Prompt Payment to Providers28 TAC §§21.2801-21.2816

Patricia Brewer, HMO Projects Director

Cady Crismon, MSN, RN, Director, HMO Quality Assurance

Texas Department of Insurance

Who Does Not Have to Comply?• Self-funded ERISA plans• Workers’ compensation coverage• Government, school, and church health plans• Out-of-state insureds• Medicaid/Medicare• State employee plans (except those involving HMO complaints)• Federal employee plans• Teacher Retirement System-Care• University of Texas employees• TRICARE Standard (CHAMPUS)• Texas Association of School Boards coverage

When Does a Company Have to Pay a Claim for a Health

Service?

• Texas law provides different requirements depending upon:– Type of coverage - HMO vs. PPO vs. Non-

network Indemnity– Who filed the claim - Insured, Enrollee,

Physician, or Provider– Status of physician or provider - Contracted vs.

Non-contracted

Clean Claim Rules• Meant to implement and clarify HB 610 passed during

1999 legislative session• Apply to:

– HMOs– PPOs– Contracted Physicians and Providers

• Effective for:– Claims filed for outpatient care received on or after 8/1/00– Claims filed for inpatient stays that began on or after 8/1/00

Clean Claim Rules

• Perform three main functions:– Define elements of a clean claim– Clarify when the prompt payment period clock

starts running– Clarify the required actions of a carrier upon

receipt of a clean claim

What is a Clean Claim?• Data elements - see handouts

– HCFA 1500

– UB-92

• Attachments

• Additional clean claim elements

• Format

– Legible, accurate, complete

– Too much information does not render an otherwise clean claim deficient!

Coordination of Benefits

• The amount(s) paid by primary carrier(s) is a clean claim element for secondary carriers

• The statutory claim processing period for secondary carriers does not begin until primary payor information is provided

Proof of Claims Submission

• Return receipt

• Electronic confirmation

• Fax confirmation

*The 45-day time period to pay a claim begins on the date the claim is received by the carrier

What are the Carrier’s Responsibilities?

• Notice of revised or additional data elements and/or attachments. Disclosure may be made by:– Written notice at least 60 days prior to requiring

additional or revised information– Revision of physician or provider manual at least

60 days prior to requiring additional or revised information

– Contract provisions

• Act on clean claims within 45-day statutory claims processing period– Pay the claim, in total, in accordance with the contract

– Deny the claim in total and notify the physician or provider in writing of the reason for denial

– Pay portion and deny portion, and notify physician or provider in writing of reason for denial

– Pay portion and audit portion, notify physician or provider in writing that claim is being audited, and pay 85% of the contracted rate on the audited portion

– Audit entire claim, notify physician or provider in writing that claim is being audited, and pay 85% of the contracted rate

• Notice of deficient claims within 45 days

• Notice of changes in claims addresses, processors, etc.

Audits

• Carrier acknowledges coverage of an enrollee, but claim processing takes longer than the 45-day statutory claim processing period

• The rule does not specify a time limit for audit completion

• After the audit is completed, the carrier must give written notice of the results and pay the additional 15% balance of contracted rate 30 days after the audit is completed

• A physician or provider must refund the 85% audit payment:– 30 days after the later of (a) receiving notice of

audit results, or (b) exhaustion of enrollee’s appeal rights, if appealed within 30-day refund period

– Chargebacks are allowed with written notice and opportunity to arrange an alternative reimbursement method

Penalties if Carriers Fail to Comply with the Clean Claim

Rules• Full amount of billed charges up to U&C

charges, or

• Contracted penalty rate provided in the physician or provider’s contract

• Administrative penalties, up to $1,000/day per claim, may be assessed and collected by the State of Texas

Date of Claim Payment

• Claim is considered to have been paid on the date of:– U.S. Postal Service postmark– Electronic transmission– Delivery of the claim payment to a commercial

carrier, such as UPS or Federal Express, or– Receipt by the physician or provider, if a claim

payment is made other than provided above

Filing a Clean Claim

• File the claim within the contractual timeframes

• Send claims to the correct billing address

• Include all required data elements and attachments

• Maintain proof of timely filing

TDI Complaint Process

• Consumer Protection - PPO/Indemnity

• HMO Quality Assurance Section - HMO

• Complaints are reviewed and assigned

• Carriers have 10 days to respond to TDI inquiries, per Texas Insurance Code Article 38.001

All HMO Complaints ClosedFiscal Year 2000

7%17%

8%

74%

1%

15%3% 10%

Quality of Care Access to CareUtilization Review Complaint ProcedureProvider Contract Employer ContractEnrollee Contract MarketingMiscellaneous

<4%

PPO Claims Complaints ClosedFiscal Year 2000

20%

14%

3%15% 44%

4%

Delays (claims handling) Unsatisfactory settlement/offerDenial of claim Pre-existing conditionsDelays (policyholder service) Other

TDI’s Authority• Some issues fall under other agencies’ jurisdiction

– Self-funded ERISA plans

– Workers’ compensation coverage

– Government, school, and church health plans

– Out-of-state insureds

– Medicaid/Medicare

– State employee plans (except those involving HMO complaints)

– Federal employee plans

– Teacher Retirement System-Care

– University of Texas employees

– TRICARE Standard (CHAMPUS)

– Texas Association of School Boards coverage

Physician and Provider Responsibilities

• Read and understand your contract• Know contractual provisions for attachments• Assure front office/billing service is aware of correct

billing location for each carrier• Submit clean claims• Refund audit payments if claim is denied after audit• Update accounts receivable regularly• Allow 45 days for processing and payment of claim

before resubmitting

What TDI Needs to “Work” a Claims Complaint

• Written complaint• Copy of patient’s health insurance ID card• HCFA 1500 or UB-92 claim form submitted to the

company for each patient and date of service• Claims separated by the HMO or insurance carrier

name

• Valid evidence of claim submission for each claim– Electronic transmission confirmation– Certified mail return receipt– Fax confirmation – Courier delivery confirmation, or– Claims mail log evidenced by faxed confirmation of date

submitted via US first-class mail (proposed)• Claim is presumed received on the third day after the date the

claim is submitted

• Evidence of the collection activities undertaken for each claim – Documentation of phone conversations made to the

health carrier and/or– Copies of correspondence mailed to the health carrier– The replies received from the health carrier

Scenario #1

• DOS 5/29/01 with contracted provider

• Claim submitted to carrier via certified mail on 6/20/01 with return receipt dated 6/26/01

• HCFA 1500 missing elements 14 & 15

• Provider filed complaint with Department on 7/12/01

• Clean claim violation?

Scenario #2• DOS 11/21/00 with contracted provider• Submitted HCFA 1500 within contractual

timeframes• Provider resubmitted HCFA 1500 every 15

days after original submission until paid• Claim paid at contracted rate 45 days after

original submission receipt• Clean claim violation?

Scenario #3

• ER DOS 10/4/00• Facility is a contracted provider• Billed carrier at end of month, submitted claim

via certified mail, received by carrier on 11/20/00• All required elements on HCFA 1500 and all

attachments provided• ER followed up on unpaid claim on 2/1/01• Clean claim violation?

Scenario #4

• Contracted provider filed clean claim with multiple CPT codes for DOS 5/1/01

• Carrier notified provider of audit, in writing, within 45 days, paying 85% of contracted rate for each CPT code

• Completed audit within 60 days and paid provider remaining 15% of contracted rate

• Clean claim violation?

Scenario #5

• Office visit with contracted physician, DOS 5/5/01

• Physician billed for multiple CPT codes for this office visit

• Carrier deducted copay on each CPT code, but paid within 45 days

• Clean claim violation?

Scenario #6• DOS 1/15/01 with contracted provider• Provider submitted clean claim via electronic

submission• Carrier processed and paid claims within 30 days,

but paid at incorrect contract rate• Provider appealed payment twice, then filed

complaint with TDI• Carrier responded that they had incorrectly paid

claim and then paid the difference between the incorrect rate and the contracted rate

• Carrier refused to pay billed charges

• Clean claim violation?

Scenario #7• Provider filed complaint with TDI requesting assistance in

collecting full-billed charges

• Information provided included:– Contracted provider submitted claim to carrier via

electronic submission for DOS 8/30/00– Carrier states they did not receive claim– Claim resubmitted on paper, then denied for timely filing– Proof of the electronic filing was submitted to carrier and

claim paid at contracted rate

• Clean claim violation?

Resources• Website:

– www.tdi.state.tx.us

• Provider Ombudsman– Audrey Selden, Senior Associate

Commissioner– (512) 475-1760

• Toll Free Information– 1-800-252-3439