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Prompt Payment to Providers

Patricia Brewer, HMO Projects Director
Cady Crismon, MSN, RN, Director, HMO Quality Assurance

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!

Proof of Claims Submission

  • Return receipt
  • Electronic confirmation
  • Fax confirmation

What are the CarrierĀ“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 for 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

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

TDI Complaint Process

  • Consumer Protection - PPO/Indemnity
  • HMO Quality Assurance Section - HMO
  • Complaints are reviewed and assigned
  • Carriers have 15 days to respond to TDI inquiries, per Texas Insurance Code Article 38.001

All HMO Complaints Closed
Fiscal Year 2000

All HMO Complaints Closed FY 2000

PPO Complaints Closed
Fiscal Year 2000

PPO Complaints Closed FY 2000

Scenario #1

  • DOS 2/2/00 with contracted provider
  • Claim billed 10 days after DOS via certified mail, received by carrier on 2/16/00
  • Claim processed and paid at contracted rate on 3/20/00
  • Clean claim violation?

Scenario #2

  • DOS 11/16/00 through 11/22/00 in contracted facility
  • Inpatient authorization received for all days
  • Billed carrier via electronic submission on 11/29/00
  • Claim denied on 3/1/01 due to medical records not submitted
  • Failed to make denial within 45 days
  • 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
  • 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?

For more information contact:



Last updated: 10/16/2013



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