Why Medical Records Are A Critical Part Of A Claim

finHealth has been operating in the healthcare cost-control industry for a decade now and we are growing increasingly concerned about the proper verification of Medical Records by our national insurance carriers as it relates to both proper patient care and patient billing. Medical Records are the underlying physical documents that support each patient’s healthcare encounter and provider reimbursement. Providers are licensed professionals, facilities, and organizations responsible for delivering medical services to patients, such as diagnosing, treating, and managing their personal health conditions.  

In our society, any product or service obtained by an individual, company, or organization is usually accompanied by physical documents such as purchase orders, receiving reports, and invoices. Invoices confirm the goods or services that were provided. These documents are reviewed before payment to ensure that all goods and services have been fully received, the correct price was charged as per the contract, and the invoice terms are accurate. Similarly, Medical Records serve as the supporting documentation that treatment was indeed provided to a patient. Additionally, they confirm it was billed at the correct quantity/price and accurately paid based on the agreed value delivered to the patient.

Supporting documentation for a healthcare expenditure typically includes the following:      

• Personal information – name, birth date, contact details and insurance information of the patient 

• Itemized Bill – detailed list of all line items that comprise the total billed charges 

• History & Physical (H&P) – details the circumstances leading to patient treatment, including the medical assessment and proposed remedies 

• Perioperative / Operative Report – documents all actions taken in the Operating Room, including duration of the procedure, a complete narrative of the surgery, and any medical supplies or devices used with quantities, manufacturers, serial numbers, etc. 

• Lab Test Results/Medications – results of blood tests, imaging, pathology, prescribed medications 

• Surgeons OP report – includes specific feedback from the surgeon on the progress of surgery and any complications / changes versus the original plan and assessment 

• Hospital Discharge Summary – details the patient status upon discharge, as well as any recommendations for future treatment or lifestyle changes to accelerate recovery 

Once a physician, payer or third-party administrator reviews the supporting Medical Records, they can discern whether certain errors have occurred such as keying in the quantities or unit prices wrong, medical coding errors, or treatment that was not actually performed. They will confirm whether devices were implanted in a patient and how many or isolate if a line item was inadvertently billed twice. They would identify a poorly negotiated or non-competitive rate, perhaps due to a weak contracting structure. The reviewer would also be able to verify that no errors were made in transcribing the information from the medical records into the provider billing.   

While we at finHealth do not directly question the medical necessity or clinical determination of medical charges, we do have an obligation to bring such concerns above to the attention of our clients, especially in situations where the professional charges do not correlate with the hospital billing.  Without retrieving these records, neither the payer nor the client can fully verify the authenticity of costs incurred by the private health plan.   

Surprisingly, only a tiny percentage of claims are ever verified back to the original medical records across the national carriers. The rate is usually less than 1 in 1,000. That is one tenth of 1 percent. Instead of verifying that hospital and doctor bills match the Medical Records, the payer relies on a system of “trust” in the billing provider. And when the payer relies on the biller to verify their own billing, we see risk exposure for our clients, the self-funded employer. If you are a self-funded employer and you find you are questioning the accuracy of provider billing for your members, contact us sales@finhealth.com.