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Pre-Checkwrite Review of Claims

July 1, 2004

Effective for dates of payment on or after July 1, 2004, the Department of Health Care Services (DHCS) will implement a new process to monitor Medi-Cal claims. All Medi-Cal claims will be subject to an additional week of review prior to release of payments. As a result of the one-week extension, claim payments for checkwrite date July 8, 2004 will be scheduled for July 15, 2004. The Checkwrite Schedule in the Part 1 provider manual has been updated to reflect the new payment dates.

The Governor’s Anti-Fraud Initiative (AB 1107, Stats. 1999, c. 146) and other recent statutes (AB 1098, Stats. 2000, c. 322; SB 1699, Stats. 2002, c. 768; and SB 857, Stats. 2003, c. 601) have strengthened the authority of DHCS to combat fraud and abuse in the Medi-Cal program. DHCS has intensified its efforts to reduce fraud by verifying claims prior to approval for payment.

DHCS may conduct claim reviews using one of two review methodologies to ensure program integrity and the validity of claims for reimbursement. The first review methodology will be a random sampling of claims submitted by Medi-Cal providers. The second review methodology will be based on a pre-checkwrite review criterion, such as irregular billing patterns, designed to identify potential fraudulent billing.

Random Sampling
It is the intent of DHCS that all claims submitted by Medi-Cal providers be subject to random review regardless of provider type, specialty or service rendered. If claims are selected for random review, the selection will not imply fraud. This effort is geared entirely toward promoting program integrity across all Medi-Cal claim types and will ensure that all claims have appropriate Medi-Cal policy applied.

DHCS will verify that claims randomly selected have sufficient documentation to approve the claim for payment. Medi-Cal providers will be notified if a claim requires additional documentation prior to approval for payment. Claims may be held longer than one week pending further examination. Failure to comply with the request for documentation may result in suspension from the Medi-Cal program, pursuant to Welfare and Institutions Code (W & I Code), Section 14124.2.

If additional evidence of claim validity is required, the evidence shall be requested in accordance with W & I Code, Section 14104.3(a)(3). EDS has been instructed to randomly select claims submitted for reimbursement before approval is granted to pay the claim. The randomly selected claims will be identified in the Provider Telecommunications Network (PTN) as “in process” until the claim is approved for payment.

Pre-Checkwrite Review
In addition to the claims randomly selected for verification, claims for services rendered by Medi-Cal providers may be subject to a more comprehensive review on a weekly basis. This review will be based on a set of criteria, such as irregular billing patterns, designed to identify potential fraudulent billing. Claims selected for more comprehensive review may require the provider to submit adequate documentation to substantiate billed services. Failure to comply with the request for documentation may result in suspension from the Medi-Cal program, pursuant to W & I Code, Section 14124.2.

Every week starting July 1, 2004, all claims will be held in an “in process” status for a period of seven days pending DHCS verification. Claims having an “in process” status in excess of seven days are those identified by DHCS either through random sample or pre-checkwrite review, and will be subject to validation by DHCS. Medi-Cal providers will either receive notice from DHCS that additional information is required to adjudicate the claim or will receive payment after validation of the claim is complete.