Podcast: A better approach to clinical appropriateness in claims payment

Are you asking the right questions when determining whether your claims are clinically appropriate? For example, were the diagnoses billed supported by clinical indicators in the records? Was the correct clinical setting assigned and billed based on nationally recognized guidelines? The process of reviewing claims and charts for clinical appropriateness is crucial for your business as you look to curb improper payments and reduce fraud, waste, and abuse. 

Listen to Cotiviti's podcast to learn how to:

  • Ensure claims are clinically appropriate through a combination of coordinated technology and human review 
  • Hire and train nurses for effective and up-to-date review of claims and charts
  • Discuss clinical appropriateness with providers without increasing abrasion

What is clinical appropriateness in the context of a health plan’s payment integrity program, and why is it important?

Marla: The important thing to note is the distinction between coding regulations and clinical audit. Both Coding Validation and Clinical Chart Validation (CCV) take national coding regulation standards into account, and incorporate documentation that supports a clinical scenario. But clinical appropriateness isn’t just judging medical necessity; it’s also incorporating medical policies and guidelines and standard industry policies.

Ken: The Cotiviti CCV solution focuses on prospective and retrospective claim reviews of inpatient DRGs (diagnosis related groups), short stays, and readmissions.

Clinical appropriateness from a DRG validation perspective entails verifying that the diagnoses billed were supported by clinical indicators in the records. For example, if a patient has pneumonia and pneumonia was billed, does the clinical evidence in that medical record support the fact that the patient truly had that pneumonia? Did the X-Ray support the patient had the pneumonia? Did the other clinical indicators support the patient truly had that pneumonia that was billed?

Clinical appropriateness from a short state perspective entails verifying that the place of service was appropriately assigned and billed based upon nationally recognized guidelines like InterQual and Milliman. The guidelines enable us to map the intensity of the treatment the patient received to that correct clinical setting.

Marla: From the coding validation side, focusing on payment accuracy from a health plan’s perspective—paying the claim accurately—is our end goal, as well as the health plan's end goal. And on the clinical validation side, coding modifiers play a significant role in determining if the modifiers have been appended correctly.

From a historical perspective, we went back and did some intense diving into the use of modifiers, and we identified that 38% of the time, the overriding modifiers that were appended to claims were not justified. This was substantiated back when the Office of Inspector General did a nationwide survey and found that modifier 59—one of the coding modifiers used to identify if services are appropriately identified on a claim to support the payment aspect of it—was used incorrectly approximately 40% of the time. So that subsequent audit shows that this trend has continued.

Ken: I've worked in businesses where there was only a coding and documentation review. But once we added the clinical appropriateness component, we had more than doubled the prevention rate of incorrect payments. Clinical appropriateness is an invaluable tool used to reduce waste in our healthcare system.

So we've established why clinical appropriateness is important. Exactly how do we ensure that claims are clinically appropriate for our clients?

Marla: We use our technology as well as human intervention. We look at situations where an automatic denial cannot be made, and we use the circumstances around the patient encounter and all the services to help us identify which claims should be routed for clinical nurse review.

Ken: From a CCV perspective, ensuring that claims are clinically appropriate begins with our selection methodology and our selection process, when we identify those claims that look like there could be an issue with the billing.

Once a claim is selected, our clinical coders perform an extensive review of the documentation in that record. That review includes not only evaluating what was documented, but also incorporates reviews of items such as patient labs, imaging, radiology, interventions that need to be documented to support the diagnoses on the claim.

Our comprehensive review program is performed with industry-leading accuracy and audit sustainability rates.

You both touched on how we use both technology as well as expert human intervention. What exactly is the role of the advanced technology versus actual humans reviewing the claims and the clinical charts?

Ken: Our technology and our staff work hand in hand. The clinical appropriateness program is supported through our state-of-the-art technology and applied by our staff. The technology applies artificial intelligence against the claims data to identify those with the highest probability of incorrect payment versus those that appear to be correct, and which we would not select for review. Our technology helps auditors locate key elements in the record more reliably than if they were just doing a manual review without that technology.

Our clinical coders then take over once the medical record is submitted by the provider for review. The clinical coders review the medical record and apply nationally recognized and proprietary clinical guidelines to document if those elements on the bill are supported in the medical records.

What exactly makes a clinician good at reviewing clinical information, both when it comes to reviewing claims and charts? And how do they stay up to date with all the rules and guidelines that we've talked about as well?

Marla: We really focus on hiring nurses with a broad range of clinical experience and actual nursing experience. We also have a very extensive robust training program across our organization that allows us to really focus on correct coding, the national guidelines, and the tools to be able to look at all aspects of a claim and situations surrounding the visit.

What are some notable examples that we've seen of clinically inappropriate claims from our team out there actually working in the trenches?

Marla: Let’s look at a scenario from the coding validation side, specifically looking at appropriate use of modifiers.

Let’s say a patient presents for a right knee injection. They go into their doctor's office, they have a visit and a joint injection. On the claim, it looks correct. However, if you insert the nurse review component, then they can look in the patient's history and previous visits or services to determine if the patient has had a previous visit.

So in this scenario, if the nurse would go into that claim history and see that the patient had been seen a month ago and also had a visit and an injection that was also billed, then the patient didn't present for a new problem. This new problem was likely identified on the previous visit and then the evaluation would be inappropriate for this second visit. In that case, the nurse would deny the visit and allow payment for the joint injection.

This is a common scenario, and the evaluation component is the key to determine appropriateness, given the scenario and the patient's histories.

Ken: Here’s an example from the CCV side.

A patient comes in, and they have a medical condition that was precipitated by some type of medical intervention. They went to the hospital, had some type of medical intervention, and a medical condition arises from it. However, that medical condition is a common occurrence in that circumstance. Generally, when you have this type of medical intervention, you will have that medical condition as a result of it, but this particular condition is asymptomatic. It's not treated, but it gets coded and added to the claim.

So, there were no services provided for that medical condition. No signs or symptoms from the patient—it was not treated, but it was documented and it was billed. That's an example of a clinically inappropriate condition that should not have been billed.

Finally, a provider might listen to this conversation and perhaps think that it sounds like clinical appropriateness review may just be another process to deny a claim so that the health plan does not have to pay it. What's your response to that point of view?

Marla: It's really just the opposite. It's all about integrity and ensuring correct payment. The number one thing from the coding validation side is that the clean claims are returned immediately. Only 1 – 3% of the claims are flagged for clinical review, so we're not looking to find claims to deny payment. We're looking for situations that clearly could be inappropriately paid based on the use of the incorrect modifiers.

Ken: Clinical appropriateness is a concept that's used to ensure that the financial transaction between the health plan and the provider is accurate as it pertains to the conditions treated and the services rendered. It's really just one component of a comprehensive payment integrity program, and it's intended to reduce waste and reduce excessive costs in the healthcare industry.


Successfully navigating the complexities of pre- and post-payment integrity amid shifting provider networks, member demographics, and lines of business requires a holistic approach across the entire health plan. View our new infographic to learn how health plans can maximize their savings with a multipronged, incremental approach to payment integrity—and see how the savings add up.

View the infographic


About the podcast About our guests


From the Trenches is a healthcare podcast from Cotiviti, a leader in healthcare data analytics, exploring the latest trends in healthcare quality and performance analytics, risk adjustment, payment integrity, and payer-provider collaboration. Check out all our episodes in your browser, or subscribe on your smartphone or tablet with Apple Podcasts, Spotify, Google Podcasts, and many other apps.

marla_wilsonMarla Wilson, CPC, COC oversees Cotiviti’s extensive team of clinical coders and nurse abstractors across all lines of business. Prior to joining the Cotiviti organization in 2004, she held senior management roles focusing on provider reimbursement and education. A clinical coding expert, Marla has also presented extensively at national conferences and seminars. She holds a bachelor’s degree from Utah State University.

ken_sabulskyKen Sabulsky, CCS, RHIA manages Cotiviti’s post-pay audit teams. Prior to joining Cotiviti in 2012, he served in health information management director, compliance officer, and privacy officer roles for several accute care hospitals. He holds an M.B.A. from Saint Joseph’s University and a bachelor’s degree from Temple University.



Jeff Robinson
As director of marketing communications, Jeff supports Cotiviti's customers by developing a wide range of communications including white papers, case studies, podcasts, articles, and videos offering best practices in healthcare analytics. Before joining the organization in 2016, he worked in journalism as the morning host and news director for KCPW, a public radio station in Salt Lake City.

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