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Controlling workers' compensation costs.

Providers should try to prevent as many losses as possible through inservices on proper lifting techniques, placing wet-floor signs while mopping, etc. The losses which can't be prevented must be controlled. Implement easy-to-understand, yet effective, policies and procedures, making the injured employees and insurance carrier accountable. Stop relying exclusively on those traditionally relied upon to provide risk management services. Brokers/agents seldom have the technical training in all aspects of insurance or the knowledge of the day-to-day operations of an employer. Insurance companies are more concerned about their costs than how ineffective claims handling and inadvertent over-reserving affects a facility's day-to-day operations and premiums. If an employer is large enough, it should hire someone in-house or subcontract risk management services if the service company proves that it knows how to implement and monitor a cost-effective risk management program. Taking the old adage, "you have to spend money to make money," one step further: "you have to spend a little money to save lots of money."

Cost Control↗

A new tier of health care management initiatives.

Some employers spend half their health benefits dollars on outpatient care. Utilization of ambulatory services is up, costs-per-case are escalating fast--with some procedures demonstrably costing 85%-95% of inpatient charges--and providers' profits are increasing. Executives of the Health Data Institute and The Associated Group describe a multi-pronged approached to managing the burgeoning costs of a health care delivery alternative that was supposed to save employers money.

Ambulatory Surgical Procedures↗

Where is the financial safety net for managed care physicians?

OBJECTIVE: Empiric research on mechanisms by which managed care physicians attempt to mitigate financial risk is lacking. We assumed the perspective of a managed care plan in investigating the relationship between risk sharing and the match between a physician's capitation payments and costs of care. DESIGN: The study design was a family of payment simulations using 2 years of managed care claims data. METHODS: Claims from a cohort of 82,525 managed care patients were used, with year 1 data determining a capitation rate for year 2 primary care services. The net provider payment in year 2 was examined under scenarios that might modify financial outcomes, including stop-loss insurance, age- and gender-adjustment of capitation, and risk pooling within independent practice associations. RESULTS: The size of a provider's patient panel was positively correlated with net per capita payment (r = 0.22; P < 0.0001 without risk modification strategies). The variance of the ratio of net to total revenue was utilized as a proxy for the degree of risk assumed in caring for a panel of capitated enrollees. Risk modification strategies reduced this variance measure, with risk pooling producing the largest effect, especially for providers of panels of fewer than 135 patients. In contrast, age- and gender-adjustment of capitation payments had little effect on reimbursement outcomes. CONCLUSIONS: Short of increasing the pool of capitated patients, risk modification strategies appear limited in their ability to produce more equitable reimbursement to providers with small patient panels. With many providers assuming substantial risk in pursuing managed care contracts, these dynamics may favor organizational forms of medical practice that facilitate large patient panels within a single plan.

Capitation Fee↗

Pharmacist compensation for ambulatory patient care services.

UNLABELLED: This activity is designed for pharmacists practicing in ambulatory, community, and managed care environments. GOAL: To discuss issues involved in the transition from product-based to patient-care-based reimbursement and compensation systems for pharmacists. OBJECTIVES: 1. Differentiate between reimbursement and compensation. 2. Describe the limitations of current third-party reimbursement and compensation systems. 3. Describe ways in which compensation for seemingly identical products and services can vary. 4. Discuss the use of Medicare's Resource-Based Value Scale and the relative value unit. 5. Define and differentiate between ICD-9-CM codes and E/M CPT codes. 6. List the three key components needed to determine an E/M CPT code for a new patient seen in the pharmacy. 7. Describe and provide examples of the SOAP method of documentation. 8. Understand why the referral process is an important step in the compensation process. 9. Discuss the importance of Form HCFA-1500 and other documentation in the compensation process.

Abstracting and Indexing↗

Medically necessary?

Coverage decisions can ultimately be traced back to three words in the original health policy contract: medically necessary and investigational. Investigational as a coverage exclusion applies to the minority of cases, in which there is inadequate data to validate the effectiveness of the intervention. In contrast, the majority of coverage decisions are based on medical necessity. Over the years the concept of medical necessity has evolved to encompass a multitude of medical management strategies. This discussion highlights the variable uses of the concept of medical necessity in terms of: (1) Determining the most appropriate intensity of service and place of service; (2) determining whether the proposed therapy is medically appropriate for the patient's condition; (3) distinguishing between medically necessary services and those that are performance enhancing or discretionary in nature; (4) making a distinction between medically necessary, cosmetic, and reconstructive services; and (5) defining medical necessity in accordance with generally accepted principles of good medical practice.

Decision Making↗

Is prior authorization of topical tretinoin for acne cost effective?

OBJECTIVE: To determine whether prior authorization of topical tretinoin for acne is in the best interest of health insurers and, if so, to determine the optimal prior authorization age for topical tretinoin. STUDY DESIGN: A retrospective, cross-sectional study of data from the National Ambulatory Medical Care Survey was performed. PATIENTS AND METHODS: We performed a sensitivity analysis using published data on the age distribution for topical tretinoin prescriptions for acne and nonacne indications to estimate the cost of topical tretinoin and the cost of performing prior authorizations as a function of the prior authorization age. RESULTS: A prior authorization age of 25 for topical tretinoin is not cost effective for health insurers. If prior authorization is required, an age threshold of 35 or older is most cost effective. The total cost of topical tretinoin (the sum of the drug costs plus the prior authorization costs) changes little with changes in the prior authorization age; if the prior authorization age is set too low, total costs increase (because the number of prior authorizations increase). CONCLUSIONS: Prior authorization for topical tretinoin is of no great benefit to insurers. As the prior authorization age decreases, the cost of requiring prior authorization increases. Eliminating prior authorization altogether would result in at most a small increase in costs and would be balanced by the benefits to both patients and physicians.

Acne Vulgaris↗

[Insurance expert assessment of traumatic Achilles tendon rupture. A case report].

Achilles tendon ruptures are among of the most frequent tendon ruptures. Usually middle aged men with infrequent sports activity are involved. In most cases histopathology reveals degenerative changes within the tendon. Unusual rupture location and physical signs of trauma should lead one to consider a traumatic origin of the rupture. Traumatic origin can be confirmed by the accident history and physical signs as well as with the histopathology of the rupture site and possibly a tissue section far away the rupture site. This information can be helpful in insurance inquiries.

Achilles Tendon↗