For Medicare to ensure that payment is made only for reasonable and necessary services, each Medicare contractor is required to perform extensive data analysis on the frequency a service is allowed.
A provider profile is then created which shows all procedures as well as the frequency of those procedures billed within a certain period of time. These profiles are then compared to local and national averages. The focus is on how providers and their services trend.
Progressive Corrective Action or PCA, is a concept designed by CMS to ensure that Medical Review activities are targeted at problem areas that are identified by the data analysis. Therefore, data analysis is the first step in PCA for determining unusual or unexpected billing patterns that might suggest improper billing or payment. The second step – is validating the hypothesis of the data analysis. To accomplish this, probe reviews are conducted. All providers subject to a probe review are notified in writing; and they are also notified in writing of the results of the review. In the event a problem is discovered during the PCA process, the Carrier is responsible to collect the money on claims paid in error, in addition, the following are some of the additional types of corrective actions that can be taken: Development of provider education and feedback; lopment of local policy; Performance of prepayment review; or Performance of postpayment review; When individual reviews are conducted, focused provider education is carried out. The overall goal of providing feedback and focused provider education is to ensure development of proper billing practices. This will ensure that claims will be submitted and paid correctly because the provider understands what to expect when a claim is submitted to Medicare.