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Pre-Payment Edits

Prepayment review occurs when the Fiscal Intermediary Standard System (FISS) edits suspend a claim for medical review before the claim is paid. Prepayment edits are designed to prevent payment for noncovered and/or not medically necessary services. Prepayment edits are established, modified and evaluated for effectiveness on an ongoing basis. Below is a listing of the various types of pre-payment edit that may be utilized for prepayment review.

Automated Edits (CMS Pub. 100-08, Ch. 3, § PDF)

CGS utilizes the Expert Claims Processing System (ECPS). The ECPS is located within FISS to make decisions and resolve edits during claims processing. ECPS may pay, deny or route the claim to Medical Review for further development.

New Provider/New Benefit Edits (CMS Pub. 100-08, Ch. 3, §3.1BExternal PDF)

CGS may monitor the billing patterns of new providers and new benefits through data analysis. New provider review is generally limited to 20-40 claims. New benefit edits are utilized until coverage, coding, and billing are appropriately utilized. The optimal result of these edits is when providers utilize benefits and bill Medicare appropriately.

Provider Specific Probe Edits (CMS Pub. 100-08, Ch. 3, §3.2.2AExternal PDF)

These edits select claims from a specific provider who has been identified as having a potential problem identified through their billing patterns, Medicare's knowledge of service area abuses, and/or complaints received by Medicare. The provider is notified in writing that a probe review (sample of 20-40 claims) is being conducted.

When the provider specific probe edits are complete, and it is found that there is a high incidence of inappropriate billing, a provider may be placed on Targeted Review (TR).

Referral Edits

Referral edits are based on a referral from other entities, for example the state surveyor after identifying potential unusual billing patterns or practices. Providers are notified by letter when they have been placed on a referral edit. The source of the referral is not disclosed.

Provider Specific Targeted Review (TR)

TR edits may focus on an issue found in data and reviewed in the provider specific probe edit, or may simply pull a percentage of any claims billed by that provider. At the end of each quarter, the effectiveness of all TR edits will be evaluated and individual provider error rates will be calculated. Based on the error rate of claims reviewed during the previous quarter, a provider may be placed on TR. Providers remain on TR for a three-month period. The percentage of claims selected for medical review is dependent upon the provider's percentage of denials and the length of time the provider has been on TR.

At the end of each quarter, the provider's error rate will be re-evaluated to determine if continued review is appropriate. If the provider's denial rate meets acceptable parameters in accordance with the Progressive Corrective Action Memorandum, they will be removed from TR.

If a provider remains on TR for more than three quarters, or does not improve their denial rate, the provider may be referred to the Unified Program Integrity Contractor (UPIC).

Widespread Edits

CGS will review claims with the greatest risk of inappropriate program payment, this includes areas that have been identified through data analysis. The following list provides examples of widespread edits but is not all inclusive.

  • Length of stay or number of visits
  • Revenue and/or HCPCS
  • Diagnosis and may include ICD-9/ICD-10 codes in relation to revenue codes

Updated: 12.12.19


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