1 Prompt Payment to Providers 28 TAC §§ Patricia Brewer Director of Project Oversight - Life Health & Licensing Texas Department of Insurance

2 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, even if provided through HMOs 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

3 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

4 Clean Claim Rules Meant to implement and clarify HB 610 passed during 1999 legislative session Apply to: –HMOs –PPOs –Contracted Physicians and Providers

5 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

6 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! What is a Clean Claim?

7 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

8 Proof of Claims Submission Claims mail log * Presumed to be received on the third business day after the date the claim is mailed and the faxed or electronically generated log is transmitted Return receipt Electronic confirmation Fax confirmation * Presumed to be received on the the date of signed receipt or electronic/fax confirmation

9 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

10 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 (or deny) 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

11 Notice of deficient claims within 45 days Notice of changes in claims addresses, processors, etc.

12 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 If audit continues more than 180 days after claim is filed, carrier must pay the remaining 15% while investigation continues

13 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

14 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