Case studies: Delayed Medicaid payments, unassigned codes and more

March 28, 2016

Below are some of the latest case studies from the team at Vachette Pathology & Stark Medical Auditing.

Case No. 1: Unassigned codes affect annual bonus

calculator-385506_1280Problem: A hospital-employed group has a clause in its contract that grants the group a bonus each year if the physicians meet a certain relative-value unit (RVU) threshold. However, the physicians were informed they narrowly missed the threshold in both 2014 and 2015 despite believing they had met their goal.

Process: As part of a contract with the group, Stark tracks the RVU threshold on a monthly basis. While examining data in the reporting from their third-party biller back down to the CPT code level, we identified four codes that were not assigned an RVU in 2015 and therefore were not being counted toward the goal. The error was uncovered while the group’s client manager was reviewing a monthly report that showed zero work RVU’s calculated for the codes in question. The find on was then verified by using Medicare’s “Fee Lookup” tool to confirm there were work RVU’s assigned for those codes. After following up to ensure the missing codes were retroactively assigned with RVUs, we expect the group will meet its bonus threshold for 2015. The CPT detail for 2014 also is under review in case similar errors were made.


  • Perform quarterly audits to ensure the integrity of data reporting from your biller.
  • Consider a third-party auditor to verify results. If a group relies on reporting from its biller to submit data for bonuses similar to this, it has only the biller’s assurances that the data is correct. A third-party auditor can track this data regularly to discover reporting issues before they begin affecting your revenue.


Case No. 2:  Delayed start for state managed Medicaid causes payment gaps

Problem: A behavioral health provider in Iowa was not receiving Medicaid payments because of the delayed start of the state’s managed care program.

Process: The transition from traditional Medicaid to a managed Medicaid product is causing headaches for many behavioral health care providers, as the Iowa provider undergoing this transition can attest. Although CMS planned to launch Iowa’s managed care program in January after terminating the previous managed care organization’s (MCO) Medicaid contract in December, multiple start-date delays from CMS have led to a months-long payment gap.

The Iowa provider is part of an association that’s working aggressively to develop contracts with the new MCOs. However, the delay in the start date for the new MCOs created issues because the state program itself (Iowa Medicaid Enterprise) did not create a contingency plan for this delayed start. Because of this lack of foresight, IME is now handling all of the behavioral health care claims processing on a rather outdated technology platform with limited staffing. On top that, IME has been providing different directions for claim filing to each provider, which has required the providers to restructure internal systems to get claims processed efficiently and out the door.

“It’s been a huge issue and many providers are just now starting to see payments here in March,” said Jessica Jankowski, executive client administrator for Vachette and Stark. “However, several of their services still aren’t being paid for various reasons that IME has yet to explain.”


  • Start preparing for change now if you know an MCO is coming in. Most of the population in states following this route will have to choose a managed Medicaid product.
  • Learn how this transition could affect your payer mix, how the networks are structured and if you will need additional contracts, among other important details.


Case No. 3: Revenue lost in translation

dollar-941246_1920Problem: A Midwest pathology group potentially lost $758,000 because of an unusual glitch in their third-party biller’s system interface that caused a particular code to disappear on 4% of accessions when sent out for payment.

Process: The affected code was being transmitted properly for payment in the majority of cases, but the practice risked losing revenue because of timely filing denials.

Because the error was discovered on accessions being sent to two insurers, the problem was determined to be an IT issue on the billing agency’s end. This audit uncovered hard proof from recent dates of service that the issue has yet to be resolved.


  • Work with the billing agency’s IT department. Bring the hard proof to its attention.
  • Have the biller complete a 100% charge capture comparison from the actual hard copy report to what they have on file to make sure that all of the charges are making it over from the file and getting billed.
  • Ensure IT puts a fix in place when the source of the error is determined.

Questions about how we can help maximize your practice’s revenue stream? Contact Mick Raich, president of Vachette and Stark, at or call us at 517-486-4262. Audit assistance is provided by Billie Morawski, audit coordinator for Vachette Pathology and Stark Medical Auditing.

Who's reviewing revenue strategy with you at this time?

Are you billing all the correct CPT codes? You’d be surprised at what you might be missing. We will review your Fee Schedule/Charge Master at no cost.

That’s right. For free.

Share This