Evaluation of Prepayment Edits

3.7.3.1 - Evaluation of Prepayment Edits (Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) This section applies to MACs. The MACs shall develop prepayment edits based on the findings of data analysis, followed by identification and prioritization of identified problems. The MACs shall evaluate all service-specific and provider-specific prepayment edits as follows: • Automated edits shall be evaluated annually, and • Non-medical record review or medical record review edits shall be evaluated quarterly. The edit evaluations are to determine their effectiveness on the provider or service area while assessing the effect of the edit tasks on workload. The MACs shall consider an edit to be effective when it has a reasonable rate of denial relative to suspensions and a reasonable dollar return on cost of operation or potential to avoid significant risk to beneficiaries. The MACs shall revise or replace edits that are ineffective. Edits may be ineffective when payments or claims denied are very small in proportion to the volume of claims suspended for review. It is appropriate to leave edits in place if sufficient data are not available to evaluate effectiveness, for instance, a measurable impact is expected, or a quarter is too brief a time period to observe a change. The MACs shall analyze prepayment edits in conjunction with data analysis to confirm or re-establish priorities. The MACs should replace existing effective edits to address problems that are potentially more costly, if appropriate.