All Medicare contractors are required to ensure that reimbursement is made only for those services that are reasonable and necessary. To ensure that payment is made only for reasonable and necessary services, each Medicare contractor is required to perform extensive analysis of data to identify aberrant billing. Contractors must verify that billing problems exist through the use of limited scope “ probe ” reviews before taking any corrective action. Further, corrective actions must include educating providers, and must be commensurate with the scope of the verified error. For instance, an error affecting a limited number of claims will result in an educational intervention; whereas, an error affecting a large number of claims will result in an educational intervention combined with added medical review. 

Mission and Objectives of the Medical Review Process 

The mission of the medical review process is to reduce the claim payment error rate. The educational processes provided by Medicare ensure that a physician knows what to expect when a claim is submitted to the program. The specific objectives of the medical review process include: 

* Identification and prevention of inappropriate Medicare payments 
* Utilization of national and local data, to assure only those areas that present the most risk to the program, are subjected to medical review 
* Increasing effectiveness of newly developed Local Medical Review Policies (LMRPs) Education of physicians on appropriate billing practices 
* Ensuring the appropriate reimbursement of Medicare-covered services

Benefits to Medicare Physicians

Medical review initiatives are designed to apply national payment criteria, to define Medicare cover- age of medical care through the development of medical policy, and to ensure that LMRPs and review guidelines are consistent with accepted standards of medical practice. The medical review process provides the following benefits: 

Decreased denials. Knowledge of appropriate claims guidelines may result in a reduction in filing errors and an increase in more timely payments. 
Improvement in the way Medicare reviews cases. Development of LMRPs provide guidelines for the decision making process.
Reduced claim reviews. Because physicians have a better understanding of when and what Medicare needs to support a service as it relates to claim documentation, the claim filing process is smoother and faster
Predictability in claim decisions. Because local contractor policies are made available to all eligible physicians through contractor publications and Web sites, there is less “ guess work ” on the behalf of the physician when furnishing information to support medical necessity. 
Emphasis on education. Medicare offers educational opportunities through comprehensive articles and contractor-sponsored educational training events. 
Increased program integrity. The Medicare Integrity Program, established in 1996, ensures that Medicare pays claims correctly..

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