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SUBCHAPTER T. SUBMISSION OF CLEAN CLAIMS 28 TAC §§>21.2803 - 21.2807, 21.2809, 21.2811, 21.2815 - 21.2820

The Texas Department of Insurance (Department) proposes amendments to §§21.2803 - 21.2807, 21.2809, 21.2811, 21.2815, and new §§21.2816 - 21.2820 concerning the submission of clean claims to health maintenance organizations (HMOs) and insurers who issue preferred provider benefit plans (preferred provider carriers). The purpose and objectives of the proposed revised and new sections are to further clarify and delineate requirements relating to submission and payment of clean claims.

These sections are necessary to provide greater clarity and more specificity in prompt payment procedures and will more fully implement legislation enacted by the 76 th Legislature in House Bill 610, as contained in Texas Insurance Code Articles 3.70-3C §3A and 20A.18B.

House Bill 610, which became effective on September 1, 1999, basically gives HMOs and preferred provider carriers 45 days to pay or deny, in whole or in part, "clean claims" submitted by contracted physicians and providers. In addition, an HMO or preferred provider carrier that acknowledges coverage but intends to audit a claim is required to pay 85% of the contracted rate within the statutory claims payment period. House Bill 610 gives the Department the authority to determine, by rule, what constitutes a "clean claim." It further gives the Department authority to adopt rules as necessary to implement the statutory requirements.

On December 17, 1999, the Department proposed rules to provide definitions and procedures for determining and paying clean claims, which were adopted by order dated May 23, 2000. A revision to the sections concerning data elements and audit procedures was adopted by order dated February 14, 2001. In the original rule´s adoption order, the Department, in responding to comments on various sections of the rule, stated its intent to monitor complaints and acknowledged that further agency action could be necessary to further refine clean claims submission and payment procedures as contemplated in House Bill 610.

The Department has noted a significant increase in the number of complaints received from physicians and providers involving delays in claims payment. These complaints, coupled with the Department's continuing communication with the physician and provider community, as well as with HMOs and preferred provider carriers, indicate a need to further refine the rule to ensure that the original intent of House Bill 610 - the timely and efficient payment of clean claims - is being implemented.

The Department recognizes that future, additional rulemaking may be necessary to address ongoing concerns that have been or will be raised regarding implementation of House Bill 610 and other issues concerning physicians and providers and HMOs and preferred provider carriers. However, the current proposal reflects the Department's efforts to resolve recurring issues regarding prompt payment of clean claims.

The proposed amendment to §21.2803, which sets out the elements of a clean claim, clarifies that while attachments and additional elements can be required as part of a clean claim, such requests by HMOs and preferred provider carriers for required attachments and additional elements must be for documents which are contained within the physician's or provider's medical file. The Department has received numerous complaints from physicians and providers indicating that HMOs and preferred provider carriers are requiring documents that may be inaccessible to the physician or provider, such as police reports, documents from the registrar´s office at colleges and universities, and tax statements from enrollees and insureds. For this reason, the Department believes that this section should be clarified. In the adoption order of the original rule, the Department recognized, in response to comments, that HMOs and preferred provider carriers would on occasion require information, such as police reports, which would be needed to resolve coverage issues. However, the adoption order made clear that the Department would monitor complaint trends and take appropriate action, if necessary.

The proposed amendments to §§21.2804, 21.2805 and 21.2806, which relate to required disclosures, further clarify that the disclosure of data elements, attachments, and additional clean claim elements must conform with the disclosure formats of proposed §21.2818. The proposal also clarifies that an HMO or preferred provider carrier must give the 60 day disclosure of required data elements, attachments or additional clean claim elements. The Department has received many complaints from providers and physicians who received the disclosure pursuant to §21.2804 or §21.2805, but had claims rejected before the end of the 60 days for failing to include the attachment or additional clean claim element referenced in the disclosure. The proposed amendments do not change the current practice, but further reinforce the language in §§21.2804, 21.2805 and 21.2806.

The proposed amendment to §21.2807 clarifies that the statutory claims payment period begins upon receipt of a claim at the address designated by the HMO or preferred provider carrier to receive claims. Regardless of whether the recipient of the claim is a delegated claims processor, or some other entity the HMO or preferred provider carrier designates, such as a clearinghouse or repricing company, receipt of the claim will begin the statutory claims payment period.

The proposed amendments to §21.2809 clarify the audit process utilized by HMOs and preferred provider carriers by providing a specific time limitation of 180 days to complete the audit process. In the original rule's adoption order, the Department stated its belief that since it was in the HMO's or preferred provider carrier's interest to quickly audit claims, it was not necessary at that time to implement a time frame. However, the Department has become aware of numerous complaints from physicians and providers alleging that clean claim audits by HMOs and preferred provider carriers are exceeding reasonable time frames. These complaints indicate a need to further refine the audit process to facilitate the timely and efficient payment of claims. It is the Department's understanding that the majority of audits are routinely completed in substantially less time than 180 days, and that a very small percentage of claims require 180 days to complete. The Department has proposed a maximum 180 day time frame as an outside limit, which it believes will provide HMOs and preferred provider carriers sufficient time to complete an audit. The Department expects that HMOs and preferred provider carriers will complete audits and make additional payments or request refunds within a much shorter time frame than the maximum number of days. The proposed amendments also provide that payments made to comply with the audit process are not admissions of liability on a claim, which replaces a similar provision in the current rule, and that an HMO or preferred provider carrier can continue to investigate claims past the audit period to determine its liability on those claims and seek a refund, if appropriate.

The proposed amendment to §21.2811 states that the disclosure of information regarding processing procedures to physicians or providers must conform with the formats in proposed new §21.2818.

The proposed amendment to §21.2815, failure to meet the statutory claims payment period, explains that while the HMO or preferred provider carrier can contract with the physician or provider for a penalty rate for late payment, the HMO or preferred provider carrier is required to pay the greater of the full amount of the billed charges submitted on the clean claim or any contracted penalty rate for the late payment. This is consistent with the requirements of House Bill 610, which provides penalties for failure to comply. The Department believes that clarification of this requirement is necessary, based on the complaints the Department has received that some contracts between HMOs or preferred provider carriers and physicians and providers contain nominal penalty rates, which effectively circumvent the legislatively established incentive for claims to be paid in a timely manner as established by House Bill 610. The proposed amendment to §21.2815 also clarifies that if an HMO or preferred provider carrier fails to pay a clean claim correctly or denies a valid clean claim, that failure is considered a violation of Article 20A.18B(c) or Article 3.70-3C §3A(c). By failing to pay the clean claim correctly or by incorrectly denying a valid clean claim, the HMO or preferred provider carrier has failed to take any of the measures outlined in existing §§21.2807 and 21.2809.

Proposed §21.2816, concerning date of claim receipt, clarifies how the physician or provider can demonstrate that a claim has been received by an HMO or preferred provider carrier. Although the Department did not include a similar provision in the original rule, it has subsequently received numerous complaints from physicians and providers who state that the HMO or preferred provider carrier maintains it has not received a mailed claim, or that only some claims sent were received. The proposed section provides a mechanism to establish a rebuttable presumption of the receipt of a claim and clarifies when the 45 day time period begins. For situations in which multiple claims are included in one mailing or hand delivery, proposed §21.2816 outlines a method for either party to identify individual claims sent in a single mailing or delivery. By identifying in §21.2816 when a claim is presumed to have been received by the HMO or preferred provider carrier, each party should be able to ensure that claims sent are also received, which will result in claims being paid in the appropriate time frame. The proposed section also identifies the information that should be included in a claims mail log, if a physician or provider chooses to maintain one, and includes an example form.

Proposed new §21.2817 outlines statutory and regulatory provisions in Article 20A.18B, Article 3.70-3C and new proposed §21.2809 which cannot be altered by contracts between the HMOs and preferred provider carriers and physicians and providers. The Department has received reports that some contracts between physicians or providers and HMOs and preferred provider carriers include language which circumvents the intent of Article 20A.18B or Article 3.70-3C by extending the 45 day time frame for paying clean claims or by limiting a physician's or provider's right to reasonable attorney fees if the physician or provider resorts to the judicial system to obtain payment for their services.

Proposed new §21.2818 clarifies that when a document containing a required disclosure is sent by the HMO or preferred provider carrier to the physician or provider, the document must contain a heading that demonstrates that the document contains a disclosure. Proposed §21.2818 is designed to address concerns that required disclosures may not be evident to the physician or provider if it is contained in a document that fails to properly identify its contents.

Proposed new §21.2819 provides that the proposed amendments and new sections apply to claims filed for non-confinement services, treatment or supplies rendered on or after September 5, 2001 and to claims filed for services, treatments, or supplies for in-patient confinements in a hospital or other institution that began on or after September 5, 2001.

Proposed §21.2820 provides for severability of the rule, and has been renumbered to accommodate the new proposed sections in the rule. The proposed repeal of §21.2816 is published elsewhere in this issue of the Texas Register.

The Department will consider the adoption of the proposed amendments to §§21.2803 - 21.2807, 21.2809, 21.2811, 21.2815, and new §§21.2816 - 21.2820 concerning submission of clean claims by physicians and providers to HMOs and preferred provider carriers in a public hearing under Docket No. 2490 scheduled for August 22, 2001, at 9:30 a.m. in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas.

Kim Stokes, Senior Associate Commissioner of Life, Health and Licensing, has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Ms. Stokes has determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be that all clean claims are paid in a timely manner, as required by House Bill 610, and that there will be a reduction in the number of disputes between physicians or providers and HMOs and preferred provider carriers. The proposed rules will clarify when the statutory time frames begin and will more clearly define those elements that can be included in a clean claim. By ensuring that HMOs and preferred provider carriers clearly identify documents which contain disclosures related to claims, physicians and providers will be able to more effectively incorporate the necessary changes to submit a clean claim. The proposed rules rearticulate that before requiring an element, the HMO or preferred provider carrier must provide 60 days notice of the new element, which ensures that claims sent without the new element during the 60 days after the notice are promptly paid pursuant to statutory time frames. The intent of the proposed rules is to minimize or eliminate disputes between HMOs or preferred provider carriers and physicians and providers when a clean claim is not paid correctly or when a valid clean claim is denied. Except as specifically enumerated below, any cost to persons required to comply with these sections each year of the first five years the proposed sections will be in effect are the result of the legislative enactment of House Bill 610 and not the result of the adoption, enforcement or administration of the sections.

If an HMO or preferred provider carrier fails to comply with the required time frames, House Bill 610 requires HMOs and preferred provider carriers to pay the full amount of billed charges submitted on a clean claim or the contracted penalty rate for late payment. Since House Bill 610 does not identify which amount should be payable when an HMO or preferred provider carrier fails to meet required time frames, it is necessary for the Department to utilize its rulemaking authority under the statute to make that determination. Consistent with the intent of House Bill 610 to facilitate prompt payment of clean claims to physicians and providers and to discourage noncompliance, the Department has determined that requiring HMOs and preferred provider carriers to pay the greater of the full amount of billed charges submitted on a clean claim or any contracted penalty rate for late payment will encourage prompt payment of claims. Any costs associated with the failure to pay clean claims in a timely manner is attributed to House Bill 610 and the provisions of House Bill 610 which outline the result of failure to comply with required time frames. The Department anticipates and contemplates compliance with the required time frames. HMOs and preferred provider carriers that are in compliance will not incur costs. The proposed rule will result in more efficient processing of clean claims, which will benefit HMOs, preferred provider carriers, physicians, providers, insureds and enrollees.

The proposed rules establish a means for a physician or provider to establish a rebuttable presumption that a claim was received by an HMO or preferred provider carrier, thereby reducing the need for multiple resubmissions of the same claim and the use of personnel to track claims sent or received. The proposed rules do not require that the claims mail log be maintained, and the Department believes that most physician or provider practices currently have a method for keeping track of claims sent by mail or hand delivery. The proposed rule does not require HMOs and preferred provider carriers to use the claims mail log. The proposed rule provides a mechanism for HMOs and preferred provider carriers to verify that the mailed or hand delivered claims include the claims identified in the claims mail log. This allows the HMO or preferred provider carrier to contact the physician or provider about any claims that may or may not have been included with the mailed or hand delivered claims. The anticipated result will be that claims will not be missed and will be paid within the required time frames. If an HMO or preferred provider carrier does not have a process in place to coordinate faxed claims mail logs with mailed or hand delivered claims, the HMO or preferred provider carrier may choose to implement a process. Based on discussions with industry, the Department anticipates that the cost of personnel necessary to process claims mail logs would be one full-time employee paid at $25,000 per year processing claims mail logs for every 150,000 enrollees. The actual cost would vary depending on how many claims are filed in a given time frame and whether there is currently adequate personnel who could include claims mail log processing within their job activities. The cost would also vary from carrier to carrier, based on enrollment and the type of carrier.

The proposed rules also establish specific time frames for completing the audit process and either issuing subsequent payment or recouping refunds based on audit results. Since House Bill 610 established an audit process, any economic costs of performing an audit are the result of the legislative enactment of House Bill 610 and not the result of the adoption, enforcement, or administration of the amendments. However, since the proposed rules specify when the audit process ends, it is possible that on very limited occasions, some HMOs and preferred provider carriers could incur costs associated with the timely completion of the audit process. Auditing costs will vary depending on the number of claims audited by the preferred provider carrier or HMO. Based on discussions with industry, it has been represented to the Department that a claims examiner for an HMO or preferred provider carrier with limited plan codes and/or sophisticated computer systems can examine 100-150 claims per day. A claims examiner for an HMO or preferred provider carrier with multiple plan codes and/or less sophisticated computer systems can examine 50-75 claims per day. Information obtained from the industry indicate that a claims examiner is paid an average of $38,000 per year and that approximately 5% or less of claims require continued examination following the 180 th day after receipt by the HMO or preferred provider carrier. Total costs attributed to the specified time frame for completing the audit process will vary based on the number of claims examined and whether adequate personnel are already in place to perform claims examination. Costs will also vary depending on the number of claims an HMO or preferred provider carrier will choose to audit 45 days after receipt.

House Bill 610 requires that upon completion of the audit process an additional payment would be made to the physician or provider or that a refund would be due to the HMO or preferred provider carrier within 30 calendar days. By imposing a specific time frame on the audit process, it is possible that on very limited occasions, the HMO or preferred provider carrier will lose the time value of the additional payment amount made within 30 days of the completion of the audit until the day the carrier determines it was not liable. The loss of the time value of the additional payment will vary depending on the number of claims the HMO or preferred provider carrier will continue to investigate after the 180 th day and on the number of those claims for which the HMO or preferred provider carrier determines it was not liable. The additional payment is based on a percentage of the contracted benefit amount for the claim; therefore, the loss of the time value of the additional payment will vary depending upon the contracted benefit amount of the claim. Since each claim is examined individually, and each claim is for different amounts, it is not possible for the Department to estimate by precise dollar amount how much in additional payments may be made by the HMO or preferred provider carrier within the 30 days of the completion of the audit process.

The cost per hour of labor or loss of time value on additional payments will not vary between the smallest and largest businesses, assuming that HMOs and preferred provider carriers which qualify as small or micro businesses deal with approximately the same percentage number of mailed or hand delivered claims. There is no anticipated difference between the costs of personnel necessary to audit claims for micro, small or large HMOs and preferred provider carriers, since the cost is proportionate to the percentage of claims audited. In addition, there is no anticipated difference between amounts of additional payment for micro, small or large HMOs and preferred provider carriers since the cost is proportionate to the amount of the audited claim. Therefore, it is the Department's position that the adoption of these proposed sections will have no adverse effect on small or micro businesses. Regardless of the fiscal effect, the Department does not believe it is legal or feasible to reduce or waive the requirement for small or micro businesses. To do so would allow the differentiation of claims handling of small preferred provider carriers and HMOs to the claims handling of large preferred provider carriers and HMOs.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on September 4, 2001 to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Pat Brewer, HMO Project Director, Mail Code 103-6A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.

The amendments and new sections are proposed under the Insurance Code Articles 20A.18B, 20A.22, 3.70-3C §3A, 3.70-3C §9 and §36.001. Article 20A.18B(a) provides that a clean claim is determined under the Department's rules and Article 20A.18B(o) provides that the commissioner may adopt rules as necessary to implement the Prompt Payment of Physician and Providers section. Article 20A.22(a) provides broad rulemaking authority of the Texas Health Maintenance Organization Act. Article 3.70-3C §3A(a) provides that a clean claim is determined under the Department's rules and Article 3.70-3C §3A(n) provides that the commissioner may adopt rules as necessary to implement the Prompt Payment of Preferred Providers section. Article 3.70-3C §9 allows the commissioner to adopt rules to implement the provisions relating to Preferred Provider Benefit Plans. Section 36.001 provides that the Commissioner of Insurance may adopt rules to execute the duties and functions of the Texas Department of Insurance only as authorized by statute.

The following articles are affected by this proposal: Insurance Code Articles 20A.18B and 3.70-3C

§21.2803. Elements of a Clean Claim.

(a) - (b) (No change.)

(c) Attachments. In addition to the required data elements set forth in subsection (b) of this section, HCFA has developed a variety of manuals that identify various attachments required of different physicians or providers for specific services. An HMO or a preferred provider carrier may use the appropriate Medicare standards for attachments in order to properly process claims for certain types of services. An HMO or a preferred provider carrier may only require as attachments information that is contained in the physician's or provider's medical file. Before any attachments may be required, the HMO or preferred provider carrier shall satisfy the notification procedures set forth in §21.2804 of this title (relating to Disclosure of Necessary Attachments).

(d) Additional clean claim elements. Additional elements beyond the required data elements and attachments identified in subsections (b) and (c) of this section may be required. Before any additional clean claim elements may be required, the HMO or the preferred provider carrier shall satisfy the notification procedures set forth in §21.2805 of this title (relating to Disclosure of Additional Clean Claim Elements). An HMO or a preferred provider carrier may only require as additional clean claim elements information that is contained in the physician's or provider's medical file.

(e) - (g) (No change.)

§21.2804. Disclosure of Necessary Attachments. For attachments described in §21.2803(c) of this title (relating to Elements of a Clean Claim) to be required as part of a clean claim, the HMO or preferred provider carrier shall comply with §21.2818 of this title (relating to Disclosure Formats) and paragraphs (1), (2), or (3) of this section. An [ If an] HMO or preferred provider carrier may not require [ requests such] an attachment unless it has given the physician or provider the disclosure mandated by this section at least 60 calendar days before requiring the attachment as an element of the clean claim and complied [ fails to comply] with paragraphs (1), (2), or (3) of this section [, the request will not extend the statutory claims payment period]. Claims filed during the 60 day period after receipt of the disclosure do not have to include the required attachment identified in the disclosure.

(1) Written notice. The HMO or preferred provider carrier may provide written notice to all affected physicians or providers that such attachments are necessary. The notice shall identify with specificity the attachment(s) required and must be received by the physician or provider at least 60 calendar days before requiring such attachment as an element of a clean claim.

(2) Manual or other document that sets forth the claims filing procedures. The HMO or preferred provider carrier may provide updated revisions to the physician or provider manual or other document that sets forth the claims filing procedures. The revision shall identify with specificity the attachment(s) required and must be received by the physician or provider at least 60 calendar days before requiring such attachment as an element of a clean claim.

(3) Contract. The HMO or preferred provider carrier may provide for such attachments to be required as part of a clean claim in the contract between the HMO or preferred provider carrier and the physician or provider. As a means of setting forth the attachments that are required as part of a clean claim, the contract shall either identify with specificity the attachments that are required as elements of a clean claim or reference the physician or provider manual or other document that sets forth the claims filing procedures. If the contract identifies with specificity the attachments that are required as elements of a clean claim, the additional written notice as specified in paragraphs (1) and (2) of this section is not required. If the contract references the physician or provider manual or other document that sets forth the claims filing procedures as a means of setting forth the attachments that are required as part of a clean claim, the notice specified in paragraph (2) of this section is required. If the contract provides for mutual agreement of the parties as the sole mechanism for requiring attachments, then the written notice specified in paragraphs (1) and (2) of this section does not supersede the requirement for mutual agreement.

§21.2805. Disclosure of Additional Clean Claim Elements. An HMO or preferred provider carrier may require additional elements for clean claims beyond the required data elements and attachments identified in §21.2803(b), (c) and (e) of this title (relating to Elements of a Clean Claim). To require such additional elements as part of a clean claim, the HMO or preferred provider carrier shall comply with §21.2818 of this title (relating to Disclosure Formats) and paragraphs (1), (2), or (3) of this section. An [ If an] HMO or preferred provider carrier may not request [ requests] additional elements as part of a clean claim unless it has given the physician or provider the disclosure mandated by this section at least 60 calendar days before requiring the additional element as an element of the clean claim and complied [ fails to comply] with paragraphs (1), (2), or (3) of this section[ , the request will not extend the statutory claims payment period].

(1) Written notice. The HMO or preferred provider carrier may provide written notice to all affected physicians or providers that such additional elements are necessary. The notice shall identify with specificity the additional required elements and must be received by the physician or provider at least 60 calendar days before the HMO or preferred provider carrier designates such additional elements as a requirement of a clean claim.

(2) Manual or other document that sets forth the claims filing procedures. The HMO or preferred provider carrier may provide updated revisions to the physician or provider manual or other document that sets forth the claims filing procedures. The revision shall identify with specificity the additional required elements and must be received by the physician or provider at least 60 calendar days before the HMO or preferred provider carrier designates such additional elements as a requirement of a clean claim.

(3) Contract. The HMO or preferred provider carrier may provide for such additional elements to be required in the contract between the HMO or preferred provider carrier and the physician or provider. As a means of setting forth the additional elements that are required as part of a clean claim, the contract shall either identify with specificity the additional required elements or reference the physician or provider manual or other document that sets forth the claims filing procedures. If the contract identifies with specificity the additional required elements, the additional written notice as specified in paragraphs (1) and (2) of this section is not required. If the contract references the physician or provider manual or other document that sets forth the claims filing procedures as a means of setting forth the additional required elements, the notice specified in paragraph (2) of this section is required. If the contract provides for mutual agreement of the parties as the sole mechanism for requiring additional clean claim elements, then the written notice specified in paragraphs (1) and (2) of this section does not supersede the requirement for mutual agreement.

§21.2806. Disclosure of Revision of Data Elements, Attachments, or Additional Clean Claim Elements. An HMO or preferred provider carrier may revise its requirements for data elements, attachments or additional clean claim elements that have previously been properly included as elements of a clean claim pursuant to §§21.2803(b), (c), (d), and (e), 21.2804, and 21.2805 of this title (relating to Elements of a Clean Claim, Disclosure of Necessary Attachments, and Disclosure of Additional Clean Claim Elements). To revise the requirements for data elements, attachments, or additional clean claim elements, the HMO or preferred provider carrier shall provide advance written notice to all affected physicians or providers of such revisions in accordance with §21.2818 of this title (relating to Disclosure Formats). The notice shall identify with specificity the revisions to data elements, attachments, or additional clean claim elements, and must be received by the physician or provider at least 60 calendar days before the HMO or preferred provider enforces such revisions to the requirements of a clean claim. If the contract between the HMO or preferred provider carrier and the physician or provider provides for mutual agreement of the parties as the sole mechanism for requiring revised data elements, attachments or additional clean claim elements that have previously been properly included as elements of a clean claim pursuant to §§21.2803(b), (c), (d), and (e), 21.2804, and 21.2805 of this title, then the written notice specified in this section does not supersede the requirement for mutual agreement.

§21.2807. Effect of Filing a Clean Claim.

(a) The statutory claims payment period begins to run upon receipt of a clean claim from a physician or provider at the address designated by the HMO or preferred provider carrier, in accordance with §21.2811 of this title (relating to Disclosure of Processing Procedures), whether it be the address of the HMO, preferred provider carrier, [ or] a delegated claims processor , or any other entity, including a clearinghouse or a repricing company, designated by the HMO or preferred provider carrier to receive claims. The date of claim payment is as determined in §21.2810 of this title (relating to Date of Claim Payment).

(b) (No change.)

(c) (No change.)

§21.2809. Audit Procedures.

(a) If an HMO or preferred provider carrier is unable to pay or deny a clean claim, in whole or in part, within the statutory claims payment period specified in §21.2802(25)(B) of this title (relating to Definitions), the unpaid portion of the claim shall be classified as an audit, and the HMO or preferred provider carrier shall pay 85% of the contracted rate on the unpaid portion of the clean claim within the statutory claims payment period. [ Payment of 85% of the contracted rate on the clean claim is not an admission that the HMO or preferred provider carrier acknowledges liability on that claim.]

(b) The [ Upon completion of the audit, if the] HMO or preferred provider carrier shall complete the audit within 180 calendar days from the date the clean claim is received. If the HMO or preferred provider carrier determines upon completion of the audit that a refund is due from a physician or provider, such refund shall be made within 30 calendar days of the later of written notification to the physician or provider of the results of the audit or exhaustion of any subscriber or patient appeal rights if a subscriber or patient appeal is filed before the 30-calendar-day refund period has expired, and may be made by any method, including chargeback against the physician or provider, or agreements by contract. The written notification of the results of the audit shall include a listing of the specific claims paid and not paid pursuant to the audit, including specific claims and amounts for which a refund is due. Unless otherwise agreed to by contract, if an HMO or preferred provider carrier intends to make a chargeback, the written notification shall also include a statement that the HMO or preferred provider carrier will make a chargeback unless the physician or provider contacts the HMO or preferred provider carrier to arrange for reimbursement through an alternative method. Nothing in this provision shall invalidate or supersede existing or future contractual arrangements that allow alternative reimbursement methods in the event of overpayment to the physician or provider.

(c) Upon completion of the audit as required by subsection (b) of this section, if [ the HMO or preferred provider carrier determines that] additional payment is due to the physician or provider, such [ additional] payment shall be made within 30 calendar days after the completion of the audit.

(d) Payments made pursuant to this section on a clean claim are not an admission that the HMO or preferred provider carrier acknowledges liability on that claim.

(e) Following completion of the audit process, an HMO or preferred provider carrier is not precluded from continuing to investigate its liability on a previously audited claim and seeking a refund of claim payment.

§21.2811. Disclosure of Processing Procedures.

(a) In contracts with physicians or providers, or in the physician or provider manual or other document that sets forth the procedure for filing claims, or by any other method mutually agreed upon by the contracting parties, an HMO or preferred provider carrier must disclose to its physicians and providers in accordance with §21.2818 of this title (relating to Disclosure Formats):

(1) the address, including a physical address, where claims are to be sent for processing;

(2) the telephone number at which physicians' and providers' questions and concerns regarding claims may be directed;

(3) any entity along with its address, including physical address and telephone number, to which the HMO or preferred provider carrier has delegated claim payment functions, if applicable; and

(4) the address and physical address and telephone number of any separate claims processing centers for specific types of services, if applicable.

(b) An HMO or preferred provider carrier shall provide no less than 60 calendar days prior written notice of any changes of address for submission of claims, and of any changes of delegation of claims payment functions, to all affected physicians and providers with whom the HMO or preferred provider carrier has contracts.

§21.2815. Failure to Meet the Statutory Claims Payment Period. An HMO or preferred provider carrier that fails to comply with the requirements of §21.2807(b) of this title (relating to Effect of Filing a Clean Claim) and §21.2809(a) and (c) of this title (relating to Audit Procedures) shall pay the greater of the full amount of the billed charges submitted on the clean claim or any [ pay the] contracted penalty rate for late payment set forth in the contract between the provider or physician and the HMO or preferred provider carrier. Failure to pay a clean claim correctly or denial of a valid clean claim that results in a failure to comply with the requirements of §21.2807(b) and §21.2809(a) and (c) of this title is considered a violation of Article 20A.18B(c) or Article 3.70-3C §3A(c). Any amount previously paid or any charge for a non-covered service shall be deducted from the payment. This section shall not apply when there is failure to comply with a contracted claims payment period of less than 45 calendar days as provided in §21.2802(25)(A) of this title (relating to Definitions), and Article 3.70-3C, §3(m) or Article 20A.09(j) of the Insurance Code.

§ 21.2816. Date of Claim Receipt.

(a) For purposes of establishing a rebuttable presumption to demonstrate the date of mailing or delivery of a claim, the physician or provider shall, as appropriate:

(1) submit the claim by United States mail, first class, by United States mail return receipt requested or by overnight delivery service, and maintain a log that complies with subsection (f) of this section that identifies each claim included in the submission, include a copy of the log with the relevant submitted claim, fax a copy of the log to the HMO, preferred provider carrier or delegated claims processor on the date of the submission and maintain a copy of the fax transmission acknowledgment;

(2) submit the claim electronically and maintain proof of the electronically submitted claim;

(3) fax the claim and maintain proof of facsimile transmission; or

(4) hand deliver the claim, maintain a log that complies with subsection (f) of this section that identifies each claim included in the delivery, include a copy of the log with the relevant hand delivery and maintain a copy of the signed receipt acknowledging the hand delivery.

( b) If a claim for medical care or health care services provided to a patient is submitted by United States mail, first class, the claim is presumed to have been received on the third day after the date the claim is submitted and the faxed log is transmitted, or if the claim is submitted using overnight delivery service or United States mail return receipt requested, on the date the delivery receipt is signed.

(c) If the claim is submitted electronically, the claim is presumed received on the date of the electronic verification of receipt by the HMO or preferred provider carrier or the HMO's or preferred provider carrier's clearinghouse. If the HMO's or the preferred provider carrier's clearinghouse does not provide a confirmation of receipt of the claim within 24 hours of submission by the physician or provider or the physician's or provider's clearinghouse, the physician's or provider's clearinghouse shall provide the confirmation. The physician's or provider's clearinghouse must be able to verify that the claim contained the correct payor identification of the entity to receive the claim.

(d) If a claim is faxed, the claim is presumed received on the date of the transmission acknowledgment.

(e) If a claim is hand delivered, the claim is presumed received on the date the delivery receipt is signed.

(f) The claims mail log maintained by physicians and providers should include the following information: name of claimant; address of claimant; telephone number of claimant; name of addressee; name of carrier; date of mailing or hand delivery; subscriber name; subscriber ID number; patient name; date(s) of service/occurrence, total charge, and delivery method.

(g) An example of a claims mail log that may be maintained by physicians and providers is as follows:

FIGURE 28 TAC 21.2816(g)

CLAIMS MAIL LOG

Name of Claimant: ___________________________________________

Claimant Address ___________________________________________

___________________________________________

Claimant Telephone: (____) ________________

Name of Addressee: ___________________________________________

Name of Carrier: ___________________________________________

Date of Mailing or Hand delivery _____________ Page ____ of____

Subscriber Name

Subscriber ID#

Patient Name

Date(s) of Service/

Occurrence

Total Charge

Delivery Method (M) (HD)

§21.2817. Terms of Contracts. Contracts between HMOs or preferred provider carriers and physicians and providers shall not include terms which:

(1) extend the statutory or regulatory time frames; or

(2) waive the physician's or provider's right to recover reasonable attorney fees pursuant to Articles 20A.18B(g) and 3.70-3C §3A(g).

§21.2818. Disclosure Formats. Any document containing a disclosure required under §§21.2804, 21.2805, 21.2806 or 28.2811 of this title (relating to Disclosure of Necessary Attachments, Disclosure of Additional Clean Claim Elements, Disclosure of Revision of Data Elements, Attachments or Additional Clean Claim Elements, and Disclosure of Processing Procedures) shall include a heading on the first page of the document in a prominent location and in a type that is boldfaced, capitalized, underlined or otherwise set out from the surrounding written material so as to be conspicuous that identifies the document as one containing a required disclosure.

§21.2819. Applicability. The amendments to §§21.2803 - 21.2807, 21.2809, 21.2811, 21.2815 of this title (relating to Elements of a Clean Claim, Disclosure of Necessary Attachments, Disclosure of Additional Clean Claim Elements, Disclosure of Revision of Data Elements, Attachments or Additional Clean Claim Elements, Effect of Filing a Clean Claim, Audit Procedures, Disclosure of Processing Procedures, and Failure to Meet the Statutory Claims Payment Period), and new §§21.2816 - 21.2818 of this title (relating to Date of Claim Receipt, Terms of Contracts, and Disclosure Formats) apply to claims filed for non-confinement services, treatments or supplies rendered on or after September 5, 2001, and to claims filed for services, treatments, or supplies for in-patient confinements in a hospital or other institution that began on or after September 5, 2001.

§21.2820. Severability. If a court of competent jurisdiction holds that any provision of this subchapter is inconsistent with any statutes of this state, is unconstitutional, or is invalid for any reason, the remaining provisions of this subchapter shall remain in full effect.



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