In 2016, Medicare recipients spent over $5,000 in out-of-pocket expenses. If you did not have any supplemental coverage during this time, you could have paid up to $7,400 out of pocket.
The insurance and healthcare industry is a tricky field to navigate. A retrospective review validates claims, payment, and coverage from services already received.
Keep reading to understand the intricacies of healthcare so you can get a better understanding of how insurance works.
What Is Retrospective Review?
Under the umbrella term of utilization management falls retrospective review. As you may realize from the prefix “retro”, this step happens after you have received health services. It even occurs after the bill is submitted.
The retrospective review process looks at the entire hospital stay and pre-authorization to determine if the billing is accurate and the services were medically necessary.
ICD and CPT codes are examined and are either accepted or denied. If the service is denied, then the provider can issue an appeal. However, denials don’t just happen when the review team determines that something was not medically necessary.
Sometimes denials happen because a patient’s insurance plan does not cover it. Retrospective review is also useful to determine if services that were performed emergently were necessary. Additionally, if a patient is unconscious and unable to go through the pre-certification process, this review stage is critical.
Importance of Retrospective Review
In America, costs of healthcare services are rising along with chronic diseases. Now more than ever you have seen filled ICU beds and lengthy hospital stays. COVID-19 has played a large part in overly stretched hospital capacities.
It is becoming more important to keep everything within the healthcare industry in check. The term medical necessity is gaining more spotlight. The CDC describes it as necessary to the patient and diagnosis and not just a convenient service or provision.
These review processes started with the creation of Medicare and Medicaid in the 1960s. Since then Medicare has evolved to encompass Medicare severity-diagnosis-related groups or MS-DRGs.
MS-DRGs are important to understand because the retrospective review process is loosely based on this concept.
What MS-DRGs ultimately gives guidance on hospital stays and appropriate services. The longest MS-DRG is 100 days. It has recently expanded to include more diagnoses and ultimately reimburses the hospital based on level of severity and length of stay.
It also categorizes patients with certain diagnoses to evaluate what level of care they should receive. While there are still holes in the concept, it is what the aim of utilization management strives for.
The goal is to categorize diseases and patient clientele to gain a better understanding of what type of services and stays the patient should receive. If a service is outside of the scope of what the review board thinks is necessary, then it should be denied.
What happens if a medical service gets denied?
You can file an appeal during this time where you and your physician send in the necessary paperwork to back up your stance. Your case will be compared to others with similar conditions under the scrutiny of other physicians and qualified healthcare agents.
When you have done your part, the insurance company has a specific time frame they have to respond by – usually within 60 days. If your insurance company does not respond by this time frame then they are responsible for covering the cost.
However, if they do answer your appeal with another denial form, then you have a couple of options. You can fork out the money or look into external appeal. The second option is dependent on your state laws and third-party review organizations.
It is useful to understanding healthcare terms before diving into the review process. Most people receive insurance plans through their job. However, if you are an independent contractor or freelancer, you might have to purchase private insurance.
Government plans are only offered to certain individuals who meet specific criteria. In a nutshell, Medicaid qualifies on income whereas, individuals qualify for Medicare on their age.
For the rest of Americans, there are few different types of health insurance. A health maintenance organization (HMO) limits you to in-network providers. This could be a specific hospital group in your state or certain providers.
A preferred provider program (PPO) does not require you to see your primary care physician before seeing a specialist. Additionally, you are not limited to in-network providers. Keep in mind, the cost is likely cheaper to see someone within your network.
A point of service (POS) plan is like a PPO. It will cover out-of-network physicians (at a higher cost) but requires you to see your primary doctor before a specialist.
These are the most popular and mainstream insurance plans on the marketplace. When you review your insurance plan you will see words like premium, deductible, and out-of-pocket maximum.
The premium is your monthly out-of-pocket expense to remain insured. It is usually a set rate for the entire year. The deductible is the amount you have to reach before insurance will start covering the cost.
Most preventive care and annual physicals are free of charge even if you have not met your deductible. Lastly, your out-of-pocket maximum is the most you will pay in a given year before insurance will cover the rest.
Telemedicine has been hanging around for a while, but the COVID-19 pandemic shot telehealth into the spotlight. Most insurances these days cover part of the telemedicine costs.
Why is this beneficial?
You can reach out to your doctor from the comfort of your own home or work. This is useful if you have a simple follow-up question or a medication review. It also reduces the risk of exposure by avoiding in-person office visits and decreases overall costs.
Once you have visited the doctor, you will likely receive an electronic or paper statement of your bill and visit. Understanding all the numbers, words, and medical terms is confusing.
Revenue codes are three to four-digit numbers that link back to a service provided. This tells your insurance agent where you received the health service. If a revenue code is not on your statement then the insurance company can reject the claim.
You will also see codes listed that describe what type of treatment you received or a diagnosis.
Codes for the International Classification of Diseases (ICD) will label what your diagnosis is. This is useful for tracking diseases and illnesses.
Current Procedural Terminology (CPT) codes are services provided. You will see physical therapists and nurses inputting these codes for their billing. Why is this important? The ICD and CPT codes should be relevant to each other and the general state of the patient.
Insurances will look at these codes and accept or reject them based on all of these factors.
Medical auditing is something no one wants to hear. But what exactly is it and how does it tie into the review process?
Audits look towards payer reimbursement and compliance with regulations. These audits can review the care provided to the patient, assess hospital policies, and check appropriate revenue.
Essentially, this process works toward making sure that a hospital or organization is functioning to state and federal regulations. It can also ensure that the patient is treated fairly and the medical charges are accurate.
Medical audits don’t only affect large hospital organizations. Oftentimes, legal guidelines require other healthcare professionals to follow certain guidelines. This means they can only offer the services under their qualifications.
Healthcare workers who fall under this realm are physical therapists, respiratory therapists, lab technicians, and pharmacists. They provide a level of specialized care and therefore can only work within their scope of practice.
Are you overwhelmed yet? Hopefully, you have a better understanding of how insurance and the healthcare system works from a basic level.
Utilization management includes three separate stages of the authorization and review aspects. Ultimately, this entire process manages the overall cost of procedures and services.
Utilization management includes pre-authorization, concurrent review, and retrospective review (more on this later). Have you heard of needing a pre-authorization before surgery? Well – this is where it comes into play.
Basically, it coordinates the care of a patient before anything actually happens. While this is useful to specify costs and insurance coverage, sometimes it can lengthen the time of receiving care.
The concurrent review extends over the entire time the patient is receiving care. This usually happens once the patient is admitted into the facility. The design of concurrent review is to make sure that the patient is receiving appropriate services and to oversee their care.
Again – it sounds good on paper but the reality is always more complicated. For instance, patients could receive an earlier discharge than is recommended by healthcare staffing.
This is why you always hear it stressed on healthcare workers to have skilled and quality documentation. It could make it or break it for someone.
A Consultant Can Help
Healthcare consultants work by helping you navigate the difficult healthcare industry. If you are trying to understand a retrospective review process, you shouldn’t be alone.
Check out our professional service with skilled consultants who can walk you through the process and answer any of your health care or insurance questions.