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1 Finding Your Way to Prompt Pay Texas Department of Insurance.

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Presentation on theme: "1 Finding Your Way to Prompt Pay Texas Department of Insurance."— Presentation transcript:

1 1 Finding Your Way to Prompt Pay Texas Department of Insurance

2 TDI’s Strategy Education Education Helping you find the way Helping you find the way Enforcement Enforcement

3 Texas Department of Insurance Applicability Applicable to: Applicable to: HMOs HMOs Insured PPO Plans Insured PPO Plans Not applicable to: Not applicable to: Self-funded ERISA plans Self-funded ERISA plans Indemnity plans Indemnity plans Medicaid, Medicare, Med Supp Medicaid, Medicare, Med Supp Government and school plans – except HMO or fully insured PPO plans Government and school plans – except HMO or fully insured PPO plans Children’s Health Insurance Program (CHIP) Children’s Health Insurance Program (CHIP)

4 Texas Department of Insurance The Primary Laws HB 610 HB 610 Rules Rules SB 418 SB 418 Emergency rules Emergency rules Final rules Final rules

5 Texas Department of Insurance HB 610 – Key Provisions Contracted providers only Contracted providers only Carrier-required additional clean claim elements and attachments permitted with 60-day notice Carrier-required additional clean claim elements and attachments permitted with 60-day notice Clean claim paid in 45 days (electronically adjudicated pharmacy claims in 21 days) Clean claim paid in 45 days (electronically adjudicated pharmacy claims in 21 days) Pay 85% of contracted rate on audited claims Pay 85% of contracted rate on audited claims Late payment penalty: Late payment penalty: Contract penalty Contract penalty Billed charges as defined by rule Billed charges as defined by rule

6 Texas Department of Insurance SB Key Dates August 16, 2003 August 16, 2003 Emergency rules Emergency rules October 5, 2003 October 5, 2003 Final rules Final rules

7 Texas Department of Insurance SB 418 – Physicians and Providers Contracted providers under HMO plans, insured PPO plans Contracted providers under HMO plans, insured PPO plans Contract issue/renewal dates Contract issue/renewal dates Non-contracted providers who provided emergency and referral services Non-contracted providers who provided emergency and referral services Other non-contracted providers under certain circumstances Other non-contracted providers under certain circumstances

8 Texas Department of Insurance SB 418 – Delegated Entities HMOs and insured PPOs are responsible for SB 418 compliance, even when delegated entities and PPO networks are used HMOs and insured PPOs are responsible for SB 418 compliance, even when delegated entities and PPO networks are used Key contract date – carrier and delegated entity Key contract date – carrier and delegated entity

9 Texas Department of Insurance SB 418/HB 610 Prompt Payment Deadlines and Penalties Decision Tree

10 Texas Department of Insurance SB 418 – Key Provisions Final rules Final rules 95-day filing deadline 95-day filing deadline Limit on clean claim elements Limit on clean claim elements Payment deadlines Payment deadlines Non-electronic – 45 days Non-electronic – 45 days Electronic – 30 days Electronic – 30 days Affirmatively adjudicated pharmacy – 21 days Affirmatively adjudicated pharmacy – 21 days Requests for additional information deadlines Requests for additional information deadlines From treating provider From treating provider From third parties From third parties

11 Texas Department of Insurance SB 418 – Key Provisions Catastrophic Event: Business interruption of claims filing or processing activities Business interruption of claims filing or processing activities More than 2 consecutive business days More than 2 consecutive business days Notice TDI within 5 days of the catastrophe Notice TDI within 5 days of the catastrophe Sworn affidavit due within 10 days of return to normal business operations Sworn affidavit due within 10 days of return to normal business operations

12 Texas Department of Insurance SB 418 – Key Provisions Final rules Final rules Duplicate claims Duplicate claims Audits Audits Coordination of benefits Coordination of benefits Overpayments Overpayments Underpayments Underpayments

13 Texas Department of Insurance Billed Charges HB 610 HB 610 SB 418 Emergency SB 418 Emergency SB 418 Final SB 418 Final

14 Texas Department of Insurance Billed Charges Definition: The charges for medical care or health care services included on a claim submitted by a physician or provider. Billed charges must comply with all other applicable requirements of law, including: Definition: The charges for medical care or health care services included on a claim submitted by a physician or provider. Billed charges must comply with all other applicable requirements of law, including: Texas Health and Safety Code § Texas Health and Safety Code § Texas Occupations Code § Texas Occupations Code § Texas Insurance Code Art F Texas Insurance Code Art F

15 Texas Department of Insurance Penalty Provisions Graduated penalty Graduated penalty Later claim paid, greater amount owed Later claim paid, greater amount owed days late days late (50% - $100,000 maximum) (50% - $100,000 maximum) days late days late (100% - $200,000 maximum) (100% - $200,000 maximum) 91 or more days late 91 or more days late (100% - $200,000 maximum + (100% - $200,000 maximum + 18% interest) 18% interest) No contracted penalty rates No contracted penalty rates

16 Texas Department of Insurance Penalty Provisions Always recover full contracted rate in addition to any applicable penalty Always recover full contracted rate in addition to any applicable penalty

17 Texas Department of Insurance Late Payment Penalty Calculation Formula: Billed charges Billed charges Minus the contracted rate Minus the contracted rate Multiplied by the percentage for the applicable statutory claim payment period Multiplied by the percentage for the applicable statutory claim payment period Equals the amount of the penalty payment Equals the amount of the penalty payment

18 Texas Department of Insurance Late Payment Penalty Calculation Example Paid on or before the 45 th day after the end of the applicable statutory claim payment period: Billed charges = $15,000 Billed charges = $15,000 Minus contracted rate of $10,000 Minus contracted rate of $10,000 Equals $5,000 Equals $5,000 Multiplied by 50% Multiplied by 50% $2,500 = penalty payment $2,500 = penalty payment

19 Texas Department of Insurance Underpayment Penalty Calculation Formula: Amount underpaid on the contracted rate Amount underpaid on the contracted rate Divided by the amount of the contract rate Divided by the amount of the contract rate Multiplied by the billed charges Multiplied by the billed charges Equals the “underpaid amount” Equals the “underpaid amount” Multiplied by the percentage for the applicable statutory claim payment period Multiplied by the percentage for the applicable statutory claim payment period Equals the penalty payment Equals the penalty payment

20 Texas Department of Insurance Underpayment Penalty Calculation Example Paid on or before the 45 th day after the end of the applicable statutory claim period: Billed charges = $1,500 Billed charges = $1,500 Amount of contracted rate = $1,000 Amount of contracted rate = $1,000 Amount paid timely = $800 Amount paid timely = $800 Amount underpaid on contracted rate = $200 Amount underpaid on contracted rate = $200 $200 / $1,000 (= 20%) X $1,500 = $300 $200 / $1,000 (= 20%) X $1,500 = $300 Multiply by 50% Multiply by 50% $150 = penalty payment $150 = penalty payment

21 Texas Department of Insurance Administrative Penalty TDI collects data to monitor compliance TDI collects data to monitor compliance 98% compliance 98% compliance Institutional claims Institutional claims Non-institutional Non-institutional Quarterly computation Quarterly computation Less than 98% compliance may result in fines of $1,000 per claim per day Less than 98% compliance may result in fines of $1,000 per claim per day Individual violations – other remedies may apply Individual violations – other remedies may apply

22 Texas Department of Insurance Reporting Requirements TDI will collect industry information via the Web TDI will collect industry information via the Web Claims payment activities Claims payment activities Verifications and declinations Verifications and declinations Catastrophic events Catastrophic events Delegated entities information Delegated entities information HB 610 information HB 610 information First report due February 15, 2004 (September – December 2003 data) First report due February 15, 2004 (September – December 2003 data)

23 Texas Department of Insurance Coordination of Benefits If enrollee has other coverage, these fields are required: If enrollee has other coverage, these fields are required: 11d (CMS 1500) – Disclosure of other coverage 11d (CMS 1500) – Disclosure of other coverage 9a - d (CMS 1500) – Name and address of other coverage 9a - d (CMS 1500) – Name and address of other coverage 29 (CMS 1500) – Payments by other carrier 29 (CMS 1500) – Payments by other carrier 54 (UB-92) – Payments by other carrier 54 (UB-92) – Payments by other carrier

24 Texas Department of Insurance Coordination of Benefits Physician or provider may submit a written statement that demonstrates a good-faith but unsuccessful effort to obtain information about other insurance Physician or provider may submit a written statement that demonstrates a good-faith but unsuccessful effort to obtain information about other insurance Health plans may require by contract that physicians maintain information about other coverage in their office records Health plans may require by contract that physicians maintain information about other coverage in their office records

25 Texas Department of Insurance Coordination of Benefits 95-day filing deadline for claim to secondary payer begins when the physician or provider receives payment from the primary carrier 95-day filing deadline for claim to secondary payer begins when the physician or provider receives payment from the primary carrier If primary carrier’s payment date is not available, proof of timely filing with the primary payer is adequate If primary carrier’s payment date is not available, proof of timely filing with the primary payer is adequate

26 Texas Department of Insurance Preauthorization May not be required by the carrier for certain procedures May not be required by the carrier for certain procedures Once service is preauthorized, carrier may not deny nor reduce payment based on medical necessity or appropriateness of care Once service is preauthorized, carrier may not deny nor reduce payment based on medical necessity or appropriateness of care Response deadlines Response deadlines Life-threatening condition or post-stabilization - 1 hour Life-threatening condition or post-stabilization - 1 hour Concurrent hospitalization - 24 hours Concurrent hospitalization - 24 hours All other requests - 3 calendar days All other requests - 3 calendar days Preauthorization/Verification combination Preauthorization/Verification combination

27 Texas Department of Insurance Eligibility Inquiries and Verification Requests Eligibility Eligibility Not a guarantee of payment Not a guarantee of payment Verification Verification Guarantee of payment: “cannot reduce or deny payment….” Guarantee of payment: “cannot reduce or deny payment….” Exceptions: misrepresentation and failure to perform Exceptions: misrepresentation and failure to perform

28 Texas Department of Insurance SB 418 – Key Provisions Final rules … Final rules … Verification response times, without delay, not to exceed: Verification response times, without delay, not to exceed: Life-threatening condition or post- stabilization - 1 hour Life-threatening condition or post- stabilization - 1 hour Concurrent hospitalization - 24 hours Concurrent hospitalization - 24 hours All other requests - 5 calendar days All other requests - 5 calendar days Required information for verification requests and responses Required information for verification requests and responses Toll-free numbers Toll-free numbers

29 Texas Department of Insurance Verification Bulletin All carriers subject to SB 418 must make a good faith effort to entertain requests for verification rather than adopting a corporate policy of no verifications. If the carrier is unable to verify, it may decline so long as it states the specific reason for the declination. Such reason, according to the statute, must be specific to the request for the proposed service rather than a blanket refusal. Carriers should review their verification procedures to ensure that they are compliant with this requirement. All carriers subject to SB 418 must make a good faith effort to entertain requests for verification rather than adopting a corporate policy of no verifications. If the carrier is unable to verify, it may decline so long as it states the specific reason for the declination. Such reason, according to the statute, must be specific to the request for the proposed service rather than a blanket refusal. Carriers should review their verification procedures to ensure that they are compliant with this requirement.

30 Texas Department of Insurance Fee Schedules Provide within 30 days of request Provide within 30 days of request Software identification Software identification 90 days notice for change 90 days notice for change No retroactive effect No retroactive effect

31 Texas Department of Insurance Fraud Material misrepresentation Material misrepresentation Failure to perform services Failure to perform services Unreasonable charges Unreasonable charges Report fraud Report fraud Call the TDI Fraud Hotline Call the TDI Fraud Hotline Use the form on TDI’s Website Use the form on TDI’s Website

32 Texas Department of Insurance TACCP Technical Advisory Committee on Claims Processing Technical Advisory Committee on Claims Processing Successor to Clean Claims Working Group (meeting since 2001) Successor to Clean Claims Working Group (meeting since 2001) Information on TDI Web site Information on TDI Web site Agendas Agendas Meeting minutes Meeting minutes Report to Legislature Report to Legislature

33 Texas Department of Insurance Current Topics Additional rules Additional rules ID cards ID cards Waiver Waiver Dental clean claim elements Dental clean claim elements 2004 TACCP meetings 2004 TACCP meetings Consideration of coding and bundling standards Consideration of coding and bundling standards Clearinghouses Clearinghouses Electronic filing waiver procedures Electronic filing waiver procedures

34 Texas Department of Insurance Reference Materials TDI Web site TDI Web site Physician/Provider Resource page Physician/Provider Resource page Rule comparison charts Rule comparison charts Rules page Rules page FAQs page FAQs page Physician/Provider Complaint form Physician/Provider Complaint form

35 Texas Department of Insurance TDI Web Site

36 Texas Department of Insurance Reference Materials Physician/Provider Resource page Physician/Provider Resource page

37 Texas Department of Insurance Reference Materials Rule Comparison Charts Rule Comparison Charts

38 Texas Department of Insurance Reference Materials Rules page Rules page

39 Texas Department of Insurance FAQs SB 418 FAQs SB 418 FAQs

40 Texas Department of Insurance Reference Materials Physician/Provider Complaint form Physician/Provider Complaint form

41 Texas Department of Insurance Do You Know the Way to Prompt Pay?


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