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You are here: Home . rules . 2003 . 0623d-059
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Subchapter T. Submission of Clean Claims

§§21.2801 ­ 21.2809, 21.2811 - 21.2819, 21.2821 ­ 21.2825

The Texas Department of Insurance (the Department) proposes amendments to §§21.2801-21.2803, 21.2807-21.2809, and 21.2811-2817, and new §§21.2804-21.2806, 21.2818, 21.2819 and 21.2821-21.2825 concerning the submission of clean claims to health maintenance organizations and insurers who issue preferred provider benefit plans (hereinafter collectively referred to as carriers). These proposed amendments and new sections are the result of the enactment of SB 418 during the 78 th Legislative Session. That legislation, among other things, amended Texas Insurance Code Art. 3.70-3C, concerning preferred provider benefit plans, and the HMO Act, Texas Insurance Code Chapter 843, to provide comprehensive changes to the procedures and requirements governing the processing and payment of clean claims submitted by physicians and providers.

SB 418 enhances the current statutory scheme governing prompt payment of medical and health care services in several respects. It specifies the formats which physicians and providers must use in order to file a clean claim and allows the commissioner of insurance to specify by rule the information that the forms must contain for both electronic claims (i.e., those that comply with the federal standards for electronic transactions (45 CFR Parts 160 and 162) adopted under the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), P.L. 104-191) and non-electronic claims (i.e., those that are not submitted pursuant to the federal standards for electronic transactions under HIPAA; these include paper claims which, until the October 16, 2003 HIPAA compliance date, may be submitted via e-mail or fax). It deletes the previous definition of clean claim as a completed claim as determined under department rules, as well as the provision that allows a change in clean claim elements upon 60 days notice. It imposes a deadline by which physicians and providers must submit claims, adds a 30-day claims processing deadline for electronic claims and a 180-day deadline for completion of audits, and requires audit payments to be 100% of the applicable contracted rate. It streamlines and standardizes the claims payment process by more strictly limiting the procedure by which a carrier may request additional information, and prescribes the procedures a carrier must follow in order to recover an overpayment. It imposes greater limitations on provisions that are negotiable by contract between physicians or providers and carriers. It establishes a new system of graduated penalties for late-paid clean claims, and allows carriers an opportunity, under certain circumstances, to rectify an underpayment, without penalty, absent timely notice by the physician or provider. In addition to all other penalties or remedies authorized by the Insurance Code, it also allows for administrative penalties against carriers that are noncompliant in processing more than two percent of clean claims. It specifies that the provisions of SB 418 relating to prompt payment and verification apply to a non-network physician or provider who provides emergency care or specialty or other care upon referral because the services are not reasonably available from a network provider.

SB 418 also contains new provisions regarding verification and preauthorization of medical or health care services and availability of coding guidelines through contracts with preferred provider carriers and HMOs. These provisions are addressed in proposed rules published elsewhere in this issue of the Texas Register . In addition, contemporaneously with these proposed amendments and new sections, the proposed repeal of existing §§21.2804-21.2806 and 21.2819-21.2820 is also published elsewhere in this issue of the Texas Register.

The purpose of these rules is to implement the provisions and the intent of SB 418 by ensuring that the clean claims filing and payment processes are streamlined, standardized, and efficient. In developing the rules the department has consulted with the Clean Claims Working Group (CCWG), a group originally established by the department in 2001 and comprised of representatives of carriers, physicians, providers, and trade associations, and open in attendance to all other interested persons. The department has held three meetings with the CCWG in May and June of 2003 to discuss implementation of the new requirements. In addition, SB 418 requires the commissioner to appoint a Technical Advisory Committee on Claims Processing to, among other things, advise the commissioner on technical aspects of coding of health care services and claims development, submission, processing, adjudication, and payment. The bill also requires the commissioner to consult with the advisory committee prior to adopting any rules. The majority of the members of the CCWG have been appointed to the Technical Advisory Committee, which held its first meeting on June 18 th.

The proposed amendments to §21.2801 provide that Subchapter T, in addition to applying to claims submitted by contracted physicians and providers, has limited applicability to noncontracted physicians and providers. Proposed amendments to §21.2802 amend definitions of certain terms including audit, diagnosis code, procedure code, and statutory claims payment period. The proposed amendments re-define the term "clean claim" with regard to both non-electronic and electronic claims. They also add definitions for terms such as catastrophic event, corrected claim, duplicate claim, preferred provider, and provider.

Proposed amendments to §21.2803 specify the elements of a clean claim for non-electronic claims and for electronic claims, which are those that comply with regulations of the U.S. Department of Health and Human Services which implement HIPAA and adopt standard transactions and data elements for the electronic exchange of information. For non-electronic claims, the proposed amendments list the required data elements with reference to the appropriate fields on the claim forms prescribed by the Center for Medicare and Medicaid Services for both institutional and noninstitutional or physician providers (UB-92 and CMS-1500, respectively). The proposed amendments state that a physician or provider submits an electronic clean claim by using the ASC X12N 837 format that complies with all applicable federal laws related to electronic healthcare claims, including applicable implementation guides, companion guides, and trading partner agreements. The amendments also provide that if a physician or provider submits an electronic clean claim that requires coordination of benefits, the carrier processing the claim as a secondary payor shall rely on the primary payor information submitted on the claim, and that primary payor information may be submitted electronically to the secondary payor in compliance with applicable federal law, including applicable implementation guides, companion guides, and trading partner agreements.

The department is considering whether to include, as a new element of a clean claim, a notation on the applicable claim form identifying whether the claim is a result of services for which a verification was issued. The department solicits comments regarding the feasibility of adding such an element, and if so, the location of the element on the claim forms identified in the subchapter and the content of the data to be included for the element.

Proposed §21.2804 details the procedures by which a carrier, upon receipt of a clean claim, may request additional information from a treating preferred provider, including the timeframes for making a request, and paying, denying, or auditing a claim. It also provides that the period for determining whether a clean claim is payable is tolled, and does not resume, pending receipt of the additional information or a response indicating that the preferred provider does not possess the requested information. It states that the carrier shall require the preferred provider to either attach a copy of the request to its response, or provide certain identifying information, and says that if a request was submitted electronically in accordance with federal requirements, the response must also be submitted in accordance with those requirements. Proposed §21.2805 contains the procedures by which a carrier may request additional information from a source other than the preferred provider who submitted the claim, and provides that the applicable 21- (for pharmacy claims), 30- (for electronic claims) or 45-day (for non-electronic claims) statutory claims payment period is not extended pending receipt of the information. It states that the carrier shall request that the responding entity attach a copy of the request to the response, and contains the same federal electronic request and response requirements of proposed §21.2804, if applicable. It also provides that if, upon receipt of information, the carrier determines that there was an error in payment of a claim, the carrier may recover any overpayment pursuant to the provisions of this rule.

Proposed §21.2806 lists the methods by which a claim may be transmitted and requires a physician or provider to submit a claim no later than the 95 th day after the medical or health care services were rendered, or forfeit the right to payment unless the failure to timely submit was the result of a catastrophic event. However, the parties may agree by contract to extend the period for submitting a claim. For a claim for which coordination of benefits applies, the 95-day period does not begin for submission of the claim to the secondary payor until the physician or provider receives notice of the payment or denial from the primary payor. For a claim submitted by an institutional provider, the 95-day period begins on the date of discharge. A carrier shall accept as proof of timely filing a claim filed in compliance with this subsection or information from another carrier showing that the physician or provider submitted the claim to the carrier in compliance with this subsection. The proposal also says that a duplicate claim may not be submitted prior to the applicable 21-, 30- or 45-day claims payment period, and a carrier that receives a duplicate claim within that time is not subject to penalties on the duplicate claim.

Proposed amendments to §21.2807 contain changes to ensure consistency with the requirements of SB 418, including provisions relating to the adjudication of pharmacy claims. Proposed amendments to §§21.2808, 21.2811-.2812, 21.2814, and 21.2817 are also made for consistency. Proposed amendments to §21.2809 provide that a carrier that intends to audit a clean claim must, within the applicable claims payment period, notify the preferred provider clearly and prominently on the explanation of payment that the claim is being audited and pay 100% of the applicable contracted rate. A carrier that fails to notify and pay 100% within the claims payment period­or, if applicable, the extended period allowed by proposed §21.2804­may not use the audit procedures. A preferred provider that receives less than 100% of the applicable contracted rate has received an underpayment and must so notify the carrier within 180 days in accordance with proposed §21.2815(c) in order to receive a penalty. If a physician or provider fails to timely provide additional information requested by the carrier during the audit, the carrier may recover the amount paid pursuant to the procedures contained in the statute. Prior to seeking a refund for an audit payment a carrier must give the physician or provider an opportunity to appeal pursuant to proposed §21.2818 (relating to overpayments).

Proposed amendments to §21.2813 provide that all statutory and regulatory requirements applicable to a carrier also apply to contracted entities that process or pay claims, obtain the services of physicians or providers, or issue verifications or preauthorizations. Proposed amendments to §21.2815 set out the new graduated penalty requirements applicable to carriers that do not pay a preferred provider´s clean claim within the applicable 21-, 30- or 45-day claims payment period, including the method for calculating the penalty on the unpaid balance of a partially paid claim. The proposed amendments also clarify statutory language by stating that the penalty for a claim paid later than 90 days after the expiration of the statutory claims payment period includes 18% interest on the penalty amount. The amendments also provide that a carrier is not liable for a penalty if the failure to pay the claim timely was a result of a catastrophic event, or if the preferred provider notifies the carrier of an underpaid claim after the 180 th day after the underpayment was received and the carrier pays the balance on or before the 45 th day after the notice. The proposed amendments require a carrier to clearly and prominently indicate on the explanation of payment the amount of the contracted rate paid and the amount paid as a penalty.

Proposed amendments to §21.2816 expand the current provisions concerning date of receipt to include any written communication, including a claim, referenced under Subchapter T. The proposal also allows any entity submitting a communication to choose to maintain a mail log that identifies each separate claim, request, or response in a batch in order to provide proof of submission and establish date of receipt, and says that a copy of the mail log, if used, shall be transmitted to the receiving entity.

Proposed new §21.2818 establishes a procedure by which a carrier can recover a refund due to overpayment or completion of audit, including deadlines and notice requirements for refund requests and for recovery. It requires the carrier to give the physician or provider notice, not later than 180 days after receipt of the overpayment, or upon completion of audit, of the specific claims and amounts overpaid and reasons therefore. The notice must also include notification of appeal rights and describe the methods by which the carrier intends to recover. The proposed new section gives a physician or provider 45 days to appeal a request for refund, and says that upon receipt of such written appeal the carrier must begin the appeal process provided in the carrier´s contract with the provider. It provides that a carrier may not recover a refund until the later of the 45 th or 30 th day after notification (for overpayments and audits, respectively) or exhaustion of appeal rights, if the provider has not made arrangements for payment. It also provides that a secondary payor that pays a portion of a claim that should have been paid by the primary payor may only recover the overpayment from the carrier responsible for that amount, unless the overpaid portion was paid by both payors, in which case the secondary may recover from the physician or provider.

Proposed new §21.2819 requires physicians, providers and carriers to notify the department within five days if, due to a catastrophic event, they are unable to meet the statutory deadlines for claims filing or claims payment. The proposed section also requires an entity, within ten days after returning to normal operations, to certify to the department, by sworn affidavit, the specific nature and dates of the catastrophic event and the length of time the event caused an interruption in activity, and provides that a valid certification tolls the applicable statutory deadlines for the number of days the entity certifies that activity was interrupted.

Proposed new §21.2821 requires quarterly reporting by HMOs and preferred provider carriers of information and data regarding claims processing and payment and business interruption data due to catastrophic events, with the first report due on February 15, 2004, for the preceding months of September through December. This information, much of which is currently being collected by the department upon request, is necessary to assist the Technical Advisory Committee in gathering information for the biennial report to the legislature required by SB 418. It is also necessary in order to provide data to determine compliance with SB 418´s additional penalty provisions for carriers that fail to comply with the claims payment requirements for more than two percent of clean claims. Because of the new verification provision of SB 418, the department will also need to obtain data concerning verifications and declinations in order to monitor how this provision is working. The proposal requires reporting of verification and declination data to be done annually, on or before July 31 st. Because the final disposition of claims associated with verifications and declinations may take several months (due to the 95-day claims filing deadline and the applicable statutory claims payment periods), the department has required the reporting of this information to be on an annual rather than quarterly basis. Consistent with the quarterly reporting requirements regarding claims payment, proposed §21.2822, concerning administrative penalties, states that a carrier´s compliance percentage shall be determined on a quarterly basis, separately for provider claims and institutional claims, and not including claims paid pursuant to audit.

Proposed new §21.2823 states that proposed §§19.1724 (relating to verification) and 21.2807 apply to a physician or provider that provides emergency services or specialty or referral services not reasonably available in the carrier´s network. Proposed new §21.2824 contains a proposed effective date of September 4, 2003 for contracts between carriers and physicians and providers as well as for certain physicians and providers that do not have a contract with an HMO or preferred provider carrier. This date is based on the department´s estimates of the amount of time necessary for finalizing the rule, and are subject to change based on the timing of the adoption process. In addition, because the Technical Advisory Committee has discussed a later effective date, the department solicits comments concerning alternative effective dates for all or parts of the rule. Proposed §21.2825 contains a severability provision, and has been renumbered to accommodate the rule´s new proposed sections.

SB 418 authorizes the commissioner to use the procedures under Section 2001.034, Government Code, to adopt rules as necessary to implement the Act. While SB 418 requires the commissioner to adopt such rules no later than 90 days after the Act's effective date, the substantive provisions of the statute begin to apply to regulated entities 60 days after the effective date. If necessary to promote consistency of implementation, staff may recommend to the commissioner to adopt these rules, in a separate proceeding, on an emergency basis for the period beginning 60 days after the effective date of SB 418, June 17, 2003 , and ending with the effective date of this adopted proposal.

As previously noted, the department is soliciting comments regarding the inclusion of a new clean claim element related to the issuance of a verification. The department is also soliciting comments regarding the rule´s effect on the processing of dental and prescription benefit claims, including the necessity of any clarifications that will allow the rule to more accurately reflect the practical realities of processing dental and prescription benefit claims.

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

The Department will consider the adoption of the proposed amendments to §§21.2801 - 21.2803, and 21.2807 ­ 21.2817, and new §§21.2804 ­ 21.2806, 21.2818, 21.2819 and 21.2821 ­ 21.2825 concerning submission of clean claims by physicians and providers to HMOs and preferred provider carriers in a public hearing under Docket No. 2556 scheduled for August 7, 2003, at 9:30 a.m. in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin , Texas.

Ms. Stokes has determined that for each year of the first five years the sections are in effect, the public benefits anticipated as a result of the proposed sections will be a clearer, more streamlined, and more standardized claims filing and payment process that will reduce payment disputes and result in greater efficiencies that will ultimately benefit the insured or enrollee. Except as provided below, any cost to persons required to comply with these sections for each year of the first five years the proposed sections will be in effect is the result of the enactment of SB 418 and not the result of the adoption, enforcement, or administration of the sections. Because SB 418 amends prompt pay laws that have been in effect since 1999, and because many of these proposed sections amend rules that were originally adopted in 2000, some of the requirements of this proposal may involve practices or procedures of a provider or carrier that are currently in use and thus would allow a carrier to make use of existing procedures.

The probable economic cost to persons required to comply with the sections is as follows. As specified by SB 418, the proposed rule sets out the required data elements for a non-electronic clean claim. Many of the data elements are the same as required under the prior rule, although the proposal changes other required data fields by modifying field 14 to require information regarding only a date of injury due to an accident, and eliminates field 15 (date of previous same or similar illness). The department anticipates that changes to the data elements will require some systems changes on the part of those physicians and providers that process their own claims. According to 2002 data from the U.S. Bureau of Labor Statistics Occupational Employment Statistics Survey, as reported by the Texas Workforce Commission, the mean hourly rate for a computer programmer in the health services industry is $28.45. The amount of time necessary to re-program a provider´s billing system would vary depending upon each physician or provider or group´s particular needs. However, SB 418´s intent that the commissioner by rule specify the information that must be entered in order for a claim to be clean ­ i.e., that clean claim requirements be standardized and that carriers´ ability to contract for additional elements or attachments be eliminated ­ should, following initial re-programming, make the claims filing process less burdensome administratively and less expensive for physicians and providers. Prior to SB 418 and the proposed rule, a physician or provider that contracted with multiple carriers was subject to a wide degree of billing requirements depending on each patient´s carrier, which created administrative costs and burdens. Physicians and providers will now no longer be subject to different clean claim requirements depending on the carrier. Therefore, the department anticipates that any short-term startup costs in implementing the requirements of the proposed rule would in the long ru n be offset by greater efficiencies in the system.

Likewise, the department also anticipates that changes to the clean data elements will require some system changes for carriers. According to 2002 data from the U.S. Bureau of Labor Statistics Occupational Employment Statistics Survey, as reported by the Texas Workforce Commission, the mean hourly rate for a computer programmer in the insurance industry is $31.27. The amount of time necessary to implement system changes will vary greatly based on the size of the carrier, the complexity of the carrier´s claims payment system, the carrier´s currently required clean claim elements, and the type of plans offered by the carrier.

SB 418 also requires the commissioner to adopt rules under which a carrier can easily identify information submitted by a physician or provider. The proposed rule says a carrier must require a preferred provider responding to a request for additional information to attach a copy of the request to the provider´s response or include basic information that identifies the request. It also says that a provider who does not have the requested information must submit a written response to this effect. Because SB 418 provides that the applicable claims payment period is tolled pending receipt of a provider´s response, these provisions are intended to expedite claims processing and payment. In submitting a written "no information" response, a preferred provider may use basic, standard language that identifies the request; this should require minimal additional effort that is absorbed within the provider´s normal business operations. Requiring a provider to alternatively attach a copy of the request to any response may also be absorbed within current procedures. Because the prior rule allowed carriers to make unlimited additional information requests, many providers likely already have procedures in place to match requests with responses. The statute requires that response to a carrier´s request be sent, so there should be no additional cost to providers in attaching a copy of the request or including basic information that enables a carrier to match the response with the request.

The mail log provisions are optional to both carriers and physicians and providers and thus do not impose an additional cost to either party. In addition, the suggested mail log format, and the procedures for using the log, are substantially the same as those contained in the prior rule; thus, many preferred providers already have these procedures in place for transmitting claims. Likewise, the requirement that a carrier´s notice of an overpayment describe the methods by which the carrier intends to recover a refund should be consistent with current regulatory requirements, as current rules on disclosure of claims payment processes and procedures (28 TAC §§3.3703 and 11.901) require carriers to furnish information on their recoupment policy, and because SB 418 requires a written notice of claims, amounts overpaid, and the basis and specific reason for the refund request.

The proposal requires that an entity notify the department within five days of a catastrophic event and, within ten days after returning to normal operations, to certify to the existence of a catastrophic event. Because the definition of catastrophic event assumes an extraordinary, infrequent occurrence, the department believes that preparing an affidavit and providing notice can be absorbed within an entity´s normal business operations and should not cause any additional cost.

The proposed reporting requirements will result in additional costs to carriers. The costs will include administrative expenses as well as computer system enhancements. In estimating the total amount of these costs, the department has consulted with representatives of the industry, including small and large carriers. Because both SB 418 and this rule will require these additional costs, it is difficult to identify those costs that are strictly associated with the rule. In addition, costs for carriers will vary based upon the particular carrier´s method for processing claims, current computer system and types of plans offered by the carrier. Despite these variances, all carriers will be required to incur initial costs to make certain changes to computer systems.

The reporting requirements that relate to receipt and payment of claims are required by SB 418, which states that a carrier that violates the claims payment and audit provisions in processing more than two percent of clean claims is subject to an administrative penalty, and which requires the department to compute a compliance percentage for physician/provider and institutional provider claims. The requirement that carriers report the number of certifications of catastrophic events and number of days of business interruption should be accomplished using existing resources, since, as stated above, these events are expected to be rare. Based on discussions with representatives of the industry, including members of the Technical Advisory Committee, the department estimates that the requirement that carriers capture and report data concerning verifications, declinations and the disposition of associated claims will result in additional costs of $200,000 to $1 million for both small and large carriers. The range of expected costs results from a degree of uncertainty regarding the number of verification requests received by carriers. Because of this, carriers may initially decide to manually track and report this information until the frequency of verification requests justifies an automated process. Additionally, the interrelated nature of the data reporting requirements, including those required by the statute, may make it impossible for some carriers to separate costs attributable solely to the requirements of the proposed rule. Additional factors that will affect a carrier´s ultimate costs incurred include the complexity of the carrier´s claims processing system and whether the carrier is an HMO or an insurer offering a preferred provider benefit plan.

Ms. Stokes has determined that the costs of compliance with those parts of the proposed sections that are not mandated by SB 418 for carriers, physicians and providers that qualify as small or micro businesses pursuant to Texas Government Code §2006.001 are as follows. As noted earlier, carriers, physicians and providers will experience some additional startup costs with regard to changes in the data elements for non-electronic clean claims, which the department estimated based on the mean hourly rate of computer programmers for the health care and insurance industries; this rate should be the same regardless of whether the entity is a small, micro or large business. In addition, it would be neither legal nor feasible to exempt small or micro businesses from this part of the proposed rule, or to establish separate compliance standards, as to do so would contravene one of the basic purposes of SB 418, which is to standardize claims payment processes for carriers and providers. As the cost note makes clear, any additional expense to physicians or providers, whether small, micro, or large businesses, will be more than offset in the long run by the greater efficiencies of using a single, standard claim form. Also as noted herein, there will be additional costs to carriers associated with the proposed rule´s provisions concerning capturing and reporting of data concerning verifications, declinations, and associated claims disposition, which is impossible to predict and quantify with certainty due to the newness of the verification process; the lack of knowledge concerning probable frequency of verification requests; the interrelatedness of systems and other changes that are required by SB 418 and not these proposed sections; and the types of carriers and claims processing systems. Because some carriers may initially track this data manually, the department estimates that they would use a database administrator that, according to 2002 data from the U.S. Bureau of Labor Statistics Occupational Employmen t S tatistics Survey, as reported by the Texas Workforce Commission, will be paid a mean hourly rate of $30.41 per hour, which would not vary depending upon the size of the carrier but rather the number of verification requests which are received. Because no carrier, whether small, micro, or large, has any existing experience with the verification process, it could be assumed that smaller carriers would have fewer enrollees or insureds and thus would receive fewer requests for verification to track; however, whether and to what extent physicians and providers utilize the verification process for any carrier is not within that carrier´s control and is not necessarily dependent upon the size of the carrier. The department also believes that it is neither legal nor feasible to waive or establish separate reporting requirements for carriers that are small or micro businesses. SB 418 requires the Technical Advisory Committee to advises the commissioner on, among other things, the technical aspects of claims development, submission, processing, adjudication, and payment, as well as the impact of those processes on the contractual relationships between carriers and preferred providers. It also requires the committee to issue a report to the legislature on or before September 1 of each even-numbered year. Exempting small or micro-business carriers from some or all of the reporting requirements would thus compromise the data to be evaluated by the committee in advising the commissioner and issuing its report, which would not be consistent with the intent of SB 418.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on August 4, 2003 to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Kimberly Stokes, Senior Associate Commissioner, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.

The amendments and new sections are proposed under the Insurance Code Article 3.70-3C and §§36.001, 843.336, 843.337, 843.338, 843.3385, 843.339, 843.340, 843.3405, 843.341, 843.342, 843.343, 843.344, 843.345, 843.346, and 843.347 - 843.353. Article 3.70-3C provides a mechanism for the prompt and efficient resolution of claims by preferred provider carriers and provides that the commissioner may adopt rules to implement the article as it relates to the prompt payment of claims. Sections 843.336, 843.337, 843.338, 843.3385, 843.339, 843.340, 843.3405, 843.341, 843.342, 843.343, 843.344, and 843.347 - 843.353 collectively provide a mechanism for the prompt and efficient resolution of claims by HMOs and provides that the commissioner may adopt rules to implement the article as it relates to the prompt payment of claims. Section 36.001 of the Insurance Code provides that the Commissioner of Insurance may adopt rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance.

The following sections are affected by this proposal: Insurance Code Article 3.70-3C, §§843.336, 843.337, 843.338, 843.3385, 843.339, 843.340,843.3405, 843.341, 843.342, 843.343, 843.344, 843.345, 843.346, and 843.347 - 843.353.

§21.2801. Scope [and Applicability ]. The purpose of this subchapter is to specify the definitions and procedures necessary to implement Article 3.70-3C (Preferred Provider Benefit Plans) and Chapter 843 of the Insurance Code relating to clean claims and prompt payment of physician and provider claims. This subchapter applies to all non-electronic [paper] and electronic claims submitted by contracted physicians or providers for services or benefits provided to insureds of preferred provider carriers and enrollees of health maintenance organizations. The subchapter also has limited applicability to noncontracted physicians and providers. [The purpose of this subchapter is to specify the definitions and procedures necessary to implement Article 3.70-3C (Preferred Provider Benefit Plans) and Chapter 20A of the Insurance Code relating to clean claims and prompt payment of physician and provider claims.]

§21.2802. Definitions. The following words and terms when used in this subchapter shall have the following meanings:

(1) Audit -- A procedure authorized and described in §21.2809 of this title (relating to Audit Procedures) under which an HMO or preferred provider carrier may investigate a claim beyond the statutory claims payment period without incurring penalties under §21.2815 of this title (relating to Failure to Meet the Statutory Claims Payment Period) [An instance in which an HMO acknowledges coverage of an enrollee under the health care plan or a preferred provider carrier acknowledges coverage of an insured under the health insurance policy but exceeds the statutory claims payment period while processing a clean claim or a portion of a clean claim].

(2) Billed charges -- The charges made by a physician or provider who renders or furnishes services, treatments, or supplies provided 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, treatments, or supplies to persons in the same geographical area [and] whose illness or injury is comparable in nature or severity. In the event of a case rate agreed to between the physician or provider and the HMO or preferred provider carrier, billed charges shall be considered the higher of the case rate or billed charges.

(3) CMS -- The Center for Medicare and Medicaid Services of the U.S. Department of Health and Human Services. [Case rate -- A method of compensation in which a physician or provider receives one negotiated payment for all care rendered for a particular procedure or a specific diagnosis.]

(4) Catastrophic Event -- An event, including a acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquake, windstorm, flood or organized labor stoppages, that cannot reasonably be controlled or avoided and that causes an interruption in the claims submission or processing activities of an entity for more than two consecutive business days.

(5) [(4)]Clean claim --

(A) For non-electronic claims, a [A] claim submitted by a physician or provider for medical care or health care services rendered to an enrollee under a health care plan or to an insured under a health insurance policy that includes[with documentation reasonably necessary for the HMO or preferred provider carrier to process the claim, which contains]:

(i) [(A)] the required data elements set forth in §21.2803(b) of this title (relating to Elements of a Clean Claim); and

[(B)the attachments of which the physician or provider has been properly notified as necessary for processing pursuant to §§21.2803(c) of this title (relating to Elements of a Clean Claim) and 21.2804 of this title (relating to Disclosure of Necessary Attachments);]

[(C) any additional elements of which the physician or provider has been properly notified pursuant to §§21.2803(d) of this title (relating to Elements of a Clean Claim) and 21.2805 of this title (relating to Disclosure of Additional Clean Claim Elements);]

(ii) [(D)] if applicable, the amount paid by the primary plan or other valid coverage pursuant to §21.2803(c) [§21.2803(e)] of this title (relating to Elements of a Clean Claim)[,if applicable] . [; and ]

[(E) any revised data elements, attachments, and additional clean claim elements of which the physician or provider has been properly notified pursuant to §21.2806 of this title (relating to Disclosure of Revision of Data Elements, Attachments, or Additional Clean Claim Elements).]

(B) For electronic claims, a claim submitted by a physician or provider for medical care or health care services rendered to an enrollee under a health care plan or to an insured under a health insurance policy using the ASC X12N 837 format and in compliance with all applicable federal laws related to electronic healthcare claims, including applicable implementation guides, companion guides and trading partner agreements.

(6) [(5)]Condition code -- The code utilized by CMS [HCFA ] to identify conditions that may affect processing of the claim.

(7) [(6)]Contracted rate -- Fee or reimbursement amount for a preferred [physician's or ] provider's services, treatments, or supplies as established by agreement between the preferred [physician or ] provider and the HMO or preferred provider carrier.

(8) Corrected Claim -- a claim containing clarifying or additional information necessary to correct a previously submitted claim.

(9) [(7)] Deficient claim -- A submitted claim that does not comply with the requirements of [contain the required clean claim elements pursuant to ] §21.2803(b) or (d) [§21.2803(a)] of this title.

[(8)Delegated claims processor -- A licensed third party administrator to which an HMO or preferred provider carrier has delegated claims processing functions.]

(10) [(9)] Diagnosis code -- Numeric or alphanumeric codes from the International Classification of Diseases (ICD-9-CM), Diagnostic and Statistical Manual (DSM-IV), or their successors, valid at the time of service. [The ICD-9-CM code number. Narrative diagnoses for non-physician specialties shall be submitted on an attachment.]

(11) [(10)] Duplicate Claim -- Any claim submitted by a physician or provider for the same health care service provided to a particular individual on a particular date of service that was included in a previously submitted claim. The term does not include corrected claims. [HCFA -- The Health Care Financing Administration of the U.S. Department of Health and Human Services.]

(12) [(11)] HMO -- A health maintenance organization as defined by Insurance Code Section 843.002(14) [Article 20A.02(n)].

(13) [(12)] HMO delivery network -- As defined by Insurance Code Section 843.002(15) [Article 20A.02(w)].

(14) [(13)] Institutional provider -- An institution providing health care services, including but not limited to hospitals, other licensed inpatient centers, ambulatory surgical centers, skilled nursing centers and residential treatment centers.

(15) [(14)] Occurrence span code -- The code utilized by CMS [HCFA ] to define a specific event relating to the billing period.

(16) [(15)] Patient control number -- A unique alphanumeric identifier assigned by the institutional provider to facilitate retrieval of individual financial records and posting of payment.

(17) [(16)] Patient-status-at-discharge code -- The code utilized by CMS [HCFA ] to indicate the patient's status at time of discharge or billing.

(18) (17) Physician [or provider ] -- Anyone licensed to practice medicine in this state.

[ (A) with regard to a preferred provider carrier, a preferred provider as defined by Insurance Code Article 3.70-3C, §1(10) (Preferred Provider Benefit Plans) or Article 3.70-3C, §1(1) (Use of Advanced Practice Nurses and Physician Assistants by Preferred Provider Plans).]

[(B) with regard to an HMO,]

[(i) a physician, as defined by Insurance Code Article 20A.02(r), who is a member of that HMO's delivery network; or]

[(ii) a provider, as defined by Insurance Code Article 20A.02(t), who is a member of that HMO's delivery network]

(19) [(18)] Place of service code -- The codes utilized by CMS[HCFA] that identify the place at which the service was rendered.

(20) Preferred provider --

(A) with regard to a preferred provider carrier, a preferred provider as defined by Insurance Code Article 3.70-3C, §1(10) (Preferred Provider Benefit Plans) or Article 3.70-3C, §1(1) (Use of Advanced Practice Nurses and Physician Assistants by Preferred Provider Plans).

(B) with regard to an HMO,

(i) a physician, as defined by Insurance Code Section 843.002(22), who is a member of that HMO's delivery network; or

(ii) a provider, as defined by Insurance Code Section 843.002(24), who is a member of that HMO's delivery network.

(21) [(19)] Preferred provider carrier -- An insurer that issues a preferred provider benefit plan as provided by Insurance Code Article 3.70-3C, Section 2 (Preferred Provider Benefit Plans).

(22) [(20)] Primary plan -- As defined in §3.3506 of this title (relating to Use of the Terms "Plan," "Primary Plan," "Secondary Plan," and "This Plan" in Policies, Certificates and Contracts).

(23) [(21)] Procedure code ­ Any alphanumeric code that is part of a medical code set that is adopted by CMS as required by federal statute and valid at the time of service. [The HCFA Common Procedure Coding System (HCPCS) number, including CPT codes]. In the absence of an existing federal [ HCPCS ] code [ or other commonly used code ] , and for non-electronic claims only , this definition may also include [ item may also apply to ] local codes developed specifically by Medicaid, Medicare, an HMO, or a preferred provider carrier to describe a specific service or procedure.

(24) Provider -- any practitioner, institutional provider, or other person or organization that furnishes health care services and that is licensed or otherwise authorized to practice in this state, other than a physician.

(25) [ (22) ] Revenue code -- The code assigned by CMS [ HCFA ] to each cost center for which a separate charge is billed.

(26) [ (23) ] Secondary plan -- As defined in §3.3506 of this title.

(27) [ (24) ] Source of admission code -- The code utilized by CMS [ HCFA ] to indicate the source of an inpatient admission.

(28) [ (25) ] Statutory claims payment period --

(A) [ the 45-calendar-day, or other time period not to exceed 45 calendar days set forth by written agreement between the physician or provider and the HMO or preferred provider carrier, in which claim payment or denial, in whole or in part, shall be made by an HMO or preferred provider carrier after receipt of a clean claim pursuant to Insurance Code Article 3.70-3C, §3(m) (Preferred Provider Benefit Plans), and Article 20A.09(j);]

[ (B) ] the 45-calendar-day period in which an HMO or preferred provider carrier shall make claim payment or denial, in whole or in part, [ shall be made by an HMO or preferred provider carrier after receipt of a non-electronic clean claim pursuant to Insurance Code Article 3.70-3C, §3A (Preferred Provider Benefit Plans) and Chapter 843 [ Article 20A.18B ; [ or ]

(B) the 30-calendar-day period in which an HMO or preferred provider carrier shall make claim payment or denial, in whole or in part, after receipt of an electronically submitted clean claim pursuant to Insurance Code Article 3.70-3C, §3A (Preferred Provider Benefit Plans) and Chapter 843; or

(C) the 21-calendar-day period in which an HMO or preferred provider carrier shall make claim payment [ or denial, in whole or in part, shall be made by an HMO or preferred provider carrier ] after affirmative adjudication [ 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(f) [ §3A(d) ] (Preferred Provider Benefit Plans) and Section 843.339 [ Article 20A.18B(d) ], and §21.2814 of this title (relating to Electronic Adjudication of Prescription Benefits).

(29) [ (26) ] Subscriber -- If individual coverage, the individual who is the contract holder and is responsible for payment of premiums to the HMO or preferred provider carrier; or if group coverage, the individual who is the certificate holder and whose employment or other membership status, except for family dependency, is the basis for eligibility for enrollment in a group health benefit plan issued by the HMO or the preferred provider carrier.

(30) [ (27) ] Type of bill code -- The three-digit alphanumeric code utilized by CMS [ HCFA ] to identify the type of facility, the type of care, and the sequence of the bill in a particular episode of care.

§21.2803. Elements of a Clean Claim.

(a) Filing a Clean Claim [ Required clean claim elements ]. A physician or provider submits a clean claim by providing to an HMO, preferred provider carrier, or any other entity designated for receipt of claims pursuant to §21.2811 of this title (related to Disclosure of Processing Procedures):

(1) for non-electronic claims, the required data elements specified in subsection (b) of this section ;

(2) for electronic claims , the required data elements specified in subsections (d) and (e) of this section ; and

(3) if applicable, any coordination of benefits or non-duplication of benefits information pursuant to subsection (c) 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. CMS [ 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)[ , ] and (2) [ and (3) ] of this subsection are based upon the terms used by CMS [ HCFA ] on successor forms CMS-1500 [ HCFA-1500 (12-90) ] and UB-92 CMS-1450 [ HCFA-1450 ] claim forms. The parenthetical information following each term refers [ is a reference ] to the applicable CMS [HCFA ] claim form, and the field number to which that term corresponds on the CMS [ HCFA ] claim form.

(1) Required [ Essential ] data elements for physicians or noninstitutional providers. The [ Unless otherwise agreed by contract, the ] data elements described in this paragraph are required [ necessary ] as indicated and must be completed in accordance with the special instructions applicable to the data element for clean claims filed by physicians and noninstitutional providers.

(A) subscriber's/patient's plan ID number ( CMS [ HCFA ] 1500, field 1a) is required ;

(B) patient's name ( CMS [ HCFA ] 1500, field 2) is required ;

(C) patient's date of birth and gender ( CMS [ HCFA ] 1500, field 3) is required ;

(D) subscriber's name ( CMS [ HCFA ] 1500, field 4) is required ;

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

(F) patient's relationship to subscriber ( CMS [ HCFA ] 1500, field 6) is required ;

(G) subscriber's address (street or P.O. Box, city, zip) ( CMS [ HCFA ] 1500, field 7) is required, but physician or provider may enter "same" if the subscriber´s address is the same as the patient´s address required by subparagraph (E) of this paragraph ;

(H) other insured's or enrollee's name (CMS 1500, field 9), is required if patient is ccovered by more than one health benefit plan, generally in situations described in subsection (c) of this section. If the required data element specified in paragraph (1)(P) of this subsection, "disclosure of any other health benefit plans," is answered "yes," this element is required 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;

(I) other insured's or enrollee's policy/group number (CMS 1500, field 9a), is required if patient is covered by more than one health benefit plan, generally in situations described in subsection (c) of this section. If the required data element specified in paragraph (1)(P) of this subsection, "disclosure of any other health benefit plans," is answered "yes," this element is required 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;

(J) other insured's or enrollee's date of birth (CMS 1500, field 9b), is required if patient is covered by more than one health benefit plan, generally in situations described in subsection (c) of this section. If the required data element specified in paragraph (1)(P) of this subsection, "disclosure of any other health benefit plans," is answered "yes," this element is required 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;

(K) other insured's or enrollee's plan name (employer, school, etc.) (CMS 1500, field 9c), is required if patient is covered by more than one health benefit plan, generally in situations described in subsection (c) of this section. If the required data element specified in paragraph (1)(P) of this subsection, "disclosure of any other health benefit plans," is answered "yes," this element is required 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. If the field is required and the physician or provider is a facility based radiologist, pathologist or anesthesiologist with no direct patient contact, the physician or provider must either enter the information or enter NA (not available) if the information is unknown;

(L) other insured's or enrollee's HMO or insurer name (CMS 1500, field 9d), is required if patient is covered by more than one health benefit plan, generally in situations described in subsection (c) of this section. If the required data element specified in paragraph (1)(P) of this subsection, "disclosure of any other health benefit plans," is answered "yes," this element is required 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;

(M) [ (H) ] whether patient's condition is related to employment, auto accident, or other accident ( CMS [ HCFA ] 1500, field 10) is required, but facility based radiologists, pathologists, or anesthesiologists shall enter "N" if the answer is "No" or if the information is not available ;

(N) [ (I) ] subscriber's policy number ( CMS [ HCFA ] 1500, field 11) is required;

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

(O ) [ (K) ] HMO or insurance company [preferred provider carrier ] name ( CMS [ HCFA ] 1500, field 11c) is required ;

(P ) [ (L) ] disclosure of any other health benefit plans ( CMS [ HCFA ] 1500, field 11d) is required ;

(i) if respond "yes", then

(I) data elements specified in paragraph (1)(H)-(L) [ (3)(A)-(E) ] of this subsection are required [ 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 (1)(H)-(L) [ (3)(A)-(E) ] of this subsection;

(II) the data element specified in paragraph (1)(II) [ (3)(I) ] of this subsection is required [ essential ] when submitting claims to secondary payor HMOs or preferred provider carriers;

(ii) if respond "no," the data elements specified in paragraph (1)(H)-(L) [ (3)(A)-(E) ] of this subsection are not required [ 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 a required [ an essential ] data element, a copy of the signed document shall be provided to the HMO or preferred provider carrier upon request.

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

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

(S) [ (O) ] date of [ current illness ,] injury[ , or pregnancy ] (HCFA 1500, field 14) is required, if due to an accident ;

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

(T) name of referring physician or other source (CMS 1500, field 17) is required for primary care physicians, specialty physicians and hospitals; however, if there is no referral, the physician or provider shall enter "Self-referral" or "None";

(U) I.D. Number of referring physician (CMS 1500, field 17a) is required for primary care physicians, specialty physicians and hospitals; however, if there is no referral, the physician or provider shall enter "Self-referral" or "None";

(V) narrative description of procedure (CMS 1500, field 19) is required when a physician or provider uses an unlisted or not classified procedure code or an NDC code for unlisted drugs;

(W) [ (Q) ] for diagnosis codes or nature of illness or injury, ( CMS [ HCFA ] 1500, field 21) up to four diagnosis codes may be entered, but at least one is required (primary diagnosis must be entered first) ;

(X) if the claim is a duplicate claim, a "D" is required, if the claim is a corrected claim, a "C" is required (CMS 1500, field 22);

(Y) prior authorization number (CMS 1500, field 23), is required when prior authorization is required;

(Z) [ (R) ] date(s) of service ( CMS [ HCFA ] 1500, field 24A) is required ;

(AA) [ (S) ] place of service codes ( CMS [ HCFA ] 1500, field 24B) is required ;

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

(BB) [ (U) ] procedure/modifier code ( CMS [ HCFA ] 1500, field 24D) is required ;

(CC) [( V) ] diagnosis code by specific service ( CMS [ HCFA ] 1500, field 24E ) is required with the first code linked to the applicable diagnosis code for that service in field 21 ;

(DD) [ (W) ] charge for each listed service ( CMS [ HCFA ] 1500, field 24F) is required ;

(EE) [ (X) ] number of days or units ( CMS [ HCFA ] 1500, field 24G) is required ;

(FF) [( Y) ] physician's or provider's federal tax ID number ( CMS [ HCFA ] 1500, field 25) is required ;

(GG) whether assignment was accepted (CMS 1500, field 27), is required if assignment under Medicare has been accepted;

(HH) [ (Z) ] total charge ( CMS [ HCFA ] 1500, field 28) is required ;

(II) amount paid (CMS 1500, field 29), is required 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)(P) of this subsection and as required by subsection (c) of this section;

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

(KK ) [ (BB) ] name and address of facility where services rendered (if other than home or office) ( CMS [ HCFA ] 1500, field 32) is required ; and

(LL) [ (CC ) ] physician's or provider's billing name , [ and ] address and telephone number is required, and the provider number ( CMS [ HCFA ] 1500, field 33) is required if the HMO or preferred provider carrier required provider numbers and gave notice of that requirement to physicians and providers prior to June 17, 2003 .

(2) Required [ Essential ] data elements for institutional providers. The [ Unless otherwise agreed by contract, the ] data elements described in this paragraph are required [ necessary ] as indicated and must be completed in accordance with the special instructions applicable to the data element for clean claims filed by institutional providers.

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

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

(C) type of bill code (UB-92, field 4) is required and shall include a "7" in the third position if the claim is a duplicate and an "8" in the third position if the claim is a corrected claim ;

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

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

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

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

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

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

(J) [ (F) ] patient's name (UB-92, field 12) is required ;

(K) [ (G) ] patient's address (UB-92, field 13) is required ;

(L) [ (H) ] patient's date of birth (UB-92, field 14) is required ;

(M) [ (I) ] patient's gender (UB-92, field 15) is required ;

(N) [ (J) ] patient's marital status (UB-92, field 16) is required ;

(O) [ (K) ] date of admission (UB-92, field 17) is required for inpatient admissions, observation stays, and emergency room care ;

(P) [ (L) ] admission hour (UB-92, field 18) is required for inpatient admissions, observation stays, and emergency room care ;

(Q) [ (M) ] type of admission (e.g. , emergency, urgent, elective, newborn) (UB-92, field 19) is required for inpatient admissions ;

(R) [ (N) ] source of admission code (UB-92, field 20) is required for inpatient admissions ;

(S) discharge hour (UB-92, field 21), is required for inpatient admissions, outpatient surgeries or observation stays;

(T) [ (O) ] patient-status-at-discharge code (UB-92, field 22) is required for inpatient admissions, observation stays, and emergency room care ;

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

(V) occurrence codes and dates (UB-92, fields 32-35), are required if the CMS UB-92 manual contains an occurrence code appropriate to the patient's condition;

(W) occurrence span code, from and through dates (UB-92, field 36), are required if the CMS UB-92 manual contains an occurrence span code appropriate to the patient's condition;

(X) [ (P) ] value code and amounts (UB-92, fields 39-41) are required for inpatient admissions. If no value codes are applicable to the inpatient admission, the provider may enter value code 01;

(Y) [ (Q) ] revenue code (UB-92, field 42) is required ;

(Z) [ (R) ] revenue description (UB-92, field 43) is required ;

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

(BB) Service date (UB-92, field 45) is required if the claim is for outpatient services;

(CC) [ (S) ] units of service (UB-92, field 46) are required ;

(DD) [ (T) ] total charge (UB-92, field 47) is required ;

(EE) [ (U) ] HMO or preferred provider carrier name (UB-92, field 50) is required ;

(FF) provider number (UB-92, field 51), is required if the HMO or preferred provider carrier, prior to June 17, 2003, required provider numbers and gave notice of that requirement to physicians and providers.

(GG) prior payments - payor and patient (UB-92, field 54), are required 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 (c) of this section;

(HH) [ (V) ] subscriber's name (UB-92, field 58) is required ;

(II) [ (W) ] patient's relationship to subscriber (UB-92, field 59) is required ;

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

(KK) insurance group number (UB-92, field 62) is required if a group number is shown on the patient´s ID card;

(LL) treatment authorization codes (UB-92, field 63) are required when authorization is required;

(MM) [ (Y) ] principal diagnosis code (UB-92, field 67) is required ;

(NN) diagnoses codes other than principal diagnosis code (UB-92, fields 68-75), are required if there are diagnoses other than the principal diagnosis;

(OO) admitting diagnosis code (UB-92, field 76) is required;

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

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

(RR) other procedure codes (UB-92, field 81), are required as an extension of subparagraph (II) of this paragraph if additional surgical procedures were performed;

(SS) [ (Z) ] attending physician ID (UB-92, field 82) is required ;

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

(UU) [ (BB) ] date bill submitted (UB-92, field 86) is required .

[ (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 ] a required [ an essential ] element of a clean claim for purposes of the secondary plan's processing of the claim and CMS [ HCFA ] 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(1)(II) [ (b) (3)(I) ] and (b)(2)(GG) [ (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 ] a required [ an essential ] element of a clean claim and CMS [ HCFA ] 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(1)(II) [ (b) (3)(I) ] and (b)(2)(GG) [ (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 ] a required [ an essential ] element of a clean claim and CMS [ HCFA ] 1500, field 29 or UB-92, field 54 must be completed pursuant to subsection (b)(1)(II) [ (b) (3)(I) ] and (b)(2)(GG) [ (T) ] of this section. Notwithstanding these requirements, an HMO or preferred provider carrier may n ot require a physician or provider to investigate coordination of other health benefit plan coverage.

(d) A physician or provider submits an electronic clean claim by submitting a claim using the ASC X12N 837 format that complies with all applicable federal laws related to electronic healthcare claims, including applicable implementation guides, companion guides and trading partner agreements.

(e) If a physician or provider submits an electronic clean claim that requires coordination of benefits pursuant to §§3.3501-3.3511 of this title (relating to Group Coordination of Benefits) or §11.511(1) of this title (relating to Optional Provisions), the HMO or preferred provider carrier processing the claim as a secondary payor shall rely on the primary payor information submitted on the claim by the physician or provider. The primary payor may submit primary payor information electronically to the secondary payor using the ASC X12N 837 format and in compliance with federal laws related to electronic healthcare claims, including applicable implementation guides, companion guides and trading partner agreements.

(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 on a claim form 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 . Requests for Additional Information from Treating Preferred Provider.

(a) If necessary to determine whether a claim is payable, an HMO or preferred provider carrier may, within 30 days of receipt of a clean claim, request additional information from the treating preferred provider. An HMO or preferred provider carrier may make only one request to the submitting preferred provider for information under this section.

(b) A request for information under this section must:

(1) be in writing;

(2) be specific to the claim or the claim´s related episode of care;

(3) describe with specificity the clinical and other information to be included in the response;

(4) be relevant and necessary for the resolution of the claim; and

(5) be for information that is contained in or in the process of being incorporated into the patient´s medical or billing record maintained by the preferred provider.

(c) An HMO or preferred provider carrier that requests information under this section shall determine whether the claim is payable and pay or deny the claim, or audit the claim in accordance with §21.2809 of this title (relating to Audit Procedures), on or before the later of:

(1) the 15 th day after the date the HMO or preferred provider carrier receives the requested information as required under subsection (e) of this section;

(2) the 15 th day after the date the HMO or preferred provider carrier receives a response under subsection (d) of this section; or

(3) the latest date for determining whether the claim is payable under §21.2807 of this title (relating to Effect of Filing a Clean Claim).

(d) If a preferred provider does not possess the requested information, the preferred provider must submit a written response indicating that the preferred provider does not possess the requested information in order to resume the claims payment period as described in subsection (c).

(e) An HMO or preferred provider carrier shall require the preferred provider responding to a request made under this section to either attach a copy of the request to the response or include with the response, the name of the patient, the patient identification number, the claim number as provided by the HMO or preferred provider carrier, the date of service, and the name of the treating preferred provider. If the HMO or preferred provider carrier submitted the request for additional information electronically in accordance with federal requirements concerning electronic transactions, the preferred provider must submit the response in accordance with those requirements. In order to resume the claims payment period as described in subsection (c), the preferred provider must deliver the requested information in compliance with this subsection.

(f) Receipt of a request or a response to a request under this section is subject to the provisions of §21.2816 of this title (relating to Date of Receipt).

§21.2805. Requests for Additional Information from Other Sources.

(a) If an HMO or preferred provider carrier requests additional information from a person other than the preferred provider who submitted the claim, the HMO or preferred provider carrier shall provide, to the preferred provider who submitted the claim, a notice containing the name of the physician, provider or other entity from whom the HMO or preferred provider carrier is requesting information. The HMO or preferred provider carrier may not withhold payment beyond the applicable 21, 30 or 45 day statutory claims payment period pending receipt of information requested under subsection (b) of this section. If on receiving information requested under this subsection the HMO or preferred provider carrier determines that there was an error in payment of the claim, the HMO or preferred provider carrier may recover any overpayment under §21.2818 of this title (relating to Overpayment of Claims).

(b) An HMO or preferred provider carrier shall request the entity responding to a request made under this section to attach a copy of the request to the response. If the request for additional information was submitted electronically in accordance with applicable federal requirements concerning electronic transactions, the response shall be submitted in accordance with those requirements, if applicable.

(c) Receipt of a request or a response to a request under this section is subject to the provisions of §21.2816 of this title (relating to Date of Receipt).

§21.2806. Claims Filing Deadline.

(a) A physician or provider must submit a claim to an HMO or preferred provider carrier not later than the 95th day after the date the physician or provider provides the medical care or health care services for which the claim is made. An HMO or preferred provider carrier and a physician or provider may agree, by contract, to extend the period for submitting a claim. For a claim for which coordination of benefits applies, the 95-day period does not begin for submission of the claim to the secondary payor until the physician or provider receives notice of the payment or denial from the primary payor. For a claim submitted by an institutional provider, the 95-day period does not begin until the date of discharge.

(b) If a physician or provider fails to submit a claim in compliance with this section, the physician or provider forfeits the right to payment unless the physician or provider has certified that the failure to timely submit the claim is a result of a catastrophic event in accordance with §21.2819 of this title (relating to Catastrophic Event).

(c) A physician or provider may submit claims via United States mail, first class, overnight delivery service, electronic transmission, facsimile, hand delivery, or as otherwise agreed to by the physician or provider and the HMO or preferred provider carrier. An HMO or preferred provider carrier shall accept as proof of timely filing a claim filed in compliance with this subsection or information from another HMO or preferred provider carrier showing that the physician or provider submitted the claim to the HMO or preferred provider carrier in compliance with this subsection.

(d) §21.2816 of this title (relating to Date of Receipt) determines the date an HMO or preferred provider carrier receives a claim.

(e) A physician or provider may not submit a duplicate claim prior to the 46 th day, the 31 st day if filed electronically, or the 22 nd day if a claim for prescription benefits, after the date the original claim is presumed to be received according to the provisions of §21.2816 of this title. An HMO or preferred provider carrier that receives a duplicate claim prior to the 46 th day after receipt of the original claim, a duplicate electronic claim prior to the 31 st day after receipt of the original claim, or a duplicate claim for prescription benefits prior to the 22 nd day after receipt of the original claim is not subject to the provisions of §§21.2807 of this title (relating to Effect of Filing a Clean Claim) or 21.2815 of this title (relating to Failure to Meet the Statutory Claims Payment Period) with respect to the duplicate claim.

§21.2807 . Effect of Filing a Clean Claim.

(a) The statutory claims payment period begins to run upon receipt of a clean claim , including a corrected claim that is a clean claim, from a preferred [ physician or ] provider , pursuant to §21.2816 of this title (relating to Date of Receipt), 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 applicable statutory claims payment period specified in §21.2802(28) [ §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 preferred [ 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 preferred [ physician or ] provider in writing why the clean claim will not be paid;

(3) notify the preferred [ physician or ] provider in writing that the entire clean claim will be audited and pay 100% [ 85% ] of the contracted rate on the claim to the preferred [ 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 preferred [ 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 preferred [ physician or ] provider in writing why the remainder of the clean claim will not be paid; or

(B) notify the preferred [ physician or ] provider in writing that the remainder of the clean claim will be audited and pay 100% [ 85% ] of the contracted rate on the unpaid portion of the clean claim to the preferred [ 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 affirmatively [ electronically ] adjudicated [ and electronically paid ] pursuant to Insurance Code Article 3.70-3C, §3A(f) [ §3A(d) ] (Preferred Provider Benefit Plans) and Insurance Code §843.339 [ Article 20A.18B(d) ], pay [ or deny ] the prescription benefit claim[ , in whole or in part, ] within 21 calendar days after the clean claim is adjudicated. [ 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.]

§21.2808. Effect of Filing Deficient Claim. If an HMO or preferred provider carrier determines a submitted claim [is determined by an HMO or preferred provider carrier ] to be deficient, the HMO or preferred provider carrier shall notify the preferred [ physician or ] provider submitting the claim that the claim is deficient within 45 calendar days of the HMO's or preferred provider carrier's receipt of the claim , or within 30 days of receipt of an electronic claim . [ The HMO or preferred provider carrier and the physician or provider may agree to a different time period, not to exceed 45 calendar days, for notification that a claim is deficient. ] If an HMO or preferred provider carrier determines an electronically submitted claim for a prescription benefit [ is determined by an HMO or preferred provider carrier ] to be deficient, the HMO or preferred provider carrier shall notify the provider within 21 calendar days of the HMO's or preferred provider carrier's receipt of the claim.

§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 applicable statutory claims payment period specified in §21.2802(25)(B) of this title (relating to Definitions)[ , ] and intends to audit the claim to determine whether the claim is payable, [ the unpaid portion of the claim shall be classified as an audit, and ] the HMO or preferred provider carrier shall notify the preferred provider that the claim is being audited and pay 100% [ 85% ] of the contracted rate [ on the unpaid portion of the clean claim ] within the applicable statutory claims payment period. An HMO or preferred provider carrier that fails to provide notification of the decision to audit the claim and pay 100% of the applicable contracted rate subject to copayments and deductibles within the applicable statutory claims payment period, or, if applicable, the extended period allowed for by §21.2804(c) of this title (relating to Requests for Additional Information), may not make use of the audit procedures set forth in this section. A preferred provider that receives less than 100% of the contracted rate in conjunction with a notice of intent to audit has received an underpayment and must notify the HMO or preferred provider carrier within 180 days in accordance with the provisions of §21.2815(c) of this title (relating to Failure to Meet the Statutory Claims Payment Period) to qualify to receive a penalty for the underpaid amount.

(b) The HMO or preferred provider carrier shall clearly indicate on the explanation of payment that the claim is being audited and the preferred provider is being paid 100% of the contracted rate, subject to completion of the audit. A paper explanation of payment complies with this requirement if the notice of the audit is clearly and prominently identified.

(c) [ (b) ] The HMO or preferred provider carrier shall complete the audit within 180 calendar days from receipt of 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 HMO or preferred provider carrier shall provide written notification of the results of the audit . The notice shall include a listing of the specific claims paid and not paid pursuant to the audit, as well as a listing of [ including ] specific claims and amounts for which a refund is due and for each claim, the basis and specific reasons for requesting a refund. An HMO or preferred provider carrier seeking recovery of any refund under this section shall comply with the procedures set forth in §21.2818 of this title (relating to Overpayment of Claims). [ 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. ]

(d) [ (c) ] An HMO or preferred provider carrier may recover the total amount paid on the claim under subsection (a) of this section if a physician or provider fails to timely provide additional information requested pursuant to the requirements of Insurance Code Article 3.70-3C §3A(g) or Section 843.340(c). Section 21.2816 of this title (relating to Date of Receipt) applies to the submission and receipt of a request for information under this subsection. [ 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. ]

(e) Prior to seeking a refund for a payment made under this section, an HMO or preferred provider carrier must provide a preferred provider with the opportunity to appeal the request for a refund in accordance with §21.2818 of this title. An HMO or preferred provider carrier may not seek to recover the refund until all of the preferred provider´s internal appeal rights under §21.2818 of this title have been exhausted.

(f) [ (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 preferred [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 preferred [ physicians and ] providers :

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

(2) the telephone number at which preferred [ 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 preferred [ 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). ]

§21.2812. Denial of Clean Claim Prohibited for Change of Address [or Delegated Claims Processor]. After a change of claims payment address or a change in delegation of claims payment functions, an HMO or preferred provider carrier may not premise the denial of a clean claim upon a preferred [physician's or ] provider's failure to file a clean claim within the claims filing deadline set forth in §21.2806 of this title (relating to Claims Filing Deadline) [any contracted time period for claim filing ], unless timely written notice as required by §21.2811(b) of this title (relating to Disclosure of Processing Procedures) has been given.

§21.2813 . Requirements Applicable to Other Contracting Entities. [Delegated Claims Processors. If an HMO or preferred provider carrier has delegated its claims processing functions to a third party, the delegation agreement must provide that the claims processing entity will comply with the requirements of this subchapter and applicable law. ] Any contract or delegation agreement [or provision ] between an HMO or preferred provider carrier and an entity that processes or pays claims, obtains the services of physicians and providers to provide health care services, or issues verifications or preauthorizations may not be construed to limit the HMO's or preferred provider carrier's authority or responsibility to comply with all applicable statutory and regulatory requirements.

§21.2814. Electronic Adjudication of Prescription Benefits. If a prescription benefit does not require authorization by an HMO or preferred provider carrier, the statutory claims payment period shall begin on the date of affirmative adjudication of a [clean ] claim for a [that ] prescription benefit that is electronically transmitted.

§21.2815. Failure to Meet the Statutory Claims Payment Period.

(a) An HMO or preferred provider carrier that determines under §21.2807 of this title (relating to Effect of Filing a Clean Claim) that a claim is payable [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 :

(1) if the claim is paid on or before the 45 th day after the end of the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty in the amount of the lesser of:

(A) 50% of the difference between the billed charges and the contracted rate; or

(B) $100,000.

(2) If the claim is paid on or after the 46th day and before the 91st day after the end of the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty in the amount of the lesser of:

(A) 100% of the difference between the billed charges and the contracted rate; or

(B) $200,000.

(3) If the claim is paid on or after the 91st day after the end of the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty computed under paragraph (2) of this subsection plus 18% annual interest. Interest under this subsection accrues beginning on the date the HMO or preferred provider carrier was required to pay the claim and ending on the date the claim and the penalty are paid in full.

(b) Except as provided by this section, an HMO or preferred provider carrier that determines under §21.2807 of this title that a claim is payable, pays only a portion of the amount of the claim on or before the end of the applicable 21, 30 or 45 day statutory claims payment period, and pays the balance of the contracted rate owed for the claim after that date shall:

(1) If the balance of the claim is paid on or before the 45 th day after the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty on the amount not timely paid in the amount of the lesser of:

(A) 50% of the underpaid amount; or

(B) $100,000.

(2) If the balance of the claim is paid on or after the 46th day and before the 91st day after the end of the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty in the amount of the lesser of:

(A) 100% of the underpaid amount; or

(B) $200,000.

(3) If the balance of the claim is paid on or after the 91st day after the end of the applicable 21, 30 or 45 day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty computed under paragraph (2) of this subsection plus 18% annual interest. Interest under this subsection accrues beginning on the date the HMO or preferred provider carrier was required to pay the claim and ending on the date the claim and the penalty are paid in full.

(c) For the purposes of subsection (b) of this section, the underpaid amount is calculated on the ratio of the amount underpaid on the contracted rate to the contracted rate as applied to the billed charges. For example, a claim for a contracted rate of $1,000.00 and billed charges of $1,500.00 is initially underpaid at $800.00 and the $200.00 balance is paid on the 30 th day after the end of the applicable statutory claims payment period. The amount underpaid, $200.00, is 20% of the contracted rate. In order to determine the penalty, the HMO or preferred provider carrier must calculate 20% of the billed charges, which is $300.00. This amount represents the underpaid amount for subsection (b)(1) of this section. Therefore, the HMO or preferred provider carrier must pay, as a penalty, 50% of $300.00, or $150.00.

(d) An HMO or preferred provider carrier is not liable for a penalty under this section:

(1) if the failure to pay the claim in accordance with the applicable statutory claims payment period is a result of a catastrophic event that the HMO or preferred provider carrier certified according to the provisions of §21.2831 of this title (relating to Catastrophic Events); or

(2) if the claim was paid in accordance with §21.2807 of this title, but for less than the contracted rate, and:

(A) the preferred provider notifies the HMO or preferred provider carrier of the underpayment after the 180th day after the date the underpayment was received; and

(B) the HMO or preferred provider carrier pays the balance of the claim on or before the 45th day after the date the insurer receives the notice of underpayment.

(e) Subsection (d) of this section does not relieve the HMO or preferred provider carrier of the obligation to pay the remaining unpaid contracted rate owed the preferred provider.

(f) An HMO or preferred provider carrier that pays a penalty under this section shall clearly indicate on the explanation of payment the amount of the contracted rate paid, the amount of the billed charges as compared to the amount submitted by the physician or provider and the amount paid as a penalty. A non-electronic explanation of payment complies with this requirement if it clearly and prominently identifies the notice of the penalty amount [ 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 written communication, including a claim, referenced under this subchapter is subject to and shall comply with this section unless otherwise stated in this subchapter. [ 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) An entity subject to these rules may deliver written communications as follows: [ 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 communication [ 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 (h) [ (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 communication [ claim ] electronically and maintain proof of the electronically submitted communication [ claim ];

(3) if the entity [ HMO or preferred provider carrier ] accepts facsimile transmissions for the type of communication being sent, [ claims submission by fax, then ] fax the communication [ claim ] and maintain proof of facsimile transmission; or

(4) hand deliver the communication [ 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 communication [ claim for medical care or health care services provided to a patient ] is submitted by United States mail, first class, the communication [ claim] is presumed to have been received on the fifth [ third business ] day after the date the communication [ claim] is submitted [ and the faxed or electronically generated log is transmitted ], or , if the communication [ claim ] is submitted using overnight delivery service or United States mail return receipt requested, on the date the delivery receipt is signed.

(d) If a communication other than a claim is submitted electronically, the communication is presumed received on the date of submission. Communications electronically submitted after the receiving entity´s normal business hours are presumed received the following business day.

(e) If a [ 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.

(f) [ (e) ] If a communication [ claim ] is faxed, the communication [ claim ] is presumed to have been received on the date of the transmission acknowledgment. Communications [ Claims ] faxed after the receiving entity´s [ payor's ] normal business hours are presumed received the following business day.

(g) [ (f) ] If a communication [ claim ] is hand delivered, the communication [ claim ] is presumed to have been received on the date the delivery receipt is signed.

(h) [ (g) ] Any entity submitting a communication under this section may choose to maintain a mail log to provide proof of submission and establish date of receipt. The entity shall fax or electronically transmit a copy of the mail log, if used, to the receiving entity at the time of the submission of a communication and include another copy with the relevant communication. The log shall identify each separate claim, request for information or response included in a batch communication. 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 HMO or preferred provider 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 , and claim number, if applicable .

[ (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)]

FOR COPIES OF THE CLAIMS MAIL LOG, CONTACT ChiefClerk@tdi.texas.gov

§21.2817. Terms of Contracts. Unless otherwise provided in this subchapter, contracts [ Contracts ] between HMOs or preferred provider carriers and preferred [ physicians and ] providers shall not include terms which:

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

(2) waive the preferred [physician's or] provider's right to recover reasonable attorney fees pursuant to Insurance Code Article 3.70-3C §3A(n) [ Articles 20A.18B(g) and 3.70-3C §3A(g) ] and Section 843.343 .

§21.2818. Overpayment of Claims.

(a) An HMO or preferred provider carrier may recover a refund due to overpayment or completion of audit if:

(1) the HMO or preferred provider carrier notifies the physician or provider of the overpayment not later than the 180 th day after the date of receipt of the overpayment; or

(2) the HMO or preferred provider carrier notifies the physician or provider of the completion of an audit under §21.2809 of the subchapter (relating to Audits).

(b) Notification under subsection (a) of this section shall:

(1) be in written form and include the specific claims and amounts for which a refund is due and for each claim, the basis and specific reasons for the request for refund;

(2) include notice of the physician´s or provider´s right to appeal; and

(3) describe the methods by which the HMO or preferred provider carrier intends to recover the refund.

(c) A physician or provider may appeal a request for refund by providing written notice of disagreement with the refund request not later than 45 days after receipt of notice described in subsection (a) of this section. Upon receipt of written notice under this subsection, the HMO or preferred provider carrier shall begin the appeal process provided for in the HMO or preferred provider carrier´s contract with the provider.

(d) An HMO or preferred provider carrier may not recover a refund under this section until:

(1) for overpayments, the later of the 45 th day after notification under subsection (a)(1) of this section or the exhaustion of any physician or provider appeal rights under subsection (c) of this section, where the physician or provider has not made arrangements for payment with an HMO or preferred provider carrier; or

(2) for audits, the later of the 30 th day after notification under subsection (a)(2) of this section or the exhaustion of any physician or provider appeal rights under subsection (c) of this section, where the physician or provider has not made arrangements for payment with an HMO or preferred provider carrier.

(e) If an HMO or preferred provider carrier is a secondary payor and pays a portion of a claim that should have been paid by the HMO or preferred provider carrier that is the primary payor, the secondary payor may only recover overpayment from the HMO or preferred provider carrier that is primarily responsible for that amount. If the portion of the claim overpaid by the secondary payor was also paid by the primary payor, the secondary payor may recover the amount of overpayment from the physician or provider that received the payment under the procedures set forth in this section.

§21.2819. Catastrophic Event.

(a) An HMO, preferred provider carrier, physician or provider must notify the department if, due to a catastrophic event, it is unable to meet the deadlines in §§21.2815 of this title (relating to Failure to Meet the Statutory Claims Payment Period) or 21.2829 (relating to Filing of Claims), as applicable. The entity must send the notification required under this subsection to the department within five days of the catastrophic event.

(b) Within ten days after the entity returns to normal business operations, the entity must send a certification of the catastrophic event to the department, to the Life/Health/HMO Filings Intake Division, Texas Department of Insurance, P.O. Box 149104 , Mail Code 106-1E. The certification must:

(1) be in the form of a sworn affidavit from:

(A) for a physician or provider, the physician, provider, office manager, administrators or their designees; or

(B) for an HMO or preferred provider carrier, a corporate officer.

(2) identify the specific nature and date of the catastrophic event; and

(3) identify the length of time the catastrophic event caused an interruption in the claims submission or processing activities of the physician, provider, HMO or preferred provider carrier.

(c) A valid certification to the occurrence of a catastrophic event under this section tolls the applicable deadlines in §§21.2804, 21.2806, 21.2809 and 21.2815 of this title for the number of days identified in subparagraph (b)(3) of this section as of the date of the catastrophic event.

§21.2821. Reporting Requirements.

(a) An HMO or preferred provider carrier shall submit to the department quarterly claims payment information in accordance with the requirements of this section.

(b) The HMO or preferred provider carrier shall submit the report required by subsection (a) of this section to the department on or before:

(1) May 15 th for the months of January, February and March of each year;

(2) August 15 th for the months of April, May and June of each year ;

(3) November 15 th for the months of July, August and September of each year; and

(4) February 15 th for the months of October, November and December of each preceding calendar year.

(c) The HMO or preferred provider carrier shall submit the first report required by this section to the department on or before February 15, 2004 and shall include information for the months of September, October, November and December of the prior calendar year.

(d) The report required by subsection (a) of this section shall include, at a minimum, the following information:

(1) number of claims received from non-institutional preferred providers;

(2) number of claims received from institutional providers;

(3) number of clean claims received from non-institutional preferred providers;

(4) number of clean claims received from institutional preferred providers;

(5) number of clean claims from non-institutional preferred providers paid within the applicable statutory claims payment period;

(6) number of clean claims from non-institutional preferred providers paid on or before the 45 th day after the end of the applicable statutory claims payment period;

(7) number of clean claims from institutional preferred providers paid on or before the 45 th day after the end of the applicable statutory claims payment period;

(8) number of clean claims from non-institutional preferred providers paid on or after the 46 th day and before the 91 st day after the end of the applicable statutory claims payment period;

(9) number of clean claims from institutional preferred providers paid on or after the 46 th day and before the 91 st day after the end of the applicable statutory claims payment period;

(10) number of clean claims from non-institutional preferred providers paid on or after the 91 st day after the end of the applicable statutory claims payment period;

(11) number of clean claims from institutional preferred providers paid on or after the 91 st day after the end of the applicable statutory claims payment period;

(12) number of clean claims from institutional preferred providers paid within the applicable statutory claims payment period;

(13) number of claims paid pursuant to the provisions of §21.2809 of this title (relating to Audit Procedures);

(14) number of requests for verification received pursuant to §19.1724 of this title (relating to Verification);

(15) number of verifications issued pursuant to §19.1724 of this title;

(16) number of declinations, pursuant to §19.1724 of this title.

(17) number of certifications of catastrophic events sent to the department; and

(18) number of days business was interrupted for each corresponding catastrophic event.

(e) An HMO or preferred provider carrier shall annually submit to the department, on or before July 31, information related to the number of declinations in the following categories:

(1) policy or contract limitations:

(A) premium payment timeframes that prevent verifying eligibility for 30-day period,

(B) policy deductible, specific benefit limitations or annual benefit maximum,

(C) benefit exclusions,

(D) waiting period, and

(E) pre-existing condition limitations;

(2) declinations in which the claim was subsequently paid when submitted;

(3) declinations in which claim was subsequently denied when submitted;

(4) declinations due to inability to obtain necessary information in order to verify requested services from the following persons:

(A) the requesting physician or provider,

(B) any other physician or provider,

(C) any other person.

§21.2822. Administrative Penalties.

(a) An HMO or preferred provider carrier that fails to comply with §21.2807 of this title (relating to Effect of Filing a Clean Claim) for more than two percent of clean claims submitted to the HMO or preferred provider carrier is subject to an administrative penalty pursuant to the Insurance Code, §843.342(k) or Article 3.70-3C section 3I(k), as applicable.

(b) The percentage of the HMO or preferred provider carrier´s compliance with §21.2807 of this title shall be determined on a quarterly basis and shall be separated into a compliance percentage for preferred provider claims and institutional provider claims. Claims paid in compliance with §21.2809 of this title (relating to Audit Procedures) are not included in calculating the compliance percentage under this section.

§21.2823. Applicability to Certain Non-Contracting Physicians and Providers. The provisions of §§19.1724 and 21.2807 of this title (relating to Verification and Effect of Filing a Clean Claim) apply to a physician or provider that provides to an enrollee or insured of an HMO or preferred provider carrier:

(1) care related to an emergency or its attendant episode of care as required by state or federal law; or

(2) specialty or other medical care or health care services at the request of the HMO, preferred provider carrier, physician, or provider because the services are not reasonably available from a physician or provider who is included in the HMO´s or preferred provider carrier´s network.

§21.2824. Applicability.The amendments to §§21.2801 - 21.2803, 21.2807 ­ 21.2809 and 21.2811 ­ 21.2817 of this title (relating to Scope, Definitions, Elements of a Clean Claim, Effect of Filing a Clean Claim, Effect of Filing Deficient Claim, Audit Procedures, Disclosure of Processing Procedures, Denial of Clean Claim Prohibited for Change of Address, Requirements Applicable to Other Contracting Entities, Electronic Adjudication of Prescription Benefits. Failure to Meet the Statutory Claims Payment Period, Date of Receipt, and Terms of Contracts), and new §§21.2804 - 21.2806, §§21.2818, 21.2819 and 21.2821 - 21.2825 of this title (relating to Requests for Additional Information from Treating Preferred Provider, Requests for Additional Information from Other Sources, Claims Filing Deadline, Overpayment of Claims, Catastrophic Event, Reporting Requirements, Administrative Penalties, Applicability to Certain Non-Contracting Physicians and Providers, Applicability, and Severability) apply to contracts entered into or renewed between an HMO or preferred provider carrier and a preferred provider on or after September 4, 2003 and to services provided or hospital confinements beginning on or after September 4, 2003 by physicians and providers that do not have a contract with an HMO or preferred provider carrier.

§21.2825. Severability. If a court of competent jurisdiction holds that any provision of this subchapter is inconsistent with any statutes of this state, is unconstitutional, or is invalid for any reason, the remaining provisions of this subchapter shall remain in full effect.



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