Carrier’s confusion over third-party policy causes improper denials

June 5, 2018

As labs across the nation continue to adjust to requirements of recently implemented prior-authorization programs, it appears the private payers partnering with these services are experiencing some confusion as well.

While conducting a recent billing audit for a South Carolina-based pathology group, we found several accounts that were allowed at less than the anticipated reimbursement amount. When reviewing these cases with our client’s biller, we determined the issue was stemming from an apparent limit on 88305 units.

In one instance, the group billed 13 units, but the carrier processed the allowed amount as only six units, according to the EOB. When questioned on this decision, the carrier responded by referencing a suggested policy from their prior-authorization partner stating prostate biopsies will be capped at six units to prevent fraud and abuse.

The issue? The carrier later clarified it had never officially adopted the policy, which means there should not have been denials related to it. However, the carrier was equally confused when it discovered that despite the 13 unites being submitted, only the six that were eventually paid were received by their system. The carrier was unable to explain what caused the number of units to be automatically reduced, but is now digging into the issue based on our discovery.

In total, we worked with our client’s biller to find 81 accounts that fell outside the expected allowed amount based on this issue.

While we expect to have clarification from the carrier soon, who knows how long this issue would have gone undetected had our client not engaged us to review their billing.

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