The Medata Specialty Review Unit negotiates high dollar bills that are flagged by Core, and our expert users based on a three part bill reasonableness methodology.

First, the medical necessity for services provided for the documented medical condition is evaluated. This includes the levels of service, any supplemental providers beyond the primary, i.e. assistant surgeon, and supplies. Next, we calculate an amount that is reasonable for those services using a proprietary database that spans 400 million bills over 51 jurisdictions as well as any standardized industry sources such as Redbook or the DME/POS files. Finally, we adjust for the geographic component.

Medicare spent 10 years evaluating and grouping necessary levels of service for medical procedures. This allows a weighting of time, materials and supplies from a facility or physician for appropriate levels of complexity per procedure. Using that work as a baseline, Medata also reviews the physician’s report of how the surgery occurred to compare with recommended services from various medical treatment guidelines and data sources. For work-related injuries, we primarily use the following:

• ACEOM guidelines
• AAOS guidelines AAOS Global Data
• CPT Code rules
• ODG
• Chiropractic Association Edits
• CCI edits
• PDR

Additionally, we complete a drug utilization analysis. During the drug review, we review for delivery, appropriateness, drug interactions, dosing, and compounding. Lastly, we compare the billed services to our database of bills to evaluate for any extraordinary use of procedure codes or utilization against bills with the same ICD-9 codes.

The determination of level is made by tying specific performed procedures to accepted billing rules. Billed CPT codes are compared to the physician’s report to ensure accuracy of the billing. Any discrepancies in the levels of billed services and the coding expectations are noted. We also review the Medicare published CPT crosswalk to match the actual procedure performed by the physician to the level of resource utilization required by the facility.

After the initial analysis, we may refer to a specialty physician panel member who critically evaluates all billed services, compares those to the evidence-based approved services, and medically scrutinizes relatedness of the services that are in question. Factoring in severity, co-morbidities, and patient demographics, the specialist considers the appropriateness of the application of coding rules for the ICD-9 code on the bill. This allows for any extenuating circumstances that would cause justification for any outliers. The panel physician then reports his findings regarding the medical rationale behind the need for additional information for any services not included in the recommendation. Once we have finalized the list of services, we use the DRG, APC, or ASC from Medicare to determine the levels of facility resource needed for the involved patient. We use this as a source with the understanding that most providers and facilities have peers in their specialty and geography who accept these amounts as full payment for like services in like conditions. When using the Medicare payment amounts, we calculate a rate at 150% of the Medicare reimbursement.

The geographic adjustment is derived from the Medicare Wage Index. Factors mainly consist of wages and overhead. Both sources utilize the concept of MSA. Cities are grouped in large urban areas with common cost factors, such as commercial real estate values.

The Medicare Wage Index is a multiplier, with 1.000 as the mean. The Index includes both direct and indirect salaries, including benefits such as health insurance premiums and related administrative costs. Some, but not all, contract labor costs for direct patient care are included; skilled nursing services are excluded. There is ample opportunity for interested parties to comment on the Medicare Wage Index through public input and revisions as it gets published in the Federal Register.

From the MSA, it is then further refined to the zip code level using a previously published Medicare zip code crosswalk. This will purposefully cause increases or decreases in the base allowance from national averages.

The audit then proceeds to the application of a recommended allowance. Here, we compare the provider or facility to the same service provider in their geographic area. Medata has collected workers’ compensation bill data for over 25 years and our experience includes over 400 million bills, the amount of information we have available is beyond any other bill review company in the industry. We have been using that depth and breadth of information as a fair payment evaluation to the provider.

Payment

It is our intention to ensure facilities and providers are paid every penny they are due and not one more. Through the medical necessity review and cost component processes, we are able to recommend allowances 40% to 70% less than the billed charges. If the provider would like to negotiate above that level due to justification of services or costs, we are willing to re-evaluate based on the additional information.