Blog, Revenue Cycle

Why IME Shadow Bills Are Missed?

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The following is an excerpt from, “The Value of an Independent IME Review”.


Optimizing IME and DGME reimbursement is contingent upon three key factors:

  1. Identifying and documenting Medicare Advantage patients at the time of registration
  2. Correctly utilizing internal plan codes and identifiers to track patients
  3. Subsequently submitting and collecting on the shadow bills for this population

The complex insurance maze in which providers must operate can be confusing. Vast amounts of information is obtained from patients and recorded in hospital systems at the time of registration. The process for ensuring that all affected accounts are properly identified for shadow billing is challenging and constantly evolving.

Underpayments can occur for many reasons:

  • The inability to collect the Medicare HICN

Medicare Advantage patients have two insurance policy numbers – one provided by the plan itself and the other by Medicare (the HICN). Capturing and maintaining this information is critical for the success of IME claim submissions. Medicare beneficiaries who have opted out of traditional Medicare sometimes do not have their Medicare identification number available at the time of service.

  • The inability to produce a shadow bill

Some patients register under an incorrect plan code which does not prompt the creation of a shadow bill. In some cases, a plan code is not set up to submit a shadow claim and thus doesn’t trigger a timely claim.

  • Manual shadow billing processes

While some of the newer billing systems generate a shadow bill automatically, many systems require manual intervention to generate the shadow bill. Staff turnover and outdated policies and procedures can result in missed shadow bills.

  • Submitting claims without the required condition codes

Condition codes 04 and 69 (for teaching hospitals) are necessary for a claim to be processed as IME-only through Medicare. Without the condition codes, a claim will be rejected.

  • Not having a process in place to track Return to Provider

(RTP) claims and rejections Medicare Advantage shadow bills go through the same billing edits and processes as a traditional Medicare claim. Claims with errors may be flagged and placed in RTP status for correction or be denied. Claims not resolved in RTP within 180 days are removed by the MAC and are at high risk of not being paid.

  • Failure to adhere to the twelve month timely filing deadline

There are no exceptions to the timely filing window for IME claim submissions. Claims must be submitted within the required twelve month period from the discharge date in order to be considered for processing.

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