• Increase Text Icon
  • Decrease Text Icon
  • Email Icon
  • Printer Icon
You are here: 

Archived File - for Reference Use

This file is historical in nature. Links and contact information may be outdated and no longer valid.


SUBCHAPTER T. SUBMISSION OF CLEAN CLAIMS

28 TAC §§21.2803-21.2807, 21.2809,

21.2811, 28.2815-21.2820

The Commissioner of Insurance adopts 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). Sections 21.2803, 21.2805, 21.2809, 21.2811, 21.2815, 21.2816, 21.2818 and 21.2819 are adopted with changes to the proposed text as published in the August 3, 2001 issue of the Texas Register (26 TexReg 5747). Sections 21.2804, 21.2806, 21.2807, 21.2817 and 21.2820 are adopted without changes and will not be republished.

The amendments and new sections are necessary to provide greater clarity and more specificity in prompt payment procedures and will more fully implement legislation enacted by the 76th 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 clean 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 effective on 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 Commissioner held a public hearing on the proposed sections on August 22, 2001, under Docket No. 2490, at the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas.

Changes have been made to the proposed sections as published; however, none of the changes introduce a new subject matter or affect additional persons other than those subject to the proposal as originally published. In response to comments, the following changes have been made to the proposed sections: The wording in §21.2803(c) and (d) was changed to identify information that is either contained in or in the process of being incorporated into a patient’s medical or billing record maintained by the physician or provider. This change was made in response to comments from carriers who indicated that information may be readily available in the physician’s or provider’s office, but not yet incorporated into the patient’s medical or billing record. The purpose of the proposed rule change was to limit the type of information being required as attachments or additional clean claim elements to information that is easily accessed by physicians or providers. The wording in §21.2805 was changed to include the language in §21.2804, which clarifies that a claim filed during the 60 day period following receipt of a disclosure of an additional clean claim element does not have to contain that required element. After the 60 day period, a claim must contain the required additional clean claim element in order to be considered "clean." Language has been added to §21.2809(e) to clarify that a carrier may seek a refund by chargeback or other method on a clean claim following the audit process if the carrier determines that it did not have liability on the claim. The wording in §21.2811 relating to disclosures of processing procedures was changed to clarify that disclosures made in contracts are not subject to the requirements of §21.2818. The proposed language in §21.2811(a) was deleted and new subsection (c) was added to clarify that disclosures and disclosure formats do not apply to disclosures contained in contracts. Based on the numerous and diverse comments received from physicians, providers, HMOs and preferred provider carriers, the proposed language of "greater of the" and "any" was removed from §21.2815. The department recognizes that further analysis of physician and provider penalty payments is needed to determine the best way to address the concerns of all parties. The wording in §21.2815 was modified to clarify that failure to pay "correctly" on a clean claim would be failing to pay the "correct amount" on a clean claim "in accordance with the contract." The department, when evaluating whether clean claims are paid accurately, will consider the contractual amount of the fee that is due for services identified in the claim. The department clarified in §21.2815 that denial of a clean claim for which payment should have been made, rather than denial of a valid clean claim, constitutes a violation. Changes made to §21.2816 allow for the submission of claims mail logs electronically and provide that a claim is presumed received on the third business day after the day the claim is mailed and the claims mail log is faxed or electronically submitted. The department added language to §21.2816 to clarify that the parties may agree by contract to establish procedures to create a rebuttable presumption of receipt of a claim. The following subsections were renumbered accordingly. The department recognizes that some HMOs’ or preferred provider carriers’ clearinghouses may generate a rejection of a claim, rather than a confirmation of receipt. A change was made to §21.2816(d) so that in those cases, the physician’s or provider’s clearinghouse shall provide the appropriate confirmation. Section 21.2816(e) was changed to reflect that claims faxed after the payor’s normal business hours are presumed received on the following business day. Changes were made to §21.2816(g) to clarify that if a claims mail log is utilized by a physician or provider, the log must contain the information outlined in §21.2816(g). In addition, the department has added to §21.2816(g) the "claimant’s federal tax identification number" and "designated address" as information which must be included on the claims mail log. Changes were made to §21.2818 to indicate that disclosure formats do not apply to disclosures made in contracts.

Section 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 clean claim elements must be for documents which are either contained in or in the process of being incorporated into a patient’s medical or billing record maintained by the physician or provider.

Sections 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 to the disclosure formats of §21.2818, unless such disclosure is made in a contract. The rules also clarify that an HMO or preferred provider carrier must give the 60 day disclosure of required data elements, attachments or additional clean claim elements, unless the disclosure is included in the contract between the HMO or preferred provider carrier and the physician or provider. 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. Claims filed after the 60 day period must include the required attachment or additional data element in order to be considered "clean." The amendments do not change the current practice, but further reinforce the language in §§21.2804, 21.2805 and 21.2806.

Section 21.2807 clarifies that the statutory claims payment period begins upon receipt of a clean 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 clean claim will begin the statutory claims payment period.

Section 21.2809 clarifies the scope of the audit process utilized by HMOs and preferred provider carriers by providing a specific time limitation of 180 days to complete the audit. The rule also provides that payments made to comply with the audit time limitations are not admissions of liability on a clean claim, which replaces a similar provision in the current rule. It also provides that an HMO or preferred provider carrier can continue to investigate clean claims past the audit time limitation to determine its liability on those claims and seek a refund, if appropriate.

Section 21.2811 states that the disclosure of information regarding processing procedures to physicians or providers must conform with the formats in §21.2818, unless the disclosure is contained in a contract between the HMO or preferred provider carrier and the physician or provider.

Section 21.2815 clarifies that if an HMO or preferred provider carrier fails to pay the correct amount on a clean claim in accordance with the contract or denies a clean claim for which payment should have been made, 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 denying a clean claim that should have been paid, the HMO or preferred provider carrier has failed to take any of the measures outlined in existing §§21.2807 and 21.2809.

Section 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. It also clarifies that parties may contract to establish procedures to create a rebuttable presumption for the date of claim receipt. Section 21.2816 provides a mechanism to establish a rebuttable presumption of the date of claim receipt and clarifies when the 45 day time period begins. For situations in which multiple claims are included in one mailing or hand delivery, and to provide notice of claims sent by regular mail service, §21.2816 outlines a method for either party to identify all individual claims sent in a single mailing or delivery. By specifying through procedures contained 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 acted on in the appropriate time frame. The section also identifies the information that must be included in a claims mail log, if a physician or provider chooses to maintain one, and includes an example form. The claims mail log may be faxed or electronically transmitted.

Section 21.2817 outlines statutory and regulatory provisions in Article 20A.18B, Article 3.70-3C §3A and §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 §3A by extending the 45 day time frame for paying clean claims or by limiting a physician’s or provider’s right to reasonable attorney’s fees if the physician or provider resorts to the judicial system to obtain payment for their services.

Section 21.2818 clarifies that when a document containing a required disclosure, other than a contract, 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. Section 21.2819 provides that the amendments and new sections apply to claims filed for non-confinement services, treatment or supplies rendered on or after September 12, 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 12, 2001. Section 21.2820 provides for severability of the rule. The repeal of §21.2816 is published elsewhere in this issue of the Texas Register.

GENERAL

Many commenters expressed support for the proposed amendments and other commenters expressed support for certain sections. Numerous commenters acknowledged and applauded the department's attention to the various prompt pay issues, educational efforts and the creation of a Provider Ombudsman. Commenters suggested that both insurers and providers need to work together to solve the prompt pay problems. One commenter believed that the proposed amendments do not resolve the issues or problems. The commenter suggested that delays in payments are due to systemic problems of both insurers and providers, not intentional behavior/acts. The commenter expressed concerns that the proposed rules will increase tension and create additional problems between carriers and providers.

AGENCY RESPONSE: The department appreciates the commenters’ support. The department encourages carriers and providers to work together to solve problems. The department recognizes that these rules do not address all issues relating to prompt payment of claims and strongly encourages cooperation between carriers and providers with regard to ongoing issues. The department does not agree that the rules will increase tension or create additional problems between carriers and providers. To the contrary, the department believes that both providers and carriers have reflected a desire to work together to address issues related to prompt payment of claims. The department is committed to working with both parties to address these issues. The department will continue its educational efforts, provide information on its website, and provide guidance and leadership as necessary to resolve prompt payment issues. The department also encourages providers and carriers to work together, with or without the department's presence, to develop web pages or other educational materials to educate each other regarding various issues.  The department reminds the commenters that the statute does not provide an exception for noncompliance due to systemic problems.

Comment: A commenter recommended that TDI adopt a rule stating that the department will publish quarterly or semi-annual reports of justified versus unjustified provider complaints. The commenter also proposed that a rule be adopted allowing HMOs and preferred provider carriers to report patterns of claims filing errors. The commenter proposed language requiring the department to notify a physician or provider in writing when a pattern of errors was observed and educate the physician or provider regarding the patterns of errors. The proposed language by the commenter would also require the department to maintain a website link generally educating providers about commonly occurring claims filing errors.

AGENCY RESPONSE: Information regarding complaints is available to the public upon request pursuant to the Public Information Act. The department agrees with the commenter’s request to periodically provide information regarding provider complaints, but does not need a rule to do so. The department will make the provider complaint data available on the department website in the very near future. Information from HMOs and preferred provider carriers (hereinafter referred to as carriers), regarding patterns of claims filing errors may be helpful to carriers and providers and may assist the department in ascertaining areas of the rule that may need clarification or amendment. The department welcomes the receipt of information collected by carriers which addresses patterns of claims filing errors, but declines to adopt a rule requiring carriers to report such information. The department disagrees that a rule is necessary requiring the department to maintain a website link educating physicians and providers about commonly occurring claims filing errors. The department has conducted workshops and has had extensive contact with representatives from carriers as well as physicians and providers and has gathered and distributed information on claims filing practices. In addition, the department has established a website to provide information to physicians and providers, which may in the future provide more detailed information on claims filing errors. The department is strongly committed to continuing educational efforts for providers and carriers on all the issues related to clean claims and prompt pay.

Comment: Many commenters suggested that insurers be required to provide to physicians and providers the logic for bundling, and some commenters suggested that carriers not be allowed to change the information for a specified period of time and then only with notice to the physician or provider. A few commenters cited downcoding services and bundling codes as examples of failures to pay correctly, saying that these practices affect the patient-physician relationship. Several commenters recommended that plans disclose their bundling logic and other coding requirements to the physician or provider 30 days after it is requested; provide notices of changes in fee schedules to be received 90 days before the date of change; and allow the physician or provider to terminate the contract 30 days after receiving the information. One commenter said that a carrier must be required to disclose its fee schedules, downcoding, and bundling procedures in order for a physician or provider, as well as the department, to determine if a claim is paid correctly. The commenter believed that these practices are already addressed in statute (Article 20A.18B and Article 3.70-3C), and the department should clarify their legality by rule.

AGENCY RESPONSE: The department acknowledges the commenters’ concerns. However, the department believes any revision of the rule to include bundling and downcoding practices would be a substantive change which would require republication of the proposed rule. If the rule is republished, then the comment period is reopened and this will result in prolonging the implementation date of the rules. The department will be studying downcoding, bundling of services, and fee schedule disclosures and will continue to monitor complaints for possible future action.

It is the department’s position that Article 20A.18B(i) and Article 3.70-3C §3A(i), relating to claims processing policies and procedures, do not require carriers to disclose bundling and downcoding procedures. The policies and procedures identified in these statutes are those necessary for notifying physicians and providers of the information needed to file a clean claim and when the physician or provider can expect to be paid, and do not include bundling or downcoding disclosures.

Comment: Two commenters requested deadlines for the filing of claims. One commenter proposed the following: "No HMO or preferred provider carrier shall be in violation of §21.2815, §21.2807 or §21.2809 with respect to any clean claim which is initially submitted more than ninety (90) days after the service is rendered by the provider or the physician." One commenter suggested a 180 day deadline. Another commenter suggested that a provider who does not submit the claim within the specified time limits would forfeit the right to payment of the claim, and also recommended that the time frame for submission of a claim by a provider be extended by contract.

AGENCY RESPONSE: The department acknowledges the suggestions but declines to address setting a deadline for the filing of claims. The department believes that most contracts between physicians or providers and carriers contain provisions stating when a claim must be submitted after a service has been provided. The rule does not address the payment of clean claims submitted after the contractual claim filing deadline has expired.

Comment: Several commenters expressed concern over the substantial outstanding accounts receivable which they are currently experiencing for payments due for clean claims over 45 days.

AGENCY RESPONSE: The department recognizes the commenters’ concerns; however, the department would like to clarify that not all claims are subject to the prompt payment requirements outlined in the statute or rules. For example, the department does not have jurisdiction over claims involving self-funded ERISA plans; workers’ compensation; self-funded government, school and church health plans, including self-funded plans for the Employees Retirement System of Texas, the Teacher Retirement System of Texas, the University of Texas and the Texas Association of School Boards; out-of-state insureds; Medicaid/Medicare; federal employee plans; and TRICARE Standard (CHAMPUS). If the claim on which the complaint is based is one for which the department has jurisdiction, the commenters should file a complaint with the department.

Comment: One commenter stated that physician/carrier contracts are "full of legal terms and clauses" and that most physicians do not have the resources to adequately review contracts. The commenter requested that standardized language in contracts like those used in real estate transactions be required.

AGENCY RESPONSE: The department recognizes that contracts between physicians or providers and carriers can be complex. The department encourages all parties to carefully review contract terms to ensure that the parties are in full agreement with the terms, and seek appropriate counsel when necessary. Because each carrier and physician/provider relationship may have unique circumstances which would need to be addressed in the contract, the department does not believe that a standardized contract would be feasible. If either party is unsure of the meaning of a contract provision, the department encourages seeking clarification before proceeding.

Comment: A commenter noted in the preamble to the proposed rules, that the department did not identify the period of time in which it had noticed an increase in complaints regarding a delay in payment. The commenter questioned whether the complaints mentioned are under the requirements of House Bill 610.

AGENCY RESPONSE: While the preamble to the proposed rule amendments did not identify the time period in which the department noticed an increase in complaints, the department clarifies that such time period was subsequent to House Bill 610 and the adoption and effective date of the original clean claim rules.

Comment: A commenter stated that the proposed rule did not consider physician costs in the calculation of costs for small and micro-businesses.

AGENCY RESPONSE: In the preamble to the proposed rule, the department analyzed the costs and benefits of its proposal. With regard to physicians and providers, the department concluded that the proposed rule did not require that the mail log be maintained and that, in any event, it believed most physicians’ and providers’ practices currently had a method for keeping track of claims sent by mail or hand delivery. Accordingly, no costs were assessed for physicians and providers, including any that would qualify as small or micro-businesses. This analysis is still correct, as physicians and providers are not required to comply with this portion of the rule, which is completely optional. The proposed rule’s cost benefit analysis also stated that any other costs of other parts of the rule were the result of the legislative enactment of House Bill 610 rather than as a result of the adoption, enforcement or administration of the proposed rule amendments.

Comment: Some commenters stated that duplicate claims clog the system, are costly, and delay claims payment. Commenters requested that physicians be prohibited from submitting duplicate claims before the 45th day after a claim is initially submitted. A commenter proposed language addressing duplicative claims and suggested that denials of duplicative claims within the statutory time frame for the original claim not be considered by the department in determining whether an HMO or preferred provider carrier has complied with these rules. A commenter suggested changes which would prohibit a provider from submitting a duplicate claim unless requested to do so by the carrier.

AGENCY RESPONSE: The department recognizes concerns regarding duplicate claims filing, and discourages physicians and providers from resubmitting claims before the end of the statutory claims payment period. The department will continue to monitor complaints regarding duplicate claims and may address this issue in the future.

Comment: One commenter requested that in future rulemaking the department address verification or preauthorization of proposed health care services, and the retrospective denial of medically necessary services. The commenter also asked that these rules be forwarded to federal and state agencies for consideration of their application to both Medicare and Medicaid HMOs.

AGENCY RESPONSE: The department appreciates the comment and will monitor and evaluate for possible future action.

Comment: A commenter stated that the proposed rules should be changed to recognize the distinction between providers and individual market carriers, indicating that the proposed rules should not apply to insurers in the individual market. Two commenters indicated that individual market carriers often will not be able to make a determination about a claim within the 45 day time frame, and that chargebacks are problematic because they would require withholding payment on another insured’s claim. The commenter suggested changing the definition of a clean claim to exclude claims for which an individual market carrier may not be liable due to limitations in the policy.

A commenter also suggested that for individual policies and association group individual certificates, the clean claim designation should be suspended for a period not to exceed 75 days when the original clean claim or medical records reasonably raise a claim benefit issue of pre-existing condition, fraud in the application process, misrepresentation in the application process, or other limitation of coverage via a rider. The commenter proposed language which would allow individual market carriers to use "best reasonable efforts" to complete its claims investigation within 75 days, upon which the clean claim would be reinstated with original time frames.

A few commenters were concerned about how costly and time-consuming the processing of claims has become for carriers as well as providers and suggested changing the rule to require payment within 45 days after the receipt of documentation to process the claim for individually underwritten health insurance plans.

AGENCY RESPONSE: The department disagrees. While the department acknowledges that individual market carriers may have unique needs, House Bill 610 does not provide for a distinction between types of carriers and compliance with prompt pay requirements. If a carrier cannot make a determination of a clean claim within the statutory claims payment period, the carrier can continue to investigate the claim, but must advise the physician or provider in writing that it will audit the clean claim and pay 85% of the contracted rate. If the carrier determines that it had no liability on a clean claim, the carrier is entitled to reimbursement of the audit payment on that claim.

Comment: A few commenters suggested that the rules be amended to address fraud, recommending that when a clean claim raises issues of fraud, the 45 day time period be tolled in order to obtain documentation of potential fraud.

A commenter believed that the proposed rules will have a negative impact on fraud prevention activities. Carriers are required to pay 85% of a submitted claim even for potentially fraudulent claims. Providers who submit fraudulent claims are very proficient at claims submission and the commenter is very concerned about the requirement to "pay first, ask questions later," especially when it is difficult to recover the monies paid on these types of claims. The commenter also noted that House Bill 1562 places a duty on insurers to prevent the payment of fraudulent claims and suggested that §21.2809 include language related to the handling and payment of suspected fraud.

AGENCY RESPONSE: One of the purposes of the audit period is to allow carriers to investigate clean claims in which fraud is suspected. Therefore, the department declines to change the rule to toll the claims payment period even though additional information may be needed to determine the presence of fraud. The rules require that the carrier pay the remaining 15% of the contracted fee at the end of the 180 day audit period. The rules also allow a carrier to continue to investigate clean claims to determine liability and to obtain a refund of the audit payments if the carrier is not liable for the clean claim.

The department acknowledges the commenter’s concerns and the difficulty a carrier may have in recovering monies paid on fraudulent claims. The department also recognizes the passage of House Bill 1562 and believes other provisions of that bill, including amendments to the Occupations Code related to unprofessional conduct by a health care provider and amendments to the Insurance Code, including but not limited to, the notice required to be on all forms the carrier provides for a person to use in making a claim against the policy, should help deter fraudulent claims submissions by providers.

Comment: A commenter stated that claims for patients injured in motor vehicle accidents are being denied, and suggested that companies be required to pay claims for treatment of resulting injuries and seek a reimbursement from the auto insurance companies.

AGENCY RESPONSE: The department disagrees with the suggested change to the rule. If a carrier determines it has no liability on a clean claim, it can deny the claim within the 45 day time frame. If the provider believes that claims are being improperly denied and the department has jurisdiction over the claim, the department encourages the provider to file a complaint with the department.

Comment: Commenters urged that phrases such as "unless otherwise agreed to by contract" be deleted from the rule to stay within the "legislative intent" of House Bills 610 (76th session) and 1862 (77th session), as well as Senate Bill 1468 (76th session.)

AGENCY RESPONSE: The department declines to make the suggested change as the rule does not prevent the parties’ ability to contract, unless such arrangements conflict with statutory or regulatory requirements. The rule is within the legislative intent of House Bill 610 and Senate Bill 1468. House Bill 1862 was not enacted into law.

Comment: Many commenters recommended that claim processing administrative changes made by payors be filed with the state and that only one change per year, with 60 days notice, should be allowed.

AGENCY RESPONSE: The department disagrees that claims processing administrative changes should be limited to one change per year. Changes in processing procedures may be required for various reasons, some of which are unforeseen by carriers and physicians or providers. For example, carriers may need to change claims office addresses or telephone numbers due to internal organizational changes or due to termination of the contract between a third party administrator and the carrier.

Comment: A commenter suggested that if carriers cannot handle the volume of their enrollees, they should stop signing up enrollees until their pay systems are fixed.

AGENCY RESPONSE: The department recognizes the commenter’s concerns and will continue to monitor carriers for compliance with the prompt pay statutes and rules and take appropriate action when necessary. The department has authority under other provisions of the Insurance Code to prohibit carriers from enrolling new members or issuing new policies under certain circumstances and may utilize such means where appropriate.

Comment: A commenter stated that there is no reward for carriers who pay claims early or who review a claim and try to make it clean rather than denying it. Another commenter asserted that the proposed rules, plus administrative actions of TDI, place a tremendous burden on insurers who may cease working with providers to remedy deficiencies in claims and will instead automatically deny all non-clean claims.

AGENCY RESPONSE: Although the rules provide no reward for carriers who pay claims early or who attempt to make a deficient claim clean rather than deny it, the department acknowledges and appreciates that some carriers do. The department encourages this practice to continue and recognizes that there may be an administrative cost advantage to carriers who pay claims early and "clean" up claims, rather than reprocessing previously deficient claims.

The commissioner is charged with enforcing the statute. The department’s administrative actions were taken because of complaints that carriers were not complying with the law. The department recognizes that a carrier is allowed to deny all non-clean claims; however, the department is concerned with the commenter’s indication that they will eliminate current processes of working with providers to remedy deficiencies. The department encourages carriers to educate providers on common claim filing deficiencies and other issues and/or notify the department of such deficiencies or issues. The department will continually update its web page and take other steps necessary to assist both providers and carriers.

Comment: Some commenters urged the department to facilitate electronic claims filing and remove any barriers to electronic claims payment. A commenter suggested that the department use its authority to create a statewide electronic submission system. The commenter believed that an electronic system would standardize and simplify the number of required steps for submitting claims, eliminate opportunities for errors and would also reduce processing costs. A commenter recommended that the department address better ways to ensure prompt payment, including a "Corrective Action Process." The commenter recommended that, in lieu of fines for noncompliance, carriers be required to update and improve computers and systems for facilitating electronic claims submission.

AGENCY RESPONSE: The department will be studying means to facilitate electronic claims filing and payment and may propose rules or take other action, as appropriate. The department is committed to ensuring compliance with the prompt pay statute and rules, and will utilize all available means to ensure the accurate and timely payment of claims. Such means may include corrective action plans requiring systems improvements to facilitate prompt payments.

Comment: One commenter requested that the department implement by rule as much as possible of the provisions of House Bill 1862, which was not enacted during the past legislative session. Another commenter proposed that the department adopt the language in House Bill 1862 for access to insurance data.

AGENCY RESPONSE: Rulemaking on prompt payment must be based on the provisions of House Bill 610, which gives the department the authority to define a clean claim and otherwise implement the provisions of the statute. The department will continue to review issues relating to the prompt payment of clean claims and will propose further rules as necessary.

Comment: Several commenters expressed concerns about the differing requirements that carriers have regarding attachments and additional clean claim elements. The commenters proposed language which would require using a standardized form such as the HCFA 1500 or UB 92 and would only allow carriers to require as data elements those that can be required in an electronic transaction consistent with federal law. Some commenters expressed concerns about the physician’s ability to fill out required data fields, including Block 14, 15, 24C, and 32 and recommended that these fields either be eliminated or clarified. One commenter suggested changes to Block 7, 10, 11a, 11d, 14 and 15, 24C, and 32.

AGENCY RESPONSE: The department recognizes the commenters’ concerns about differing requirements by carriers and the use of a standardized form. However, the standardized elements referenced in the comments were not part of the proposed rule and cannot be considered as part of this adoption order. A rule change to the data elements would be substantive change from the proposed language and would require republishing of the rule.

Comment: One commenter objected to the requirement that a copy of the patient’s insurance card be included with a complaint filed with the department. The commenter recommended that either the verification of insurance eligibility or the insurance authorization for services be used. The commenter also objected to the requirement that complaints for mailed paper claims be accompanied by a certified mail return receipt.

AGENCY RESPONSE: The rule does not address the process for filing a complaint at the department about claims payment delays. In order to process complaints, the department generally requests a copy of the card to verify the department’s jurisdiction and to expedite the complaint handling process. Before the adoption of these rules, a certified mail return receipt was necessary for the department to determine when a claim was received.

Comment: Commenters stated that the agency definition for "billed charges" conflicts with House Bill 610 and recommended that the definition of billed charges in §21.2802 be changed to charges "as submitted" by the physician or provider.

AGENCY RESPONSE: Changes to §21.2802 were not part of this rule proposal. The department’s original rule adoption order clarified its intent that "billed charges" means usual and customary, to prevent physicians and providers from billing in excess of their usual charge.

Comment: A commenter stated that with the passage of House Bill 2600, Article 3.70-3C of the Insurance Code applies as a minimum standard for insurance carrier networks for workers’ compensation and therefore the proposed regulations affect the bill payment process under workers’ compensation. The commenters stated that the clean claim rules are redundant, are often times in direct conflict with the Texas Workers’ Compensation Commission payment guidelines contained in Chapters 134 and 133 of the Texas Administrative Code, and are not suited for workers’ compensation. The commenter stated the proposed rules do not include their application to workers’ compensation and, unless clarified, workers’ compensation carriers and administrators will be regulated by two sets of rules that often conflict. The commenter requested that the rule be clarified to specifically exclude application to workers’ compensation.

AGENCY RESPONSE: The department disagrees that a change is needed. Neither the rule nor House Bill 2600 stipulate that workers’ compensation claims are subject to the clean claim rules under the Texas Administrative Code Chapter 21 or Article 3.70-3C. While House Bill 2600 does incorporate standards of Article 3.70-3C to those insurance carrier networks and regional health care delivery networks created under the Texas Labor Code §§408.0221 and 408.0223, the standards incorporated are limited to that of preferred provider networks and not to the payment of claims. Additionally, House Bill 2600 states that the standards for preferred provider networks under Article 3.70-3C are adopted by reference except to the extent they are inconsistent with the Labor Code.

§21.2803

Comment: A few commenters expressed concerns about delay tactics used by carriers, including a carrier’s insistence on receiving prior records or other information before remitting payment, and asking for information from the patient and delaying payment of the claim until the information is verified. Examples of information requested include: certification of enrollment from the registrar’s office of a school and a signed, written statement from the insured indicating that there is no other coverage. A commenter recommended a rule prohibiting carriers from requiring physicians to provide this information, if the current rule does not address this. Another commenter recommended using a "universal form" that physicians could have patients fill out and send with the claim to avoid "fishing expeditions" for information.

AGENCY RESPONSE: The rules address the commenters’ concerns by limiting the information that carriers may require as clean claim attachments or additional elements. If a physician or provider submits a clean claim, the carrier must act on the claim within 45 days, pursuant to §21.2807. A carrier cannot "pend" a clean claim past the 45 day time frame, but the carrier can pay 85% of the contracted rate and audit the clean claim. The department believes that a "universal form" may not meet the needs of all carriers.

§21.2803(c) and (d)

Comment: Some commenters indicated that some providers may have information in their office which is not located in the medical file. Commenters recommended that the rule be changed to address the issue and suggested language about information which should be "reasonably" maintained by the physician or provider and which supports the services provided. A commenter recommended changing the rule to allow as attachments "information that is or, in accordance with community standards for medical recordkeeping, should be contained in the …file." Another commenter stated that the language appears "too limiting" and suggested the information relate to the episode of care. Several commenters requested that attachments only include information the provider already has in his/her possession, be clinical in nature, and should be allowed only if necessary to clarify the claim. One commenter suggested limiting requests to information which is "necessary to the payment and substantiation of the medical claim." Another commenter recommended that claims include information from healthcare facilities.

AGENCY RESPONSE: The department acknowledges that there may be information maintained by the physician or provider which has not been placed into the patient’s medical or billing record. Therefore, the department has changed §21.2803(c) as follows: "An HMO or preferred provider carrier may only require as attachments information that is either contained in or in the process of being incorporated into a patient’s medical or billing record maintained by the physician or provider." The department disagrees with proposed changes that would broaden the scope of information that can be required as attachments or additional clean claim elements beyond information contained in the patient’s medical or billing record. The department believes that it will be difficult to determine what "community standards" are.

Comment: A commenter proposed that if there is a change in required data elements and attachments, the additional element or attachment must be mutually acceptable to the provider and carrier. Other commenters complained about the burden created when carriers change the required information, and suggested that changes to attachments or additional clean claim elements should only be allowed once a year. A few commenters suggested a standardized form for filing claims. One commenter suggested a standardized definition of a clean claim, thus eliminating attachments and clean claim elements. Another commenter pointed out that standardized forms are used in the submission of claims. Several commenters requested that mandatory clean claim elements be limited to those required in the HCFA 1500 and UB 92 forms. The commenters also requested that health plans be required to keep a log of all contractual amendments, notices, and changes regarding claims filing.

AGENCY RESPONSE: Carriers must have the ability to react to changes in medical technology and to changes in provider billing patterns, etc., and must have the ability to change their requirements for attachments and additional clean claim elements so that claims can be properly and timely adjudicated. The carrier has a duty to ensure that claims are adjudicated properly because payment of noncovered services eventually increases the premiums charged to the carrier’s other enrollees. The department believes that frequent administrative changes are not in the carrier’s interest and that such changes are not made arbitrarily.

In addition, the rules contain a definition of a clean claim and identify those elements that must be included to ensure that a claim is "clean." While two standardized forms, the HCFA 1500 or UB 92, are used for the submission of claims, the department recognizes that some claims may require other supporting information, and the rules provide a mechanism for that information to be required as part of the clean claim. The log containing contractual amendments and other changes would be a new requirement placed on carriers, and since it was not in the proposed rule, it would require republishing of the rule.

Comment: A commenter stated that some carriers request all medical records in order to process a claim and another commenter sought clarification on when a medical record is required as an attachment for a clean claim. One commenter sought clarification as to whether or not a health plan can contract away its responsibility to pay for the requested medical record. Another commenter stated that it is important that the regulations provide physicians the ability to limit to the medical record what could be supplied with a claim. A commenter complained that it received requests for medical records four or five times for the same types of services. One commenter indicated that a carrier listed attachments that "may" be required in order to consider a claim "clean" and expressed concerns about which attachments would be required.

AGENCY RESPONSE: The department acknowledges the commenters’ frustration but also recognizes that carriers must have the ability to obtain documentation needed to process their claims. Medical records may be required as a clean claim attachment to assure that carriers have prompt access to that documentation. If a medical record is required as an attachment, it must be included with the claim in order for the claim to be considered "clean." In some cases, the carrier may request, not require, additional information after the clean claim is received. The department encourages physicians and providers to promptly provide the requested information. However, if the medical record is not required and the claim is clean, the carrier must act on the claim within 45 days, even if the carrier has not received the records. In terms of the cost of providing medical records, the department is not aware of any law or rule that would prohibit the contract between a physician or provider and carrier from containing provisions regarding the payment of medical records.

A carrier cannot list information that it may require as an attachment and then deny the claim as deficient for failing to include the "potential" attachment. Disclosures are intended to put the physician and provider on notice of exactly what information is required in order to submit a clean claim. A "laundry list" of potential attachments is inappropriate. The department will view a claim as clean if it does not include the information on the list of documents that may be required.

Comment: A commenter stated that carriers should only be able to ask for the same attachments that were requested previous to the effective date of House Bill 610. Some commenters suggested that the clean claim requirements be the same as those identified in House Bill 1862, which are the elements required by HCFA. A commenter proposed extensive language which would include requiring requests for attachments in writing within 30 days of receipt of the claim, only allowing one request per claim, requiring a determination of claim eligibility within 15 days of receipt of the attachment and using date of claim receipt requirements to determine when a request for submission of an attachment is received.

AGENCY RESPONSE: The department disagrees that a rule change is necessary. House Bill 610 removed a carrier’s ability to pend a claim while awaiting receipt of medical records or other attachments that the carrier requested following receipt of a clean claim. The ability to require attachments as clean claim elements provides a method to assure that carriers will be able to receive the information they need to promptly process the claims. The department believes that the rule as adopted sets reasonable limits on required attachments and additional clean claim elements.

The department recognizes that a "one size fits all" approach does not work with regard to the submission of clean claims because different types of insurance products require different supporting documentation. Nevertheless, the adopted rules limit the information that can be required as a clean claim attachment or element to that which is in or in the process of being incorporated into the patient’s medical or billing record.

§§21.2804 and 21.2805

Comment: Some commenters indicated that it was not clear if an additional attachment or clean claim element can be requested during or after the 60 day period. Some commenters proposed language that claims filed after the 60 day period must include required attachments.

AGENCY RESPONSE: The language in the adopted rule clarifies that claims filed during the 60 day period cannot be required to include the attachment or additional clean claim element. After the 60 day period, properly disclosed attachments must be included for a claim to be considered "clean." If a claim is filed after the 60 day period and does not include a required attachment or additional data element, then the claim is not "clean." At any time during claims processing, a carrier can request documentation it believes is necessary to process the claim; however §§21.2804 and 21.2805 only address required attachments or additional clean claim elements.

For clarification, however, the department has changed §21.2805 to add that, "Claims filed during the 60 day period after receipt of the disclosure do not have to include the required additional clean claim element identified in the disclosure."

Comment: Some commenters suggested adding clarifying language making providers and physicians subject to the same requirements for receipt of disclosures and verification of receipt with regard to the date of notification that HMOs or preferred provider carriers are subject to in regards to date of claims submission. A commenter suggested adding clarifying language stating that a request for additional information to complete a claim, process a claim, or make payment of a claim is presumed received by the physician or provider as outlined in §21.2816.

AGENCY RESPONSE: The department acknowledges the commenters’ suggestions, but believes that no changes are necessary at this time. The department has not received complaints indicating that physicians or providers are not receiving disclosure notices or other claims processing information. The department will monitor any complaints that HMOs or preferred provider carriers are having difficulty demonstrating receipt of disclosures by physicians or providers and may address this issue in the future.

§§21.2804, 21.2811, and 21.2818

Comment: Some commenters requested that the formatting requirements of §21.2818 not apply to disclosures made in provider manuals or contracts. A commenter recommended deleting this requirement and inserting it at the end of §21.2804(1). Another commenter recommended amending proposed §21.2811(a) by adding: "…for disclosures not made in contracts or provider manuals…" Another commenter suggested clarification that, if notice of additional clean claim elements and attachments are disclosed at the commencement of the contract effective date, then 60 days advance notice of changes is not required.

AGENCY RESPONSE: The department agrees. The department did not intend for §21.2818 to apply to disclosure of processing procedures for contracts, as outlined in §21.2811(a). The disclosures subject to §21.2811 and §21.2818 include manuals or documents which set forth the procedures for filing claims, or any other document containing written notice.

§21.2807

Comment: One commenter recommended clarifying that the HMO or preferred provider carrier remains responsible for timely payments of claims so long as the claim was submitted as directed by the HMO or preferred provider carrier. The commenter believed it was important that the responsibility of the payment for the claim reside with the payor, regardless of delegation to another party.

AGENCY RESPONSE: The department agrees. If a clean claim is submitted to the address designated by the carrier pursuant to §21.2811(a), then the carrier or its delegated claims payor must act on the claim within 45 days of its receipt at the designated address.

§21.2808

Comment: A commenter stated that although no proposed changes were made to this section of the rule, the commenter believes that the 45 day period in which a carrier must notify a provider that a claim is deficient is excessive. The commenter proposed the notification period be reduced to 30 days.

AGENCY RESPONSE: The department appreciates the commenter’s recognition that no change was proposed to this rule. As no change was proposed, the department cannot consider the recommended change in this adoption order. The department directs the commenter to the original adoption order in which this issue was addressed in detail.

Comment: Two commenters recommended a change to §21.2808 addressing deficient claims which would require the insurer/HMO to advise the provider of the nature of the deficiency and clarify that the claims payment period would not run until a clean claim is submitted.

AGENCY RESPONSE: The department disagrees for the reason stated in the response to previous commenters. In addition, the claims payment period does not begin until a clean claim, as defined by rule, is received by the carrier. If a deficient claim is filed, then the claims payment period is not triggered. Pursuant to §21.2808, the carrier must notify the provider that the claim is deficient within 45 days of receipt. The rule does not require that the carrier identify the nature of the deficiency as the physician or provider should have the information necessary to determine deficiencies pursuant to §§21.2803-21.2806.

§21.2809

Comment: Several commenters indicated that the proposed rule does not offer any incentive for the provider to submit additional information to the HMO or preferred provider carrier within the 180 calendar day audit period. The commenters stated that the 180 day period could be complied with, so long as the providers promptly respond to additional information requests. Commenters recommended extensions of the time frame if providers do not make timely responses to requests for information. A commenter proposed that the audit completion period be tied to the receipt of information from the provider. Another commenter suggested that language be included which compels the physician or provider to participate in the audit process. A commenter expressed concerns about the carriers’ ability to get medical records to conduct an audit. Commenters recommended that the audit time be tolled until the carrier gets the records necessary to undertake the audit, indicating that this could allow the audit time to be shortened. A commenter stated that there is no penalty for failure to comply with timely requests for records. A commenter expressed concerns about claims being considered "clean" when there is a need for further investigation.

AGENCY RESPONSE: The department recognizes that the carrier may want to gather additional information during the audit period and believes that physicians and providers will have an incentive to furnish this information in order to receive the remaining 15% of the contracted rate. The department has adopted the 180 day audit deadline to address physician and provider concerns about an open-ended audit period. At the end of 180 days, the audit must be concluded and any subsequent payment or refund made. This does not prohibit a carrier from continuing to investigate the claim and accessing information necessary to determine its liability.

As stated in the original rule’s adoption order when the issue of getting necessary information was raised, the department believes that the carrier and physicians or providers could agree by contract to the time in which the physician or provider must supply any requested information that is not already required as an attachment or element of a clean claim. The department also recognizes that carriers may need information from non-contracted physicians or providers, the insured/enrollee, or other sources. As to non-contracted physicians or providers, other laws address response time for requests for medical information necessary in the collection of fees for medical services, including Occupations Code, Title 3, Chapter 159 (Physician-Patient Communication); Health and Safety Code, Title 4, Chapter 241 (Hospitals); and Health and Safety Code, Title 4, Chapter 311 (Powers and Duties of Hospitals). While the department is not aware of any law that requires insureds/enrollees or other sources to provide requested information within a certain time period, it is anticipated that most insureds/enrollees will provide the information as they want their physician or provider to be paid since they are still seeking care or could in the future seek care from the physician or provider. As to other sources, the department cannot compel a response within a certain time frame, but anticipates that most sources will respond as promptly as circumstances will allow and as a matter of good business practice.

Comment: A commenter stated that if an HMO or preferred provider carrier takes the 30 days allowed to pay after the end of a full audit period, then it is possible that it could take 255 days from the date of billing to claims payment, which the commenter indicated was unreasonable. The commenter proposed that the audit time be reduced to 90 calendar days and recommended that the remaining 15% be credited as interest to the provider at a rate of prime +2% until the amounts are paid. Other commenters suggested that the carrier pay 100% of the claim when a claim is audited because of the difficulty of office software to carry the 15% balance.

AGENCY RESPONSE: The department disagrees that 180 days is unreasonable. The rule as originally adopted imposed no time limit for completion of the audit. Because a carrier could experience delays in receiving records or other documentation from an enrollee’s current or former physician or provider, and because the physician or provider has already received 85% of the contracted rate, the department believes that 180 days is reasonable and strengthens the rule as it existed prior to the adoption of these amendments. A carrier cannot be required to pay 100% of a claim when it is audited because the statute specifically requires an audit payment of 85% of the contracted rate.

Comment: Some commenters suggested deleting subsection (e) (relating to liability on a claim) from §21.2809, stating that any carrier that cannot complete claim processing and investigation in 225 days should not be operating and that it would create an indefinite audit process. Commenters also stated that insurers are not entitled to restitution for an overpayment that resulted solely from the insurer’s mistake. Another commenter stated that subsection (d) should be stricken as it undermines the long standing position of hospitals, which is supported by case law, that carriers are estopped from recovering payments made in error when the carrier should have known whether or not they had liability. Several commenters objected to a carrier’s ability to recoup funds paid in audit payments for which the carrier had no liability and suggested language which would require the carrier to provide written notice with specific information and allow the physician or provider to make arrangements for recoupment within 45 days of the notice.

AGENCY RESPONSE: The department disagrees with eliminating subsection (e). While the majority of clean claims are adjudicated within 45 days of receipt, it is possible that some clean claims will require an investigation that cannot be completed in 45 days. In such cases, the carrier is required to pay 85% of the contracted rate as an audit payment while it continues its investigation. While the rule as originally adopted did not impose a time limit for completion of the audit, the amended rule requires carriers to pay the remaining 15% of the contracted rate of an audit payment when liability cannot be determined within 180 days for the reasons stated above. Neither House Bill 610 nor the rules require carriers to make irrecoverable payments on clean claims for which the carrier is not liable. Audit payments are not claim payments made due to a carrier’s error but are payments required by statute while a carrier continues its investigation. Further, the statute specifically provides for the refund of the audit payments to the carrier if it does not have liability for the clean claim. The rule already requires the carrier to provide written notification of audit results. The department is aware of the case referenced by the commenters but does not believe that House Bill 610 intended for carriers to pay for claims for which they are not liable, but rather intended to shift the economic burden from the provider to the carrier. This is a different situation than what has been addressed by the courts.

Comment: A commenter requested clarification of whether an audit reflects all situations when a claim is not paid or denied by day 45. Two commenters requested clarification of the definition of an audit and recommended that the definition include "the review and processing of a clean claim, including the investigation and determination of any benefits under other health benefit plans or any limitations or exclusions under the health care plan or policy." A commenter wanted to modify the language to provide a traditional and common sense meaning to the term "audit."

AGENCY RESPONSE: The department will not consider changes in the definition of the "audit" due to a potential conflict with the requirements of §21.2803(e). In addition, the definition of "audit" was not subject to the proposal and cannot be considered as a part of the adoption order.

Comment: Two commenters requested that the audit provision be changed from 180 days to 120 days. Several other commenters recommended that the time be changed to 90 days. One commenter suggested that whatever time frame is required for the physician to submit a claim should be the same time for the payor to audit the claim so that the two are comparable. One commenter stated that 180 days to audit a claim is "ridiculous" and indicated that the provider should then get the same 180 days to research the audit results. One commenter "applauds" the 180 day time frame.

AGENCY RESPONSE: As stated in the introduction to the proposed rule, it is the department’s understanding that most claims requiring additional research are routinely resolved in substantially less time than 180 days, and that a very small percentage of claims require 180 days to resolve. The department identified a maximum 180 day time frame as an outside limit, which it believes will provide carriers sufficient time to complete an audit. The department anticipates carriers will complete audits and make additional payments or request refunds within a much shorter time frame than 180 days.

Comment: A commenter recommended clarifying that a carrier may seek a refund or offset of either or both the initial 85% and the remaining portion of an audited claim paid to the physician or provider if the carrier determines that the claim should have been denied.

AGENCY RESPONSE: The department agrees that clarification is needed to address the recoupment of audit payments after the audit period has ended. The department has added the following to §21.2809(e): "If a carrier determines that it does not have liability on a clean claim, the carrier may seek a refund through chargeback or other means, in accordance with subsection (b) of this section."

Comment: One commenter expressed concerns about differentiating between payment of the 85% of an audited claim and 100% of the contracted rate. The commenter suggested the rule mandate that an HMO or preferred provider carrier clearly identify on the Explanation of Benefits (EOB) when only 85% of the line item is being paid. Another commenter requested that the department consider addressing unclear language on EOBs. Several commenters requested that the words "at least" be inserted before the 85% because of difficulty with tracking partial payments and proposed language requiring health plans to identify partial payments and provide notice of an audit on the EOB.

AGENCY RESPONSE: The department disagrees, as the rule already addresses notification of audit payments. Section 21.2807(b) requires a carrier to notify a physician or provider in writing when a claim is being audited, either in whole or in part. The carrier may elect to furnish the physician or provider with written notice of its intent to audit the claim by way of the EOB. If the physician or provider wants more detailed information on the EOB regarding payments of claims, then the physician or provider can negotiate with the carrier to have that information included. The department is unaware of problems concerning unclear language on EOBs but will monitor any complaints filed with the department.

House Bill 610 requires an audit payment of 85% within the statutory claims payment period, but nothing prevents carriers from making a 100% payment on an audited claim.

Comment: A few commenters expressed concern that payors may "recoup" funds for up to two years after payments were made. Concern was expressed that this would prevent the provider from timely filing a new claim with the appropriate carrier. The commenters suggested adding recoupment requirements for payors, including limiting an insurer’s ability to request a refund to 180 days after payment; requiring insurers to pay any filed clean claim within 60 days of notification; forbidding a payor to decline to pay a claim if filed within 60 days; and requiring payors to give 30 days notice of a request for refund. A commenter expressed concerns that chargebacks are not a viable option in the individual policy market because providers may not provide services to enough insureds to accumulate an appropriate chargeback. Another commenter disagreed with allowing chargebacks and suggested that insurance companies should have to request refunds and wait for the provider to issue a check. Other commenters contend that chargebacks and recoupments are extremely burdensome, and requested that a provider first be allowed to make repayment in his/her chosen manner. The commenters also opposed a carrier’s ability to recoup without a prohibition on the chargeback "straying across" unrelated products and patients, and waiving by contract the otherwise required reporting requirements medical offices need for accounting purposes.

Two commenters expressed concern about continued audits after the 180th day. One commenter said that the burden should be on the HMO or preferred provider carrier to convince a physician or provider that a refund is due, and proposed language which would prohibit an HMO or preferred provider carrier from making a chargeback unless the physician or provider requested it. Another commenter proposed language that would prohibit an HMO or preferred provider carrier from seeking a refund more than one year after receiving information requested to resolve the claim. One commenter provided examples of difficulty in recovering audit payments from providers.

AGENCY RESPONSE: If a payor determines at some point that it did not have liability on a claim paid pursuant to the clean claims statutes or rules, then the payor is entitled to seek reimbursement of the claim. This recoupment may be done by chargeback or by some other means reached by agreement of the parties. House Bill 610 does not permit physicians or providers to keep audit payments if a determination is made that a carrier was not liable on a claim.

House Bill 610 anticipated that upon completion of the audit process, either an additional payment from the carrier or a refund would be due. Chargebacks are one of the means a carrier can utilize to obtain the refund, although they are not the only recourse available to recoup payments made to physicians and providers. Contracts between physicians or providers and carriers can identify the methods under which recoupment can occur. Also, the parties may reach a mutual agreement regarding recoupment procedures.

The 85% audit payment is not a claim payment and is required to be paid on the 45th day even though a carrier may eventually determine that it had no liability on the clean claim. In previous adoption orders on the clean claim rule, the department explained that the audit payment was not a claim payment but was a temporary shifting of the economic burden from the provider to the carrier while the claim investigation process is conducted. House Bill 610 does not require that a carrier convince the physician or provider that the audit payment should be returned. Rather, the statute requires the physician or provider to return the audit payment within 30 days after the physician or provider receives notice of the audit results or any appeal rights of the enrollee are exhausted. For the protection of its other enrollees, a carrier must have certainty that it can promptly recover audit payments made on clean claims for which it did not have liability, even if a determination is made after an extended period of time. The department disagrees that chargebacks should only be made if the physician or provider agrees to it. Section 21.2809(b) requires that if a carrier intends to make a chargeback, the written notification of the audit results shall also include a statement that the carrier will make a chargeback unless the physician or provider contacts the carrier to arrange for reimbursement through an alternative method. House Bill 610 does not require payment for services or treatments that are not covered. If a carrier determined that it did not have liability on a clean claim or part of a clean claim for which an audit payment had been made, the carrier can seek recoupment of those funds.

Comment: A commenter requested the 30 day refund period be increased to 45 days. The commenter stated that chargebacks/recoupments by payors create significant accounting problems for providers and should be avoided at all costs. The commenter would support a rule which requires providers to make refunds on undisputed overpayments within 45 calendar days of notification from the payor, with an interest penalty imposed upon providers who fail to make refunds. If chargebacks are to be allowed, the commenter suggested adding language stating that the carrier shall not initiate a chargeback if the provider has notified the carrier in writing, within the 45 calendar day refund period, that the provider disputes the accuracy of the refund request.

AGENCY RESPONSE: The department disagrees with the suggested change from a 30 day refund period to 45 days as the statute requires refunds within 30 days. The department directs the commenter to §21.2809(b) which addresses notification by the carrier of intent to make a chargeback and allows the provider to contact the carrier to arrange for reimbursement through an alternative method.

Comment: A commenter stated that some providers have attempted to bill enrollees for the 15% balance during the audit period, and suggested language which would prohibit this practice.

AGENCY RESPONSE: The rules governing HMOs (28 TAC §11.1102) require that HMO physician or provider contracts contain a provision stating that the physician or provider agree to look only to the HMO for payment for covered services except for stated copayments and deductibles. An effort to collect the 15% audit payment from an enrollee would be a violation of this contractual provision. In addition, the statute pertaining to preferred provider benefit plans (Article 3.70-3C, §3(k)) requires that the provider contract state that if the provider is compensated on a discount fee basis, the insured can only be billed on the discount fee and not the full charge. If a physician or provider bills and receives the 15% audit payment from the insured and subsequently receives the full discounted fee from the carrier, the physician or provider would be in violation of Article 3.70-3C §3(k). The department will monitor complaints for such activities and, if necessary, consider for future rulemaking.

Comment: Two commenters believe that the department is being urged to broadly interpret language in §21.2809 to include verification and utilization management issues. The commenter encouraged the department to look at the original intent and focus on how quickly a claim is paid.

AGENCY RESPONSE: The department is unclear as to what language in §21.2809 is at issue. Because House Bill 610 clearly requires that clean claims be acted on within the statutory time frames, it is reasonable to anticipate that after a reasonable period of time, the audit period would end. The rules identify an appropriate time frame for the termination of the audit period.

§21.2810

Comment: A commenter recommended clarifying that the proof of payment date includes a health plan or insurer’s own postage meter.

AGENCY RESPONSE: No change is necessary, nor was any proposed, because this was clarified in rule amendments which became effective on February 14, 2001. Private metered postmarks are an acceptable proof of postmark in those instances when the claims payment is delivered by the U.S. Postal Service.

§21.2815

Comment: Several commenters stated that the rule should identify several different penalties for late payments, including correlating the number of days a claim is late in being paid; increasing penalties; full billed charges plus a penalty; and a monthly fee.

AGENCY RESPONSE: The department recognizes the commenters’ concerns; however, House Bill 610 does not provide for "sliding scale" penalties to providers based on how overdue a claim payment is. House Bill 610 did provide for administrative penalties not to exceed $1000 per day for each day that a claim remains unpaid and in violation of the statute. The department recognizes some commenters believe that a similar type of provision should apply to physician or provider penalties, and it will study this issue in conjunction with comments regarding the imposition of the "greater of" billed charges or the contracted penalty rate.

Comment: Some commenters stated that the addition of the "greater of" language in the proposed rule exceeds the department’s statutory authority. Commenters provided recommended language or recommended deleting the "greater of" language. One commenter expressed concern over the uncertainty for health plans in the process of business planning and forecasting created by the greater of language. The commenter stated that a defined contracted penalty rate, such as an interest or multiplier penalty, helps forecast a "worst-case" scenario. One commenter supported the proposed language and indicated that billed charges were less difficult to calculate. A commenter also indicated that the proposed language could prompt unscrupulous individuals to artificially inflate their billed charges. Another commenter was also concerned that providers would delay providing certain types of information so that they would get billed charges. A commenter stated that the imposition of billed charge penalties on small group employer plans could "decimate" health plans. Some commenters expressed concerns about the cost to third party payors. A commenter remarked that it might impair the ability to contract with physicians. One commenter was concerned about the "punitive" nature of the rule change. One commenter also indicated that billed charges were "draconian" penalties. Another commenter indicated that billed charges as penalties are more appropriate in the realm of physician claims, but not provider claims, because there is a standard for usual and customary. Another commenter indicated that billed charges for hospital services are not subjective and are consistent along payor lines. Commenters suggested that it would be fairer to set a reasonable floor for a contracted penalty rate, rather than eliminate a plan’s ability to negotiate a penalty rate, and provided suggested language. Some commenters indicated that "flagrantly or persistently overcharging" is prohibited by the Texas Medical Practice Act. Some commenters supported the inclusion of the "greater of" and proposed that the section also apply to contracts which have a claim payment of less than 45 days.

AGENCY RESPONSE: The department acknowledges the many comments it received both for and against the inclusion of the "greater of" language, as well as the suggestions and recommendations. The proposal that carriers pay penalties of the "greater of" billed charges or the contracted penalty rate was described by some commenters as a "draconian penalty," while other commenters questioned the department's authority to interpret the bill in this manner. Although some commenters favored the "greater of" language, many commenters advocated for time-sensitive penalties that increased or compounded the longer a claim remained unpaid in addition to the billed charges. After careful consideration, the department has determined that more analysis is needed to assess the diverse comments and suggestions. The department will not adopt the "greater of" language from §21.2809 and will further study the best means to fully address the provisions of House Bill 610 with regard to penalties paid by carriers to physicians and providers for noncompliance.

Comment: Some commenters stated that the "zero tolerance" standard imposed by the rule establishes an unattainable performance standard, pointing out that the carrier has only one opportunity to process and pay each claim correctly. A commenter indicated that errors can occur from incorrectly loading fee schedules and retroactive contract loading. A commenter proposed a good faith, reasonable standard to make timely payments and to correct errors upon discovery. Some commenters also proposed language establishing an error rate threshold for pursuing penalties or sanctions against HMOs or preferred provider carriers. A commenter stated that the quality standard from the Health Care Financing Administration (HCFA) and National Committee for Quality Assurance (NCQA) is 95% substantial compliance. Another commenter indicated that with the high volume of claims processed, a limit of accuracy of rate paying could be used to determine compliance and proposed a 97% compliance rate. Commenters indicated that mistakes will happen and suggested that the cost of compliance will be transferred to the business community.

AGENCY RESPONSE: The department disagrees that an error rate threshold should be incorporated into the rule. House Bill 610 did not set a range for a compliance standard, but instead requires that claims be paid "in accordance with the contract." The statute does not allow accommodations for error in determining how claims are to be paid. The department recognizes the difficulty carriers may have in ensuring that clean claims are paid correctly and understands that human error may occur within the claims processing system. The department encourages carriers to institute checks and balances to identify and correct mistakes which could lead to inaccurate claims payments.

Comment: One commenter strongly supports requiring claims to be paid correctly and stated that last year it collected over $10 million on incorrectly paid claims. The commenter supports requiring payments for valid clean claims, and pointed out that over 50% of its denials were overturned. The commenter also stated that the payor’s risk of loss is not any greater than the provider’s risk of loss.

AGENCY RESPONSE: The department appreciates the commenter’s support.

Comment: A commenter is concerned that, an over payment as well as an under payment, would not be considered correctly paid and would subject the carrier to penalties. The commenter suggested that this policy be changed to reflect generally accepted and routine business practices between contracting parties. The commenter also suggested that the explanation of this amendment be clarified to reflect that if a carrier corrects an incorrect payment within the statutory period, then it would not be a violation. The commenter believes that a carrier should have whatever remaining days are left in the 45 day period to process any remaining amount due a provider.

AGENCY RESPONSE: House Bill 610 was enacted to address the problem of claims that were not paid in a timely manner. The department believes that the statute requires payment of the total amount of the claim in accordance with the contract to preclude carriers from attempting to circumvent the law by making partial or token payments on claims within 45 days. However, the department does not believe that the law seeks to penalize carriers who overpay claims within 45 days. If a carrier realizes that a claim was underpaid and pays the balance before the statutory claims payment period expires, the carrier has complied with the statute and rule.

Comment: A commenter recommended including a provision that if a provider is paid in 45 days but believes that the payment was not in accordance with the contract, the provider should notify the plan within 60 days and the plan should have 30 days to resolve the complaint. Another commenter recommended that if a claim is paid incorrectly and the provider determines that it was paid incorrectly, then the provider should notify the payor by filing a complaint with either the department or the payor. One commenter suggested that the payor have 30 days to review and adjust the bill if notified that an incorrect amount was paid. A commenter proposed that if a provider knowingly accepts an incorrect payment and does not promptly notify the HMO or preferred provider carrier, the HMO or preferred provider carrier should not have to pay the penalty. Another commenter suggested closing the claim if not notified in 90 days. Another commenter indicated that there should not be a financial incentive to avoid notifying the carrier of incorrect payment in order to maximize the number of claims subject to the penalty and suggested language to address notification of failure to pay correctly and the application of the statutory payment to incorrect payments was provided.

AGENCY RESPONSE: The department disagrees. The carrier is obligated to provide accurate payment on its clean claims. Failure to make a correct payment subjects the carrier to penalties, including a payment to the provider of billed charges or the contracted penalty rate. The incentive created is that of facilitating the payment of clean claims correctly, in accordance with the contract between the physician or provider and the carrier. The statute does not provide that physicians and providers will forfeit their rights to receive accurate payment if a claims payment error is not noted within a specified time. While the department agrees that a physician or provider should notify the carrier in a timely manner of an incorrect payment amount, the department does not believe it is necessary to incorporate this into the rule. The department will continue to review and monitor this situation.

Comment: A commenter was concerned that if the parties have contracted for a shorter payment period, then there would be no penalty for late payment. The commenter suggested language to address this. Another commenter asked what happens if a carrier does not pay within 45 days and does not pay the penalties that are supposed to be paid.

AGENCY RESPONSE: The department disagrees with the recommended language. Parties may contract to pay clean claims within a lesser period of time, and the contract may contain provisions for penalties to be paid after the shorter contracted period is not met. However, once a statutory violation has occurred, the rules and statutes outline a subsequent penalty. For example, two parties contract that payments are to be made in 30 days of receipt of a clean claim and failure to pay in 30 days results in an 18% penalty. From day 30 to day 45, the contract terms would govern the claim payment and penalties. On day 46, the carrier would be subject to statutory and regulatory penalties, including administrative penalties. A carrier who fails to act on a clean claim within 45 days has violated the statute and rule and is subject to statutory and regulatory penalties. If the carrier failed to pay the full amount of billed charges or the amount payable under the contracted penalty rate, then the carrier may be subjected to additional penalties. Physicians and providers may file a complaint with the department for assistance.

Comment: Two commenters stated that carriers wanted to use "usual and customary" (U&C) fees instead of full billed charges as the penalty for late payment and expressed concern about the methodology used to determine U&C. Another commenter stated that the provider’s billed charges can vary greatly and suggested that the provider establish a fee schedule.

AGENCY RESPONSE: The current rule defines billed charges as the charges made by a physician or provider who renders or furnishes services, treatments, or supplies so long as the charge is not in excess of the general level of charges made by other physicians or providers who render or furnish the same or similar services, treatment, or supplies to persons in the same geographical area and whose illness or injury is comparable in nature or severity. Methodologies have been developed and are in general use by carriers that do not utilize provider networks and are also used by plans that utilize provider networks to determine the usual and customary charges for non-contracting as well as contracting physicians and providers.

Comment: A commenter stated that additional clarification is needed to make sure that the definition of a clean claim includes claims that have not been challenged by the HMO or preferred provider carrier. The commenter recommended that if an HMO or preferred provider carrier does not provide timely notice to the medical provider that a claim is not clean by the 45th day, that claim will be deemed a clean claim for the purpose of the act.

AGENCY RESPONSE: The department disagrees. Physicians and providers are responsible for submitting clean claims. A claim deficiency may be such that critical information is omitted, is incorrect, or is sent to the wrong carrier or address. If a physician or provider submits a deficient claim, the carrier has up to 45 calendar days after receipt of the claim to notify the physician or provider in writing. Carriers who fail to provide timely notice of deficient claims may be subject to administrative penalties.

Comment: A few commenters expressed concern that HMO or preferred provider underwriters would utilize penalties in determining pricing for employers in their health plans. Commenters recommended that HMOs or preferred provider carriers not be allowed to include costs of noncompliance in calculating costs of the health benefit plans.

AGENCY RESPONSE: The department anticipates compliance with the statute and rules. It would not be appropriate for underwriters to utilize the anticipated costs of noncompliance with state law and rules in setting rates.

Comment: A commenter requested clarification on whether a carrier can deny a clean claim for reasons other than the claim is not clean.

AGENCY RESPONSE: A carrier can deny a clean claim if it is not liable for the claim.

Comment: A few commenters stated that "failure to pay a clean claim correctly or denial of a valid clean claim" exceeds express statutory authority. A few commenters suggested using the phrase "to pay a clean claim in accordance with the contract." One commenter recommended the phrase "to properly adjudicate." The commenter also stated that "denial of a valid clean claim" is vague and in opposition to the statute because a claim could be valid but denied because the services were not covered by the policy. Another commenter stated that the phrase "pay a clean claim correctly" is ambiguous given the variety of methods that physicians and payors use to resolve disagreements over what is owed. A commenter stated that a carrier failed to download a fee schedule in November and that failing to pay correctly can have a big impact on a solo medical practice. The commenter recommended retaining the current penalties. A commenter strongly supported significant penalties for failure to pay correctly and cited situations in which it took hundreds of hours of staff time to address incorrectly downloaded fee schedules. Another commenter stated that it is necessary for the rule to state that the payment should be correct and in compliance with the contract. The commenter expressed concerns about claims being paid correctly, according to the provider contract guidelines. A commenter suggested that if a plan pays in good faith but pays incorrectly due to human error, the amount of penalty should mirror the degree of error.

AGENCY RESPONSE: Claims which are paid "correctly" are claims which are paid "in accordance with the contract." The department recognizes that different interpretations may have been placed on the word "correctly" although the meaning was not intended to vary from the statutory language. To address and clarify this issue, the department has changed the language to: "Failure to pay the correct amount of a clean claim in accordance with the contract," and has changed "valid" clean claim to "clean claim for which payment should have been made…"

Comment: A commenter proposed language which would allow an HMO or preferred provider carrier to petition the commissioner for a waiver of the applicability of §21.2815 for a period not to exceed ninety days in the event the HMO or preferred provider carrier is converting or substantially modifying its claims processing systems.

AGENCY RESPONSE: The department disagrees with the requested change. The commissioner can exercise his regulatory discretion in assessing administrative penalties for failure to comply with §21.2815 and may take into consideration whether there are mitigating circumstances that contributed to the carrier’s violation of §21.2815. However, House Bill 610 does not give the commissioner the authority to waive the penalties that the statute requires to be paid to physicians and providers.

§21.2816

Comment: Two commenters expressed concern that the entire rule addresses only "submitted" claims, rather than clean claim submissions. One commenter expressed concern that providers will not understand that a claim must be clean before the payment or audit time frames start. The commenter suggested adding the word "clean" before the word "claim" in this section to clarify that clean claims trigger the 45 day payment period and proposed language. A commenter stated that House Bill 610 was meant to only deal with insurers that have a preferred provider program. The commenter is concerned that providers will misinterpret the rules to believe that every contracted provider who submits a claim will get paid and suggested that this be clarified.

AGENCY RESPONSE: The department disagrees with inserting the word "clean" in §21.2816. The department believes that it is important that the rules address when all claims are received because that date triggers the 45 day period in which a carrier must pay, deny, or audit a clean claim or give the physician or provider notice of a deficient claim. In order to ascertain when deficient claims are received by carriers, §21.2816 must apply to all claims.

Even though a physician or provider has a contract with a carrier, if the claim is for an enrollee covered under a self-funded ERISA plan; workers’ compensation; self-funded government, school and church health plans, including self-funded plans for Employees Retirement System of Texas, the Teacher Retirement System of Texas, the University of Texas and the Texas Association of School Boards; out-of-state insureds; Medicaid/Medicare; federal employee plans; and TRICARE Standard (CHAMPUS), then the prompt pay statutes and rules do not apply.

Comment: Some commenters stated that the proposed language will increase the administrative burden and costs for all parties. One commenter indicated that is was not clear from the rule whether there was liability on the part of the health plan when accepting a log filed by a physician or provider. The commenter stated that if the log is intended to be verification of liability for a claim, then the department understated the cost statement, and recommended deleting this provision. If the provision is not deleted, the commenter recommended clarifying that the log be used only as a means of confirming which and how many claims are included in a submission by a provider or physician and that the acceptance and review of the log does not confirm or guarantee member eligibility of a particular claim. A commenter suggested language encouraging physicians and providers to submit claims electronically or submit each mailed claim separately, one claim per mailing. Another commenter stated that filling out logs for each individual claim, mailing copies of each log on each claim and maintaining copies of each log generates a tremendous amount of unnecessary paper. A commenter stated that although not required, "if a provider sends it, the carriers should do something with it." The commenter also expressed concerns about incorrect information on the logs that would result in claims with easily remedied errors being returned. Several commenters expressed concerns about the maintenance and submission of claims mail logs and stated that they interpreted the rules as requiring the maintenance and submission of logs in "designated situations." Commenters also proposed eliminating the section.

Some commenters stated that the format of the claims log imposes a record-keeping requirement that is outside the formats available in most accounting systems and would result in a costly manual process. Some commenters recommended requiring carriers to provider fax numbers for log submissions. Commenters suggested that the patient billing record or internal bill date be accepted instead of the log. The commenters expressed concern that high volume providers would not be able to obtain the rebuttable presumption of mailing due to the amount of expense in complying with the process. The commenters indicated that payors would have to provide many operating fax machines to receive faxed logs. The commenter also expressed concerns about obtaining the payor’s fax number. The commenters stated that the log requires duplicate information already contained on the claim. Commenters recommended changing in §21.2816(a) the word "shall" to "may," proposed language deleting references to the mail log, and suggested that the provider retain a copy of the mailed claim printed or stamped with the word "mailed" followed by the mailing date. One commenter stated that a payor may have 20 to 30 addresses to send claims logs to and suggested that each carrier maintain a single address to receive claims and the "logbook."

AGENCY RESPONSE: The department disagrees that §21.2816 should be deleted. The claims mail log is optional. To the extent that a physician, provider, HMO or preferred provider carrier believes that use of a log would be expensive or time-consuming, it is not required to be used by any of those entities. Rather, the claims mail logs are only intended as a means of creating a rebuttable presumption of which and how many claims are included in either mailed or hand-delivered claim submissions, and are not verifications of liability. The department disagrees that the proposed rule’s cost note, which analyzed anticipated costs to carriers, was understated. The department encourages the electronic submission of claims, which would not necessitate the use of a claims mail log, but recognizes that for some providers or carriers, electronic transmission of claims is not the most efficient means to submit claims.

The department recognizes that creating and processing the claims mail log may generate expense and consume time for all parties involved. However, in order to provide a means to establish a rebuttable presumption that a mailed or hand-delivered claim was received, a procedure was established in the rule. For those physicians and providers who indicated that the claims mail log would create a tremendous burden, a resolution may be to either send claims by certified mail, return receipt requested, by fax (if acceptable to the carrier), or by electronic transmission. However, to accommodate the many concerns raised by physicians, providers and carriers, the department changed the section so that parties can agree by contract on the means to establish a rebuttable presumption of receipt of a claim.

The department recognizes the commenters’ concerns about the potential problems associated with facsimile transmissions of claims mail logs. It is the department’s intent that a mutually acceptable means of receiving claims mail logs, including electronic transmission, be reached between the parties involved. Therefore, the department has changed the rule to allow electronic, as well as faxed, submission of claims mail logs.

The department did not intend that only one claim would be entered on each log. The sample log as published in the proposed rule included only one line for entry of information in order to minimize the space required in the publication. Further, because the log is intended only as a means to establish a rebuttable presumption of claim receipt, errors on the mail log do not render the associated claim deficient.

In response to the comment that a carrier should do something with a log sent by a provider, the rule does not require either party to utilize the claims mail log. However, if a physician or provider wishes to establish a rebuttable presumption that a claim was sent by mail or hand delivered, the department has established a mechanism to do so. The claims mail log may also be used by the carrier to demonstrate that certain identified claims were not included in a mailing. A carrier may have some other mechanism to identify which claims are received from a particular physician or provider on any certain date. That information could be used, if necessary, to rebut the presumption that a claim was received.

§21.2816(b)

Comment: A commenter states that it is unclear whether the proposed methods of submission are required to be accepted by the HMO or preferred provider carrier. The commenter recommended the following language: "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 depending on the method of submission allowed by the health plan…" The commenter further recommended adding language that clarifies that claims may only be transmitted by facsimile if the health plan has opted to accept facsimile transmission. Commenters also suggested adding language that clarifies that a date-stamped cover sheet is not proof of facsimile transmission. The commenter suggested adding a subsection (h) to address appropriate methods of claims transmission as being defined in the contract between the HMO or preferred provider carrier and the physician or provider. Another commenter recommended a change in the rule that would require that a hand-delivered claim be delivered to a designated person/persons located at a specified address.

AGENCY RESPONSE: The department agrees in part and disagrees in part. Section 21.2816 outlines the means that may be utilized to submit claims from physicians and providers to carriers. The processing procedures for filing claims are addressed in §21.2811. Section 21.2811(a) provides that procedures for filing claims may be set out in contracts, manuals, other documents, or by any method mutually agreed upon by the contracting parties. As such, the department believes that §21.2811 applies to the procedures for filing claims, which would include mutually acceptable means of transmitting claims. The department agrees that additional clarification is necessary and changed the language to clarify the process.

The rule indicates that proof of fax or electronic transmission is necessary. A date-stamped cover sheet without an accompanying transmission acknowledgement would not be sufficient.

§21.2816(b)(1)

Comment: Two commenters stated that additional clarification is needed with regard to logs for submissions and resubmissions. A commenter indicated that some providers continue to refile claims before the 45 days have expired. The commenters recommended that physicians and providers be required to post information regarding payments received and place that information on resubmission forms (logs). The commenters also recommended that physicians and providers be required to submit completed logs with all information before the logs are accepted into the system.

AGENCY RESPONSE: The department disagrees. By providing a rebuttable presumption of when a claim has been received, the department believes that the need to resubmit duplicate claims will be eliminated, except when initiated by the carrier. The department will continue to monitor complaints regarding duplicate claims and resubmissions and may address in future department actions. In addition, to further clarify the format of the claims mail log, the department has changed §21.2816(g) as follows: "The claims mail log maintained by physicians and providers shall include the following…"

§21.2816(c)

Comment: Commenters indicated that a presumed claim delivery date of three days through the U.S. Postal Service is inappropriate and does not take into account Sundays and holidays and varying delivery dates. A commenter recommended deletion of the presumed delivery of mail rule. Two commenters included charts and graphs indicating how many days it takes for mail to be received. Commenters recommended varying days, including a three, five and seven business day requirement, or deleting the proposed language. A commenter suggested adding clarifying language concerning fax transmission and receipt. One commenter stated that according to its analysis, only 60% of claims were received within 3 days, with some as high as 31 days. Another commenter encouraged the department to continue the mail delivery standard. A commenter expressed concern about the use of the claims mail log and suggested that a claim be considered received three days after mailing, like the vast majority of businesses do. Two commenters questioned the department’s authority to establish a rebuttable presumption of when a claim was received. One commenter suggested that the presumption should apply to both carriers and providers.

AGENCY RESPONSE: While the department is aware that the U.S. Postal Service does not guarantee to deliver mail in any specified time frame, it also recognizes that the majority of mailed items do reach their intended destinations within reasonable time frames. Nevertheless, the department agrees to change the time for presumed receipt under §21.2816(c) to three business days.

One of the benefits of the claims mail log is to provide a means for carriers to identify those claims listed on the mail log that it has not received from the physician or provider. If the physician or provider faxed or electronically transmits a copy of the claims mail log to the carrier, the carrier is on notice for that claim. If claims do not arrive within a reasonable time frame following receipt of the claims mail log, the carrier can contact the physician or provider regarding the claims listed on the log. Carriers may establish some other processing means to identify claims which are not received. The department has authority under the statute to implement rules and to define a clean claim. The receipt of a clean claim has been a problematic area and the department believes it is appropriate to address this issue in the implementation of House Bill 610.

Comment: A few commenters also indicated that there is a concern of misdirected mail ranging from 5-17% per day, and requested clarification regarding misdirected mail. Another commenter stated that the U.S. Postal Service has an error rate of ½% on 200 billion pieces of mail and expressed concerns about late claims. A commenter stated that some claims get lost in the mail while others are illegible or incomplete, and expressed concern about paying 85% of the claim when that happens. A commenter complained that 25% of the claims they mail are lost and that electronic claims payment is not an option for their association.

AGENCY RESPONSE: While some claims do get lost in the mail, a carrier that monitors the mail logs received from physicians and providers will be able to identify those claims that have not been received. The commenter may consider filing claims by certified mail or by utilizing the claims mail log process set forth in §21.2816. The department understands the commenters’ concern and notes that a claim that is illegible or incomplete is not a clean claim; therefore, the statutory claims payment period would not begin to run.

§21.2816(d)

Comment: A commenter stated that health plans often do not generate confirmation of receipt of electronic claims but will issue rejections, and recommended the following: "If the HMO’s or preferred provider carrier’s clearinghouse does not provide a confirmation of receipt of the claim or a rejection of the claim within 24 hours of submission by the physician or provider…"

AGENCY RESPONSE: The department agrees and has changed §21.2816(d) to include the suggested language.

§21.2816(e)

Comment: Some commenters suggested clarifying that a faxed claim should be presumed received during normal business hours and recommended the following: "If a claim is faxed, the claim is presumed received on the date of the fax transmission acknowledgment within normal business hours of the HMO or preferred provider carrier. All claims received after normal business hours are presumed to be received the following business day." Another commenter suggested "after 5:00 p.m." One commenter suggested adding "to the correct fax number destination."

AGENCY RESPONSE: The department agrees clarification is needed and has added the following to §21.2816(e): "Claims faxed after the payor’s normal business hours are presumed received the following business day."

§21.2816(g), (h)

Comment: Two commenters indicated that the proposed rule did not include a stipulation that each log represents the claims of only one provider. The commenters recommended changing the language to include a resubmission log and certain information to be provided on that log. The commenters recommended that "provider identification number and address to which claims were sent" be included on the claims mail log.

AGENCY RESPONSE: The department disagrees that a resubmission log should be created. The department anticipates that the need for refiling claims will be diminished as a result of the enactment of these rules. The department strongly discourages the resubmission of claims before the statutory claims payment period.

One of the purposes of the log is to address situations in which multiple claims are included in one mailing or hand delivery to identify individual claims sent in a single mailing. If a single claim is mailed or hand-delivered, the log may be used to identify the claim included in the mailing or hand delivery. The claims mail log should contain only claim information for the entity, physician or provider to be paid. For example, a clinic with multiple physicians could submit a single log for claims, so long as the clinic is the payee.

The department agrees that the provider identification number and address to which claims were sent should be included on the claims mail log and has changed the rule and sample form accordingly.

§21.2817

Comment: One commenter stated that an attempt to impair the right of parties to contract, in the absence of specific statutory support, would exceed the authority of the department. Another commenter indicated that under Article 3.70-3C §3(m), a preferred provider carrier can contract to pay a claim after more than 45 days and said that prohibiting extensions of time in the contract is not part of the statute.

AGENCY RESPONSE: First, House Bill 610 was enacted subsequent to, and therefore supercedes, any conflicting language in Article 3.70-3C §3(m). Second, the department disagrees that this section of the rule impairs contractual rights or lacks statutory support. The department has consistently taken the position, as stated in response to comments in the original adoption order, that a carrier can contract to pay a claim in less than 45 days, but cannot by contract extend the statutory claims payment period. In addition, the statute on its face provides that claims shall be paid, denied, or audited "not later than" the 45th day after the claim is received, and also specifically authorizes a physician or provider to recover reasonable attorney’s fees in an action to recover payment, and parties had notice of these requirements as of September 1, 1999. Further, this part of the rule does not alter or affect the obligations of the contract.

Comment: One commenter expressed concern that contracts between providers and HMOs or preferred provider carriers will not allow for the complaint or appeal process to the department. The commenter suggested that §21.2817 include a provision prohibiting contractual terms which would prevent the provider from accessing the complaint or appeal process. The commenter expressed concern that managed care companies may use arbitration or mediation clauses to bypass state regulation and the department’s Provider Ombudsman. Another commenter stated that it is very important that contracts not allow payors to remove rights under the law. Several stated that plans have an "enormous" advantage in contractual negotiations and proposed adding to this section, "This title may not be waived or nullified by contract."

AGENCY RESPONSE: The department disagrees. Article 20A.12(a) specifically requires each HMO to implement and maintain a complaint system to provide reasonable procedures for the resolution of complaints initiated by enrollees or providers concerning health care services. Likewise, Article 3.70-3C §3(f) requires preferred provider plans to maintain the same type of complaint process. Contracts which contain clauses nullifying a provider’s ability to file a complaint and to appeal any decision made would be in violation of statute and agency rule. While carriers may include arbitration or mediation as a means of resolving disputes with medical providers, physicians or providers do not have to agree to those terms. The Provider Ombudsman is available to address issues regarding physician and provider concerns.

§21.2819

Comment: A commenter indicated that it was not clear whether previous notices which complied with the statutes and rules would need to be resubmitted, and provided suggested language.

AGENCY RESPONSE: The department disagrees that a change is necessary. The rule amendment relating to disclosure notices is merely a rewording to further clarify that attachments and additional clean claim elements cannot be required before the 60 day notice period ends. As such, current notices which comply with the statutes and rules will not need to be resubmitted.

Comment: Some commenters stated that an effective date of September 5, 2001 is not realistic and are concerned that the rules are "deemed final" without taking all public comments into consideration. Another commenter suggested that the rules would be adopted regardless of public comment. A commenter indicated that affected parties have already incurred expenses following the adoption of rules in May 2000 and February 2001. A commenter indicated that there will not be adequate time for a "smooth and compliant transition" to the new requirements. Commenters suggested an effective date of December 1, 2001. Three commenters suggested that the rule apply to claims filed on or after January 1, 2002 to allow health plans time to set up systems to track mail logs.

A commenter contends that the proposed effective date of September 5, 2001 conflicts with §2001.036, Govt. Code which provides that a rule takes effect 20 days after the date it is filed with the Secretary of State. For a rule to be effective immediately with an expedited effective date, an agency must make a finding of imminent peril to the public health, safety, or welfare, which the commenter does not believe is the case with these amendments.

AGENCY RESPONSE: The department disagrees. Comments were received throughout the comment period and each was given full consideration. The department values the input received and carefully reviewed each comment submitted for consideration. As noted in this order, the department changed parts of the proposed rule to address some of the questions, comments and concerns presented in the comments.

Regarding the effective date of the rule, the department agrees that the Administrative Procedure Act provides that, unless a later date is specified, a rule takes effect 20 days after it is filed with the Secretary of State, which in the case of this rule would be 20 days after the date of this order, which is September 12, 2001. Section 21.2819 provides, however, that the provisions contained in the current amendments apply to claims for services, treatments, or supplies which are rendered on or after the date of the order. The department declines to extend the rule’s effective date, or the date of services to which these amendments apply, for the following reasons. The provisions of House Bill 610 became effective on September 1, 1999. The initial set of rules which defined a clean claim and otherwise implemented the statute became effective May 23, 2000, and the first set of rule revisions became effective February 14, 2001. The current rules, which contain no major deviations from previous rules, but rather provide further refinement to the procedures for filing and paying clean claims, were proposed on August 3, 2001, following extensive discussions between the department and interested persons and entities, of the issues addressed in this rulemaking. While the department acknowledges some commenters’ concerns that adjustments may have to be made to accommodate some of the rule’s provisions, the department believes that this will not be critical to achieving the statute’s underlying purpose of properly filing and promptly paying claims, which has been in effect for more than two years. For example, while many commenters specifically complain of changes that would be entailed by the mail log provisions, the department has stressed throughout this order that this provision is not mandatory, and has added language to make clear that parties may agree on alternate provisions by contract, if they so desire. The department has specifically said, in response to another comment, that disclosures need not be resubmitted because of this rule. To the extent that the proposed provision requiring carriers to pay the greater of billed charges or contractual penalties may have required systems changes, that provision has been deleted. Other provisions of the rule have merely clarified existing requirements or have made compliance easier for the parties.

The rules contain reasonable, balanced procedures and are consistent with the requirements of the statute, to which carriers and medical providers have been subject since September 1, 1999. For this reason, the department believes that processes should already be in place to ensure that claims are paid correctly, and that the current rules would not make major changes to those processes.

Comment: A commenter expressed concerns about misleading providers and carriers to think that contracts executed prior to the applicability date will fall under the new rules. A commenter indicated its belief that the rules would apply to all provider contracts regardless of dates of service.

AGENCY RESPONSE: The department recognizes the commenter’s concerns. The department does not expect contracts executed prior to the applicability date to be renegotiated as a result of the new rules to the extent that the contracts are consistent with the requirements in the rule.

For: Fort Worth Heart and Vascular Institute, North Texas Perinatal Association, Pediatric Partners of Austin, P.A., Sleep Medicine Associates of Texas, P.A., Tenet Health System, Texas Children’s Hospital, Texas Oncology, P.A., and several individuals and physicians.

For, with changes: St. Luke’s Episcopal Hospital, Associated Pathologists of Texas, P.L.L.C., Austin Anesthesiology Group, L.L.P., Austin Cardiovascular Associates, Austin Internal Medicine Associates, L.L.P., Austin Radiological Association, Baylor Healthcare System, Bent Tree Family Physicians, Brown & Associates Medical Laboratories, L.L.P., Capitol Anesthesiology Association, Cardiothoracic and Vascular Surgeons, Community First Health Plans, COR Specialty Associates of North Texas, P.A., Dallas County Medical Society, Dallas Surgical Group, Endocrinology Associates of Houston, P.A., Family Medicine Associates of Texas, Genesis Physicians Group, Greater Houston Emergency Physicians, Harris County Medical Association, Heart of Texas Internal Medicine Associates, HealthSmart Preferred Care, Inc., Houston Eye Associates, M. D. Anderson Cancer Center, Medical and Surgical Clinic of Irving, P. A., Memorial Clinical Association, Northwest Diagnostic Clinic, Office of Public Insurance Counsel, Oncology Consultants, P.A., Patient-Physician Network Holding Co., Pediatric Orthopedic Associates of San Antonio, Pinnacle Anesthesia Consultants, Radiation Oncology Center, Scott & White Health Plan, South Texas Cardiothoracic & Vascular Surgical Associates, P.L.L.C., South Texas Medical Clinics, P.A., South Texas Radiology Group, St. Vincent Medical Foundation, Texas Cancer Care, Texas Ear, Nose & Throat Specialists, L.L.P., Texas Health Resources, Texas Hospital Association, Texas Medical Association, Texas Neuroradiology, P.A., Texas Podiatric Medical Association, Texas Primary Care Coalition, The Health Group, The Medical Clinic of North Texas, P.A., TIRR Systems, Walnut Hill Obstetrics & Gynecology Associates, and numerous individuals and physicians.

Against: Aetna, Alliance of American Insurers, Amcare Health Plans, Ascent Assurance, Inc., Blue Cross and Blue Shield of Texas, Center for Orthopaedic Specialties, Golden Rule, Heritage Health Systems & Health Insurance Association of America, Humana Health Plan of Texas, Inc., Humana Insurance Company and Employers Health Insurance Company, Sierra Health Services, Inc., Texas Association of Business & Chambers of Commerce, Texas Association of Health Plans, Texas Association of Life & Health Insurers, Texas Association of Life & Health Underwriters, Texas Association of Preferred Provider Organizations, Texas Professional Benefit Administrators Association, UniCare Life & Health Insurance Company, and United HealthCare of Texas and United HealthCare Insurance Company.

The amendments and new sections are adopted 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.

§21.2803. Elements of a Clean Claim.

(a) Required clean claim elements. A physician or provider submits a clean claim by providing the required data elements specified in subsection (b) of this section to an HMO or a preferred provider carrier, along with any attachments and additional elements, or revisions to data elements, attachments and additional elements, of which the physician or provider has been properly notified as necessary pursuant to subsections (c) and (d) of this section, and §§21.2804 of this title (relating to Disclosure of Necessary Attachments), 21.2805 of this title (relating to Disclosure of Additional Clean Claim Elements), and 21.2806 of this title (relating to Disclosure of Revision of Data Elements, Attachments, or Additional Clean Claim Elements), and any coordination of benefits or non-duplication of benefits information pursuant to subsection (e) of this section, if applicable.

(b) Required data elements. HCFA has developed claim forms which provide much of the information needed to process claims. Two of these forms, HCFA-1500 and UB-82/HCFA, and their successor forms, have been identified by Insurance Code Article 21.52C as required for the submission of certain claims. The terms used in paragraphs (1), (2) and (3) of this subsection are based upon the terms used by HCFA on successor forms HCFA-1500 (12-90) and UB-92 HCFA-1450 claim forms. The parenthetical information following each term is a reference to the applicable HCFA claim form, and the field number to which that term corresponds on the HCFA claim form.

(1) Essential data elements for physicians or noninstitutional providers. Unless otherwise agreed by contract, the data elements described in this paragraph are necessary for claims filed by physicians and noninstitutional providers.

(A) subscriber's/patient's plan ID number (HCFA 1500, field 1a);

(B) patient's name (HCFA 1500, field 2);

(C) patient's date of birth and gender (HCFA 1500, field 3);

(D) subscriber's name (HCFA 1500, field 4);

(E) patient's address (street or P.O. Box, city, zip) (HCFA 1500, field 5);

(F) patient's relationship to subscriber (HCFA 1500, field 6);

(G) subscriber's address (street or P.O. Box, city, zip) (HCFA 1500, field 7);

(H) whether patient's condition is related to employment, auto accident, or other accident (HCFA 1500, field 10);

(I) subscriber's policy number (HCFA 1500, field 11);

(J) subscriber's birth date and gender (HCFA 1500, field 11a);

(K) HMO or preferred provider carrier name (HCFA 1500, field 11c);

(L) disclosure of any other health benefit plans (HCFA 1500, field 11d);

(i) if respond "yes", then

(I) data elements specified in paragraph (3)(A)-(E) of this subsection are essential unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete the data elements in paragraph (3)(A)-(E) of this subsection;

(II) the data element specified in paragraph (3)(I) of this subsection is essential when submitting claims to secondary payor HMOs or preferred provider carriers;

(ii) if respond "no," the data elements specified in paragraph 3(A)-(E) of this subsection are not applicable and therefore are not considered essential if the physician or provider has on file a document signed within the past 12 months by the patient or authorized person stating that there is no other health care coverage; although the submission of the signed document is not an essential data element, a copy of the signed document shall be provided to the HMO or preferred provider carrier upon request.

(M) patient's or authorized person's signature or notation that the signature is on file with the physician or provider (HCFA 1500, field 12);

(N) subscriber's or authorized person's signature or notation that the signature is on file with the physician or provider (HCFA 1500, field 13);

(O) date of current illness, injury, or pregnancy (HCFA 1500, field 14);

(P) first date of previous same or similar illness (HCFA 1500, field 15);

(Q) diagnosis codes or nature of illness or injury (HCFA 1500, field 21);

(R) date(s) of service (HCFA 1500, field 24A);

(S) place of service codes (HCFA 1500, field 24B);

(T) type of service code (HCFA 1500, field 24C);

(U) procedure/modifier code (HCFA 1500, field 24D);

(V) diagnosis code by specific service (HCFA 1500, field 24E);

(W) charge for each listed service (HCFA 1500, field 24F);

(X) number of days or units (HCFA 1500, field 24G);

(Y) physician's or provider's federal tax ID number (HCFA 1500, field 25);

(Z) total charge (HCFA 1500, field 28);

(AA) signature of physician or provider or notation that the signature is on file with the HMO or preferred provider carrier (HCFA 1500, field 31);

(BB) name and address of facility where services rendered (if other than home or office) (HCFA 1500, field 32); and

(CC) physician's or provider's billing name and address (HCFA 1500, field 33).

(2) Essential data elements for institutional providers. Unless otherwise agreed by contract, the data elements described in this paragraph are necessary for claims filed by institutional providers.

(A) provider's name, address and telephone number (UB-92, field 1);

(B) patient control number (UB-92, field 3);

(C) type of bill code (UB-92, field 4);

(D) provider's federal tax ID number (UB-92, field 5);

(E) statement period (beginning and ending date of claim period) (UB-92, field 6);

(F) patient's name (UB-92, field 12);

(G) patient's address (UB-92, field 13);

(H) patient's date of birth (UB-92, field 14);

(I) patient's gender (UB-92, field 15);

(J) patient's marital status (UB-92, field 16);

(K) date of admission (UB-92, field 17);

(L) admission hour (UB-92, field 18);

(M) type of admission (e.g. emergency, urgent, elective, newborn) (UB-92, field 19);

(N) source of admission code (UB-92, field 20);

(O) patient-status-at-discharge code (UB-92, field 22);

(P) value code and amounts (UB-92, fields 39-41);

(Q) revenue code (UB-92, field 42);

(R) revenue description (UB-92, field 43);

(S) units of service (UB-92, field 46);

(T) total charge (UB-92, field 47);

(U) HMO or preferred provider carrier name (UB-92, field 50);

(V) subscriber's name (UB-92, field 58);

(W) patient's relationship to subscriber (UB-92, field 59);

(X) patient's/subscriber's certificate number, health claim number, ID number (UB-92, field 60);

(Y) principal diagnosis code (UB-92, field 67);

(Z) attending physician ID (UB-92, field 82);

(AA) signature of provider representative or notation that the signature is on file with the HMO or preferred provider carrier (UB-92, field 85); and

(BB) date bill submitted (UB-92, field 86).

(3) Data elements that are necessary, if applicable. Unless otherwise agreed by contract, the data elements contained in this paragraph are necessary for claims filed by physicians or providers if circumstances exist which render the data elements applicable to the specific claim being filed. The applicability of any given data element contained in this paragraph is determined by the situation from which the claim arose.

(A) other insured's or enrollee's name (HCFA 1500, field 9), is applicable if patient is covered by more than one health benefit plan, generally in situations described in subsection (e) of this section. If the essential data element specified in paragraph (1)(L) of this subsection, "disclosure of any other health benefit plans", is answered yes, this is applicable unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete this data element;

(B) other insured's or enrollee's policy/group number (HCFA 1500, field 9a), is applicable if patient is covered by more than one health benefit plan, generally in situations described in subsection (e) of this section. If the essential data element specified in paragraph (1)(L) of this subsection, "disclosure of any other health benefit plans," is answered yes, this is applicable unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete this data element;

(C) other insured's or enrollee's date of birth (HCFA 1500, field 9b), is applicable if patient is covered by more than one health benefit plan, generally in situations described in subsection (e) of this section. If the essential data element specified in paragraph (1)(L) of this subsection, "disclosure of any other health benefit plans," is answered yes, this is applicable unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete this data element;

(D) other insured's or enrollee's plan name (employer, school, etc.) (HCFA 1500, field 9c), is applicable if patient is covered by more than one health benefit plan, generally in situations described in subsection (e) of this section. If the essential data element specified in paragraph (1)(L) of this subsection, "disclosure of any other health benefit plans", is answered yes, this is applicable unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete this data element;

(E) other insured's or enrollee's HMO or insurer name (HCFA 1500, field 9d), is applicable if patient is covered by more than one health benefit plan, generally in situations described in subsection (e) of this section. If the essential data element specified in paragraph (1)(L) of this subsection, "disclosure of any other health benefit plans," is answered yes, this is applicable unless the physician or provider submits with the claim documented proof to the HMO or preferred provider carrier that the physician or provider has made a good faith but unsuccessful attempt to obtain from the enrollee or insured any of the information needed to complete this data element;

(F) subscriber's plan name (employer, school, etc.) (HCFA 1500, field 11b) is applicable if the health benefit plan is a group plan;

(G) prior authorization number (HCFA 1500, field 23), is applicable when prior authorization is required;

(H) whether assignment was accepted (HCFA 1500, field 27), is applicable when assignment under Medicare has been accepted;

(I) amount paid (HCFA 1500, field 29), is applicable if an amount has been paid to the physician or provider submitting the claim by the patient or subscriber, or on behalf of the patient or subscriber or by a primary plan in accordance with paragraph (1)(L) of this subsection and as required by subsection (e) of this section;

(J) balance due (HCFA 1500, field 30), is applicable if an amount has been paid to the physician or provider submitting the claim by the patient or subscriber, or on behalf of the patient or subscriber;

(K) covered days (UB-92, field 7), is applicable if Medicare is a primary or secondary payor;

(L) noncovered days (UB-92, field 8), is applicable if Medicare is a primary or secondary payor;

(M) coinsurance days (UB-92, field 9), is applicable if Medicare is a primary or secondary payor;

(N) lifetime reserve days (UB-92, field 10), is applicable if Medicare is a primary or secondary payor, and the patient was an inpatient;

(O) discharge hour (UB-92, field 21), is applicable if the patient was an inpatient, or was admitted for outpatient observation;

(P) condition codes (UB-92, fields 24-30), are applicable if the HCFA UB-92 manual contains a condition code appropriate to the patient's condition;

(Q) occurrence codes and dates (UB-92, fields 31-36), are applicable if the HCFA UB-92 manual contains an occurrence code appropriate to the patient's condition;

(R) occurrence span code, from and through dates (UB-92, field 36), is applicable if the HCFA UB-92 manual contains an occurrence span code appropriate to the patient's condition;

(S) HCPCS/Rates (UB-92, field 44), is applicable if Medicare is a primary or secondary payor;

(T) prior payments - payor and patient (UB-92, field 54), is applicable if payments have been made to the physician or provider by the patient or another payor or subscriber, on behalf of the patient or subscriber, or by a primary plan as required by subsection (e) of this section;

(U) diagnoses codes other than principle diagnosis code (UB-92, fields 68-75), is applicable if there are diagnoses other than the principle diagnosis;

(V) procedure coding methods used (UB-92, field 79), is applicable if the HCFA UB-92 manual indicates a procedural coding method appropriate to the patient's condition;

(W) principal procedure code (UB-92, field 80), is applicable if the patient has undergone an inpatient or outpatient surgical procedure; and

(X) other procedure codes (UB-92, field 81), is applicable as an extension of subparagraph (W) of this paragraph if additional surgical procedures were performed.

(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 either contained in or in the process of being incorporated into a patient’s medical or billing record maintained by the physician or provider. 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 either contained in or in the process of being incorporated into a patient’s medical or billing record maintained by the physician or provider.

(e) Coordination of benefits or non-duplication of benefits. If a claim is submitted for covered services or benefits in which coordination of benefits pursuant to §§3.3501 - 3.3511 of this title (relating to Group Coordination of Benefits) and §11.511(1) of this title (relating to Optional Provisions) is necessary, the amount paid as a covered claim by the primary plan is considered to be an essential element of a clean claim for purposes of the secondary plan's processing of the claim and HCFA 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(3)(I) and (T) of this section. If a claim is submitted for covered services or benefits in which non-duplication of benefits pursuant to §3.3053 of this title (relating to Non-duplication of Benefits Provision) is an issue, the amounts paid as a covered claim by all other valid coverage is considered to be an essential element of a clean claim and HCFA 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(3)(I) and (T) of this section. If a claim is submitted for covered services or benefits and the policy contains a variable deductible provision as set forth in §3.3074(a)(4) of this title (relating to Minimum Standards for Major Medical Expense Coverage) the amount paid as a covered claim by all other health insurance coverages, except for amounts paid by individually underwritten and issued hospital confinement indemnity, specified disease, or limited benefit plans of coverage, is considered to be an essential element of a clean claim and HCFA 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(3)(I) and (T) of this section.

(f) Format of elements. The required elements of a clean claim set forth in subsections (b), (c), (d) and (e), if applicable, of this section must be complete, legible and accurate.

(g) Additional data elements, attachments, or information. The submission of data elements, attachments, or information by a physician or provider with a claim in addition to those required for a clean claim under this section shall not render such claim deficient.

§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 HMO or preferred provider carrier may not require 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 with paragraphs (1), (2), or (3) of this section. 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 HMO or preferred provider carrier may not request 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 with paragraphs (1), (2), or (3) of this section. Claims filed during the 60 day period after receipt of the disclosure do not have to include the required additional clean claim element 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 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, 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) After receipt of a clean claim, prior to the expiration of the statutory claims payment period specified in §21.2802(25)(B) of this title (relating to Definitions), an HMO or preferred provider carrier shall:

(1) pay the total amount of the clean claim in accordance with the contract between the physician or provider and the HMO or preferred provider carrier;

(2) deny the clean claim in its entirety after a determination that the HMO or preferred provider carrier is not liable for the clean claim and notify the physician or provider in writing why the clean claim will not be paid;

(3) notify the physician or provider in writing that the entire clean claim will be audited and pay 85% of the contracted rate on the claim to the physician or provider; or

(4) pay the portion of the clean claim for which the HMO or preferred provider carrier acknowledges liability in accordance with the contract between the physician or provider and the HMO or preferred provider carrier, and:

(A) deny the remainder of the clean claim after a determination that the HMO or preferred provider carrier is not liable for the remainder of the clean claim and notify the physician or provider in writing why the remainder of the clean claim will not be paid; or

(B) notify the physician or provider in writing that the remainder of the clean claim will be audited and pay 85% of the contracted rate on the unpaid portion of the clean claim to the physician or provider.

(c) With regard to a clean claim for a prescription benefit subject to the statutory claims payment period specified in §21.2802(25)(C) of this title (relating to Definitions), an HMO or preferred provider carrier shall:

(1) after receipt of an electronically submitted clean claim for a prescription benefit that is electronically adjudicated and electronically paid pursuant to Insurance Code Article 3.70-3C, §3A(d) (Preferred Provider Benefit Plans) and Article 20A.18B(d), pay or deny the prescription benefit claim, in whole or in part, within 21 calendar days after the treatment is authorized; or

(2) after receipt of an electronically submitted clean claim for a prescription benefit that is electronically adjudicated and electronically paid pursuant to §21.2814 of this title (relating to Electronic Adjudication of Prescription Benefits) pay or deny the prescription benefit claim, in whole or in part, within 21 calendar days after the clean claim is electronically transmitted.

§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.

(b) 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 additional payment is due to the physician or provider, such 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. If a carrier determines that it does not have liability on a clean claim, the carrier may seek a refund through chargeback or other means, in accordance with subsection (b) of this section.

§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:

(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.

(c) Except for a disclosure of processing procedures that is contained in a physician or provider contract, a disclosure required by subsection (a) of this section shall comply with §21.2818 of this title (relating to Disclosure Formats).

§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 full amount of the billed charges submitted on the clean claim or 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 the correct amount on a clean claim in accordance with the contract or denial of a clean claim for which payment should have been made 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) A physician or provider and an HMO or preferred provider carrier may agree by contract to establish a procedure to create a rebuttable presumption regarding the date of claim receipt.

(b) If a physician or provider and HMO or preferred provider carrier do not by contract agree to a method for the establishment of a rebuttable presumption, then the procedures set forth in paragraphs (1)-(4) of this subsection and subsections (c)-(h) of this section shall be utilized if the physician or provider desires to establish a rebuttable presumption to demonstrate the date of claim receipt. 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 or electronically submit 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 or proof of electronic submission;

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

(3) if the HMO or preferred provider carrier accepts claims submission by fax, then 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.

(c) 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 business day after the date the claim is submitted and the faxed or electronically generated 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.

(d) 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 or a rejection 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.

(e) If a claim is faxed, the claim is presumed received on the date of the transmission acknowledgment. Claims faxed after the payor’s normal business hours are presumed received the following business day.

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

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

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

 

FIGURE 28 TAC 21.2816(h)

FIGURE 28 TAC 21.2816(h)

CLAIMS MAIL LOG

 

Name of Claimant: ___________________________________________

Claimant Address ___________________________________________

___________________________________________

Claimant Telephone: (____) ________________

Claimant Federal Tax ID # ______________________

Name of Addressee: ___________________________________________

Name of Carrier: ___________________________________________

Designated Address: ___________________________________________

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), excluding contracts, 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 12, 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 12, 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.


For more information contact:



 


Archived File - for Reference Use

This file is historical in nature. Links and contact information may be outdated and no longer valid.


Contact Information and Other Helpful Links

Translation by WorldLingo


Translation by WorldLingo