $0.00 $0.00 Prun cazrier denied services Schools
34 O[her Insurance $0.00 $0.00 Prun carrier denied services Schools
35 O[her InsUrance $4,238.00 $0.00 Error - should rocess as Medicare rima - art A effective 2/1/03 Schools
36 Other Insurance $0.00 $0.00 Member has Medicare Parc A onl - recommend re uirin Part B Ci
37 Seconda Pa ent Hi her Than Prim $0.00 $0.00 Correctl allowed a[ien[ ortion from rim EOB Schools
38 Seconda Pa ent Hi her Than Pri $0.00 $0.00 Correcd allowed atient ortion from rim EOB Ci
39 Seconda Pa ent Hi her Than Prim $0.00 $0.00 Correctl allowed atient ortion from rim EOB Schools
40 Seconda Pa en: Hi her Than Pri $1,188.00 $0.00 Error - rima lan aid member in full Ci
41 Seconda Pa en: Hi her Than Prim $0.00 $0.00 Correctl allowed atient ortion from rim EOB Schools
42 Seconda Pa enx Hi her Than Prim $0.00 $0.00 Conectl allowed atient ortion from rim EOB Schools
43 Seconda Pa ent Hi her Than Pri $0.00 $0.00 Correctl allowed atien[ ortion from rim EOB Ci
44 Seconda Pa ent Hi her Than Prim $0.00 $0.00 Correctl allowed atient ortion from rim EOB Ci
45 Ai h Second Pa men[ $0.00 $0.00 Correctl allowed atient ortion From rim EOB Ci
46 Hi h Second Pa men[ $0.00 $0.00 Correcd allowed atienc ortion from rim EOB Ci
47 Hi h Second Pa ment $0.00 $0.00 Correctl allowed atient ortion from rim EOB Ci
48 Hi Second Pa men[ $0.00 $0.00 O tima is second and rima - coordinated to coaect allowable Ci
49 ESRD $0.00 $0.00 Medicare rim 6/I/09 Schools
50 ESRD $0.00 $0.00 Medicaze rim 6/1/11 Schools
51 ESRD $0.00 $0.00 Medicaze rim 6/1/11 Schools
52 ESRD $0.00 $0.00 Medicare rim 10/1/09 Ci
53 ESRD $0.00 $0.00 Medicaze rima 3/1/12 Ci
54 Timel Filin $0.00 $0.00 Timel filin waiver a roved Schools
55 Timel Filin $0.00 $0.00 Timel filin waiver a roved Ci
56 Ou auent Durin In atient $0.00 $0.00 In a[ient claim - informational onl Ci
57 Ou[ atient Durin In atient $10120 $0.00 Error Ci
58 Overla in In atient $0.00 $0.00 Informational onl Ci
59 Overla in In atient $0.00 $0.00 Member transferred [o se azate facili for one da Ci
60 Admission from Emer en Room $0.00 $0.00 Patient discha ed to home and admitted later after second ER visit Schools
61 Admission from Emer en Room $0.00 $0.00 In atient claim - informational onl Schools
62 Mulli le Procedure Reductions $0.00 $0.00 Prun rocedure - informational onl Schools
63 Multi le Procedure Reductions $586.93 $0.00 Ad usted 6/3/10 - audic findin Schools
64 Multi le Procedure Reductions $0.00 $0.00 Prun rocedure - informational onl Schools
August 27, 20~0 Page 1
- Healthcare
Horizons
Consulting Group, Inc.
GITY QF ~/IF~GINIA BEA~H
APPENDIX A
SITE VISIT DETAIL
65 Multi le Procedure Reductions $90.93 $0.00 Error - multi le claim submissions Schools
66 Muld le Pmcedure Reductions $0.00 $0.00 Prun rocedure - informational onl Schools
67 Multi le Pmcedure Reductions $72.49 $0.00 Error - mul~i le claim submissions Schools
68 Multi le Procedure Reductions $0.00 $0.00 Prim rocedure - infomiational onl Schools
69 Multi le Procedure Reductions $391.28 $0.00 Fsror - multi le claim submissions Schools
70 Multi le Procedure Reductions $0.00 $0.00 Prim rocedure - informational onl Schools
71 Multi le Procedure Reductions $117.51 $0.00 Error - multi le claim submissions Schools
72 Multi le Procedure Reductions $0.00 $0.00 Prim rocedure - informational onl Schools
73 Multi le Procedure Reductions $0.00 $0.00 Reduced correctl Schools
74 Multi le Procedure Reductions $0.00 $0.00 Prun rocedure - informational onl Schools
75 Multi le Procedure Reductions $0.00 $0.00 Reduced correcd Schools
76 Multi le Procedure Reductions $0.00 $0.00 Prun rocedure - informational onl Schools
77 Multi le Procedure Reductions $0.00 $0.00 Reduced correctl Schools
78 Multi le Procedure Reductions $0.00 $0.00 Prim rocedure - informational onl Schools
79 Multi le Procedure Reduc[ions $222.74 $0.00 Error - multi le claim submissions Schools
80 Multi le Pmcedure Reductions $0.00 $0.00 Prim rocedure - informational onl Ci
Sl Multi le Procedure Reductions $80.13 $0.00 Error - multi le claim submissions Ci
82 Multi le Procedure Reductions $0.00 $0.00 No reduccions indicated u tima olic for Mod 22 Schools
83 Mulri le Procedure Reductions $0.00 $0.00 Reduced correcd Schools
84 Multi le Procedure Reductions $0.00 $0.00 Reduced correcd Schools
SS Multi le Procedure Reductions $0.00 $0.00 Reduced correcd Schools
86 Muld le Procedure Reductions $0.00 $0.00 Reduced correctl Ci
87 Multi le Procedure Reductions $619.51 $0.00 Error Schools
88 Eli 'bilit - After Termination $0.00 $297.70 Ad usted 4/22/10 Ci
89 Eli ibilit - Afrer Termination $0.00 $56.39 Ad'usted 4/15/10 ~
90 Eli ibilit - After Termination $0.00 $206.59 Ad'usted 4/22/10 Schools
91 Eli 'bilit - Afrer Termination $0.00 $93.27 Ad'usted 4/15/10 Schools
92 Eli 'bili[ - Afrer Termination $0.00 $52.62 Ad'usted 4/15/10 Schools
93 Eli 'bilit - After Terminacion $0.00 $125.58 Ad'usted 4/15/10 Schools
94 Eli 'bilit - After Termination $0.00 $124.52 Ad'usted 4/4/10 Schools
95 Eli 'bilit - Afrer Termination $0.00 $110.86 Ad'usted 5/27/10 Schools
96 F1i 'bilit - After Termination $0.00 $88.84 Ad'usted 4/15/10 Schools
97 Eli 'bilit - After Termination $0.00 $51.72 Ad usted 5/27/10 Schools
98 Eli 'bilit - tlfter Termination $0.00 $31.24 Ad'usted 4/4/10 Schools
99 Eli 'bilit - Afrer Termination $0.00 $21.01 Ad usted 5/27/10 Schools
L00 Eli 'bilit - After Terminacion $0.00 $252.22 Ad'usted 5/6/10 Schools
101 Eli 'bilit - After Termination $0.00 $69.02 Ad'usted 5/6/10 Schools
102 Eli 'bilit - Afrer Termination $0.00 $69.02 Ad'us[ed 5/6/10 Schools
103 F1i 'bilit - Afrer Termination $0.00 $185.16 Ad'usted 4/22/10 Schools
104 E1i 'bilit - After Ternunation $120.68 $0.00 A reed Error Ci
105 F1i 'bilit - After Terminadon $0.00 $0.00 Ad'usted 12/17/09 - not in data Cirv
106 Eli 'bffit - After Termination $0.00 $0.00 Ad'usted 12/17/09 - not in data Ci
107 Eli 'bilit - Afrer Termination $0.00 $97276 Ad usted 5/27/10 Citv
108 Eli 'bilit - After Termination $0.00 $263.05 Ad'usted 5/27/10 Ci
109 Eli bilit - Afrer Termination $0.00 $125.69 Ad usted 5/27/10 Ci
I 10 Eli 'bili[ - After Termination $0.00 $125.00 Ad'us[ed 5/27/10 Ci
I I1 Eli 'bilit - After Termination $0.00 $125.00 Ad'usted 5/27/10 Ci
l12 Eli 'bilit - Afrer Termination $0.00 $12170 Ad usted 5/27/10 Ci
I13 Eli 'bilit - After Termination $0.00 $42.60 Ad~ustmen[ da[e not available due to MH Ci
114 Eli 'bili - After Termination $0.00 $145.48 Ad'usted 4/15/10 Schools
I15 Eli 'bilit - After Termination $0.00 $32.84 Ad~ustment date not available due to MH Ci
116 Eli 'bilit - After Ternunation $0.00 $452.10 Ad'usted 5/27/10 Ci
I17 Eli bilit - Afrer Termination $0.00 $19.63 Ad ustment date not available due to MH Schools
118 Eli 'bili~ - Afrer Teraunation $0.00 $1,950.00 Ad'usted 6/17/10 Ci
119 Eli 'bilit - Afrer Terminacion $0.00 $536.68 Ad'usted 5/27/10 Ci
120 Eli 'bilit - Afrer Terntination $0.00 $480.00 Ad usted 4/15/10 Ci
121 Eli 'bilit - After Temunation $0.00 $61.26 Ad usted 4/15/10 Ci
122 F1i 'bilit - Afrer Termination 532.84 $0.00 reed &ror Ci
123 Eli 'bilit - After Termination $0.00 $0.00 Ad usted 12/24/09 - not in data Schools
124 Eli bilit - Afrer Termination $0.00 $43.68 Ad usted 4/15/10 Schools
125 Eli 'bilit - Afrer Temunation $0.00 $40.00 Ad usted 4/15/10 Schools
126 Eli 'bilit - After Ternunation $0.00 $379.40 Ad"usted 4/1/10 Schools
127 Eli 'bili[ - Afrer Termination $49.60 $0.00 A reed &ror Schools
128 Eli 'bilit - After Termination $19.63 $0.00 reed Error Ci
August 27, Z010 Page 2
~ Healthcare
Horizons
Consulting Group, Inc.
CITY QF YlRGiN1A BEACH
APPENDIX A
SITE VISIT DETAIL
129 Eli 'bilit - Afrer Termination $0.00 $92.25 Ad'usted 4/15/10 Schools
130 Eli 'bilit - Afrer Termina[ion $0.00 $34.13 Ad ustment date no[ available due [o MH Schools
131 Eli 'bilit - Afrer Terminacion $0.00 $455.97 Ad usted 4/15/10 Schools
132 F1i 'bilit - Afrer Termination $0.00 $59.71 Ad usted 4/15/10 Schools
133 F1i 'bilit - After Termination $0.00 $19.49 Ad ustment date not available due to MH Ci
134 Eli 'bili~ - Afrer Termination $0.00 $238.80 Ad usted 4/15/10 Schools
135 Eli 'bilit - Afrer Termination $0.00 $211.57 Ad usted 4/15/10 Schools
136 Eli "bili[ - Afrer Termination $0.00 $77.41 Ad'usted 4/15/10 Schools
137 Eli bilit - A£[er Termination $0.00 $65.52 Ad usted 4/15/10 Schools
138 Eli 'bili[ - Afrer Termina[ion $0.00 $140.58 Ad'usted 5/27/10 Schools
139 F1i 'bilit - Afrer Termination $0.00 $52.26 Ad'usted 4/29/10 Schools
140 Eli 'bili~ - Afrer Termina[ion $0.00 $1,163.12 Ad'usted 4/15/10 Ci
141 Eli bilit - After Termination $0.00 $141.51 Ad'usted 4/15/10 Ci
142 F1i 'bilit - Afrer Termination $42.60 $0.00 reed Error Ci
143 F1i ibilit - Not on File $0.00 $0.00 Member active er O tima s stem Schools
144 Eli bilit - Not on File $0.00 $0.00 Member active er O tima s tem Schools
145 Out atientSur e Co a $100.00 $0.00 Error Schools
146 Out atientSur e Co a $100.00 $0.00 Error Ci
147 Out atientSur e Co a $100.00 $0.00 Error Ci
148 Ouc azient Sur e Co a $100.00 $0.00 Error Ci
149 Out adent Sur e Co a $100.00 $0.00 Error Schools
150 Out atient Sur e Co a $100.00 $0.00 Error Schools
151 Out atient Sur e Co a $100.00 $0.00 Error Schools
152 Ou[ atient Sur e Co a $0.00 $0.00 Co a taken - multi le service dates billed Schools
153 Out atient Sur e Co a $0.00 $0.00 Co a taken - multi le service dates billed Schools
154 Out atient Sur e Co a $100.00 $0.00 &ror Schools
155 Office Visit Co a $0.00 $0.00 Current rocessin seems to maich ou in[ent Schools
156 Office Visit Co a $0.00 $0.00 Current rocessin seems to match rou intent Schools
157 Office Visit Co a $0.00 $0.00 Curren[ rocessin seems to match ou intent Schools
I58 Office Visit Co a $0.00 $0.00 Current rocessin seems to match rou intent Ci
159 Office Visit Co a $0.00 $0.00 Current rocessin seems to match rou intent Schools
160 Office Visit Co a $0.00 $0.00 Current rocessin seems to match ou intent Ci
161 Office Visit Co a $0.00 $0.00 Current rocessin seems to match ou intent Schools
162 Office Visit Co a $0.00 $0.00 Current rocessin seems to match ou intent Schools
163 Office Visit Co a $0.00 $0.00 Current rocessin seems to match ou intent Schools
164 Office Visit Co a $0.00 $0.00 Current rocessin seems to match rou intent Ci
165 Emer en RoomCo a ent $100.00 $0.00 Error Ci
166 Emer en Room Co a ent $0.00 $0.00 Co a taken as out atient sur e Schools
167 Emer en Room Co a ent $0.00 $0.00 Co a taken - multi le service dates billed Schools
168 Emer en Room Co a ent $0.00 $0.00 Seconda claim, no co a due, COB amount noc in data Ci
169 Emer en Room Co a ent $0.00 $0.00 Second claim, no co a due, COB amount no[ in data Ci
170 Subro ation $0.00 $0.00 Grou does notsubro ate Ci
171 Subro ation $0.00 $0.00 Grou does notsubro ate Ci
172 Subro ation $0.00 $0.00 Grou does no[subro a[e Ci
173 Out atient Thera v Benefit Ma~cimum $0.00 $0.00 Classified b O cima as out atient rehab with 90 da limit Schools
174 Out atient Thera v~nefit Ma~cimum $0.00 $0.00 Classified b O tima as ou atien[ rehab with 90 da limic Schools
175 Out atient Thera y Benefit Ma~cimum $0.00 $0.00 Classified b O tima as out atient rehab with 90 da limit Schools
176 Ou[ atient Thera y Benefit Maacimum $0.00 $0.00 Classified b O tima as ou atient rehab with 90 da limit Schools
177 Out atien~ Thera y Benefit Maximum $0.00 $0.00 Did not exceed out atient thera limit when out atient rehab excluded Schools
178 Out atient Thera y Benefit Maximum $0.00 $0.00 Did not exceed out atient thera limit when ou atient rehab excluded Schools
179 Out atient Thera Benefit Ma3cimum $0.00 $0.00 S eech [hera has se azate 30 visit limit Schools
180 Out atient Thera Benefit Ma~cimum $0.00 $0.00 S eech thera has se aza[e 30 visit limit Schools
181 Out atient Thera Benefit Ma~cimum $0.00 $0.00 Did no[ exceed out atient thera limit when ou atient rehab excluded Schools
182 Out atient Thera y Benefi[ Ma~cimum $0.00 $0.00 S eech ffiera has se azate 30 visit limit Schools
183 Out atient Thera ~ Benefit Maximum $0.00 $0.00 Informational onl Ci
184 Out atient Thera y Benefit Maximum $0.00 $0.00 Informational onl Ci
185 Out atient Thera ~ Benefit Ma~cimum $1,233.23 $0.00 Error - rocessed incorrecd under SNF benefit Ci
186 Out adent Thera Benefit Maximum $746.70 $0.00 Error - rocessed incorrectl under SNF benefi[ Ci
187 Out atient Thera y Benefit Maximum $1,568.07 $0.00 Error - rocessed incorrectl under SNF benefit Ci
188 Out atient Thera y Benefit Masimum $442.54 $0.00 Error - rocessed incorrectl under SNF benefit Ci
189 Out atieni Thera y Benefit MaYimum $0.00 $0.00 InformaCional onl Ci
190 Out atient Thera y Benefit Masimum $0.00 $0.00 Informational onl Ci
191 Ou~ atient Thera y Benefit Maximum $1,141.10 $0.00 Error Ci
192 Out atien[ Thera Benefit Maximum $0.00 $0.00 Authorized se azatel as PT - similaz dia osis - will detail in re ort Ci
August 27, 2010 Page 3
- Healthcare
Horizons
Consulting Group, Inc.
~ITY QF VIRCINIA BEAGH
APPENDIX A
SITE VISIT DETAIL
193 Ou adent Thera Benefit Ma~cimum $0.00 $0.00 Authorized se aratel - similar dia nosis - will detaIl in re rt Ci
] 94 Ou atient Thera Benefi[ Mauimum $0.00 $0.00 Authorized se azarel - similar dia nosis - will detaIl in re rt Ci
195 Ou auent Thera Benefit Maximum $0.00 $0.00 Two se arate authorizations for 30 visits of PT - similar dia osis Schools
196 Ou arient Thera Benefit Maximum $0.00 $0.00 Two se arate authorizations for 30 visits o£ PT - similar dia osis Schools
197 Ou auent Thera Benefit Maximum $0.00 $0.00 Two se arate authorizadons for 30 visits of PT - similar dia osis Schools
198 Ou arient Thera Benefit Maximum $0.00 $0.00 Two se arate authorizarions for 30 visiu of PT - similar dia osis Schools
199 Ou atient Thera Benefit Maximum $0.00 $0.00 Two se arate authorizadons for 30 visiu of PT - sunilar dia osis Schools
200 Ou atient Thera Benefit Maximum $0.00 $0.00 Two se arate authorizadons for 30 visiu of PT - sunilar dia osis Schools
201 Ou adent Thera Benefit Maximum $0.00 $0.00 Two se arate authorizadons for 30 visiu of PT - sunilar dia osis Schools
202 Ou adent Thera Benefit Maximum $0.00 $0.00 Se arate marz for each ou atient thera Ci
203 Ou auent Thera Benefit Maximum $0.00 $0.00 Se arate max for each ou atient thera Ci
204 Ou atient Thera BeneFit Ma~cimum $0.00 $0.00 Se arate ma~c for each out atient thera Ci
205 Ou atient Thera Benefit Ma~cimum $0.00 $0.00 Se arete ma~c for each ou atient thera Ci
206 Ou atient Thera Benefit Maximum $0.00 $0.00 Se axate ma~c for each ou adent thera Ci
207 Ou arient Thera Benefit Mazcimum $0.00 $0.00 Se arate max for each ou atient thera Ci
208 Ou arient Thera Bene£it Maximum $0.00 $0.00 Se arate max for each ou atient thera Ci
209 Ou atient Thera Benefi~ Ma~cimum $0.00 $0.00 Se arate ma~c for each ou atient thera Ci
210 Ou adent Thera Benefit Maacimum $0.00 $0.00 Se arate ma~c for each ou atient thera Ci
211 Ou arient Thera Benefit Maximum $0.00 $0.00 Se arate max for each ou atient thera Ci
212 Ou atient Thera Benefit Maacimum $0.00 $0.00 Se arate ma~c £or each out atient thera Ci
213 Ou atient Thera Benefit Maximum $0.00 $0.00 Se ardte max for each out atient thera Ci
214 Ou auent Thera Benefit Maximum $0.00 $0.00 $e arate max for each ou atient thera Ci
215 Ou arient Thera Benefit Maximum $0.00 $0.00 Se arate max For each out atient thera Ci -
216 Ou arient Thera Benefit Maximum $0.00 $0.00 Se arate maac for each ou atient thera Ci
217 Ou atient Thera Benefit Maacimum $275.61 $0.00 Error Ci
218 Ou adent Thera Benefit Maximum $0.00 $0.00 Se arate mas for each out atient thera Ci
219 PHCS POS Benefit $0.00 $0.00 Authorized to rocess as in network Schools
220 PHCS POS Benefic $0.00 $0.00 Member met ouo-of- ocket Ci -
221 Pricin $0.00 $0.00 Coxrect rcent of char e er URN contract for trans lant Ci
222 Pricin $0.00 $0.00 Paid coaectl r DRG case rate Schools
223 Pricin $0.00 $0.00 Correct rcent of char e Schools
224 Pricin $0.00 $0.00 Correct r da rate Schools
225 Pricin $0.00 $0.00 Paid correctl for obal trans ]ant Ci
226 Conttact Audit $0.00 $0.00 Non ar rovider Ci
227 Conttact Audit $0.00 $852.00 Findin from reviovs audit - onl allow rima sur e Schools
228 Contract Audit $0.00 $1,925.00 Findin from revious audit - onl allow rima sur e Schools
229 Contract Audit $0.00 $2,427.00 Findin from revious audit - onl allow rima sur e Ci -
523,751.03 516,869.70
August 27, 2010 Page 4
~#PRENDIX ~'-
QUT-Q-F-S~AMPLE GLAIMS
- Healthcare
Horizons
Consulting Group, Inc.
CITY QF VIRGINIA ~~A~H
APPENDIX B
OUT-OF-SAMPLE CLAIMS
230 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
231 Other Insurence $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A SchooLs
232 O[her Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
233 Other Insurence $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
234 Other Insurance $0.00 $0.00 Services covered mmder Medicare Part B, member onl has Part A Schools
235 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Pan A Schools
236 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, membex onl has Part A Schools
237 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
238 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
239 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
240 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member oni has Part A Schools
241 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
242 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schoo]s
243 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
244 Other Insurance $0.00 $0.00 Services covered mmder Medicaze Part B, member onl has Part A Schools
245 Other Insurance $0.00 $0.00 Services covered mmder Medicaze Part B, member onl has Part A Schools
246 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
247 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Pazt A Schools
248 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Pazt A Schools
249 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A SchooLs
250 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
251 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
252 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A SchooLs
253 Other Insurance $0.00 $0.00 Services covered under Medicare Pan B, member onl has Pazt A SchooLs
254 Other Insurance $0.00 $0.00 Services covered under Medicare Part $ member onl has Part A Schools
255 Other Insurance $0.00 $0.00 Services covered under Medicare Parc B, member onl has Part A SchooLs
256 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
257 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
258 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
259 Other Insurence $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A SchooLs
260 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
261 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
262 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A SchooLs
263 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
264 Other Insurance $0.00 $0.00 Services covered under Medicare Part B, member onl has Part A Schools
265 Other Insurance $0.00 $0.00 Services covered mmder Medicaze Part B, member onl has Pazt A Schools
266 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Parc A Schools
267 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
268 Other Insurance $0.00 $0.00 Services covered under Medicaze Part B, member onl has Part A Schools
269 Mulri le Procedure Reducdons $0.00 $0.00 Prim rocedure - informational onl Schools
270 Mulri le Procedure Reducdons $38.55 $0.00 Missed 50%reducrion Schools
271 Mula le Procedure Reducdons $0.00 $0.00 Prim rocedure - informadonal onl Ci
272 Mula le Procedure Reducaons $0.00 $35.11 Missed 50% reducrion Ci
273 Mula le Procedure Reductions $0.00 $0.00 Pzima rocedure - informational onl Schools
274 Mula le Procedure Reductions $42.71 $0.00 Missed 50% reduction Schools
275 Multi le Procedure Reductions $0.00 $0.00 Pruna rocedure - informaaonal onl SchooLs
276 Mulri le Procedure Reductions $0.00 $37.04 Missed 50% reducdon Schools
277 Mulri le Procedure Reductions $0.00 $0.00 Prima rocedure - informational onl Schools
278 Multi le Procedure Reductions $0.00 $700.00 Missed medical edit for unbundlin Schools
279 Mula le Procedure Reductions $0.00 $1,944.00 Should onl allow sin le case rate Schools
280 Mula le Procedure Reducrions $0.00 $0.00 Correct claim with co a SchooLs
281 Multi le Procedure Reductions $0.00 $0.00 Correct claim with co a Schools
282 Multi le Procedure Reductions $0.00 $1,763.00 Should onl allow sin le case rate Schools
283 Multi le Procedure Reducdons $0.00 $0.00 Correct claim with co a Cit
284 Multi le Procedure Reductions $0.00 $1,763.00 Should onl allow sin le case rate Ci
285 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
286 Ou atient Sur e Co a $0.00 $0.00 False labor - no co a re uired Schools
287 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
288 Out atient Suz e Co a $100.00 $0.00 Missed co a Schools
289 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
August 27, 2010 Page 1
- Healthcare
Horizons
Consulting Group, Inc.
~ITY OF VIRGINIA ~EACH
APPENDIX B
OUT-OF-SAMPLE CLAIMS
290 Out atient Sur e Co a $100.00 $0.00 Missed co Schools
291 Out acient Sur e Co a $100.00 $0.00 Missed co a Schools
292 Ou[ atient Sur e Co a $100.00 $0.00 Missed co Schools
293 Ouc atient Sur e Co a $100.00 $0.00 Missed co Schools
294 Ouc atient Sur e Co a $100.00 $0.00 Missed co a Schools
295 Ouc atient Sur e Co a $100.00 $0.00 Missed co a Schools
296 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
297 Out atient Sur e Co a $100.00 $0.00 Missed co a Ci
298 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
299 Out atient Sur e Co a $100.00 $0.00 Missed co a Schools
51,481.26 56,242.15
August 27, Z010 Page 2
APPENQIX ~
ORTlMA RESPQNSE
~
O tima:Health~~
p
August 25, 2010
Mr. Lyndon Remias
City Auditor
City of Virginia Beach
2401 Courthouse Drive
Virginia Beach, VA 23456
RE: 2009 Health Plan Audit
Dear Lyndon,
Optima Health
4417 Corporation Lane
Virginia Beach, Virginia 23462
Tel 757-687-6060
Fax 757-687-6031
www. opti m ah ealth.com
Thank you for the opportunity to respond to the Optima Health Claims Audit Report for the The City of
Virginia Beach and The School Board of the City of Virginia Beach prepared by Healthcare Horizons
dated July 26, 2010. As you know this is the second year we have had a 100% medical claims audit
conducted by Healthcare Horizons. For this recent audit, over 278,700 claims were reviewed by
Healthcare Horizons representing over $61 million in paid claims for the City and Schools. The end
result was a 99.9°Io financial accuracy. We hope you and others within the City and Schools will be
pleased with the result. We believe this helps validate Optima Health as the best in class health plan
partner for the City and Schools.
Below please find our response to the findings as listed in the Healthcare Horizons report.
Health Plan Audit findings by category:
1. Duplicates
There may be instances where a provider has sent the same came to the health plan twice. We
have a process in place to ensure that duplicate claims are processed correctly which involves
running a daily report for possible duplicates. As noted in the findings by Healthcare Horizons
"Optima has effective procedures in place to prevent duplicate payments...no additional follow-
up is required in this area. "
2. Identification of Primary Payor
There were two claims identified where other insurance should have paid as primary. One of
these claims had already been corrected prior to the on-site audit. The recommendation was for
Optima Health to have process in place to identify claims impacted by updated insurance
information for processing. Once we receive information a member has dual coverage, we
validate the other insurance with the other carrier and the effective date, update the member's
information in the system, and reprocess any applicable claims.
A Service of Sentara
Mr. Lyndon Remias
August 25, 2010
Page 2
3. Multiple Procedure Reduction Opportunities
The recommendation was for Optima Health to develop a process to identify multiple procedure
claims reduction opportunities when providers bill on separate claims. Optima Health Plan has
akeady developed a process to identify multiple procedure claims reduction opportunities with
an Alert System for our claims processors. We continue to add additional post audit processes in
our day to day operations to identify multiple procedure claims reduction opportunities.
4. Eligibility/Retroactive Terminations
A suggestion was made for Optima Health to monitor eligibility recoveries monthly to ensure
that claims are adjusted on a timely basis. Each month, we run a termination report and will
reverse claims associated with a terminated member. We are also conducting internal audits on
the retro termination reports, and depend on the City and Schools to notify us on a timely basis
so we can retract applicable claims.
5. Outpatient Surgery Copay
A small amount of claims did not have the $100 Outpatient Surgery Copay applied to the claim.
There were a total of eight agreed upon during the on-site visit, and an additional fifteen
identified throughout the entire set of claims. Based on the findings we are researching unique
billing scenarios to identify opportunities to ensure the applicable copay is applied to the claim.
Again, this only applied to a small number of claims throughout the entire set of claims.
6. Office Visit Copay
There was a small set of claims in question, totaling $1,498, where the $20 office visit was not
applied on a claim when the $100 deductible applied. Based on our research, this is correct. A
claim will only pull a copay, when the deductible is applied, if the service being rendered
requires a copay.
7. Medicare Part B
Healthcare Horizons identified a member who was eligible for Medicare Part B but did not elect
to pay for the coverage, resulting in a higher amount paid by the City. The recommendation was
to explore options with Optima Health to limit this from happening so members do not have an
incentive to refuse Part B. Currently, Optima Health does not have any policies or procedures in
place to require a member to have Medicare Part B.
8. Outpatient Therapy
The request was for Optima Health to provide feedback on why authorizations were given for
separate illnesses or conditions where there was a minor variation in the diagnosis. The City and
Schools outpatient therapy benefit is set up to be administered at covered up to 30 visits per
illness or condition. A provider can request authorization for up to 30 visits for a different
diagnosis, different illness or condition, or different benefit such as Physical Therapy versus
Speech Therapy. We're happy to revisit the administration of this benefit if it is desired.
A Service of SenWra
Mr. Lyndon Remias
August 25, 2010
Page 3
9. Other Insurance
Healthcare Horizons recommended that Optima consider limiting the secondary payment by
combining primary and secondary payments to our allowable fee schedule. We did consider this
a possible method in the prior audit as noted in our follow up. However, we believe that the
most efficient way to administer coordination of benefits is to continue with our current policy
of paying the secondary insurance based off of the primary insurance explanation of benefits. As
noted in the prior audit by Healthcare Horizons, this process is not unreasonabl~ and has been
found in other health plan audits.
10. Multiple Procedure Reduction Opportunities
Optima Health has a process to identify multiple procedure claims reduction opportunities with
an Alert System for our claims processors. When these provider claims are being processed, the
claims processor will receive an alert to verify or review other provider claims for the same
procedure on the same date of service. There were three claims noted by Healthcare Horizons
we had corrected as part of an internal audit prior to their identification by Healthcare Horizons.
11. Optima Health Audit Vendors
Optima. Health does contract with external audit vendors to conduct internal audits. Specifically,
we've contracted with Price Waterhouse to audit our claims processing. We also contract with
KPMG to audit our internal controls to be in compliance with the Model Audit Rule. As
referenced in the findings, Optima Health's Special Investigations Unit contracts with two
vendors, Sentinal and CGI Federal Incorporated to help identify irregular billing patterns.
Claims being reviewed by these vendors include all claims processed by the health plan,
including those for Virginia Beach City and Schools.
12. Systemic Errors
As noted by Healthcare Horizons, they did not identify other areas of concern for systemic
overpayment, therefore no action is need on this item.
Again, thank you for the opportunity to respond. We look forward to our continued partnership and
providing a quality health plan for the Virginia Beach City and School employees and family members.
If you have any questions or need anything further please let me know. I can be reached at 687-6060 or
srfuaua @ sentara. com.
Sincerely,
~Ccc y ~ ~~,~^y..~--
Stacy Fuqua
Sr. Client Executive
A Service of Sentara