June 17, 2022 | By Sean Weiss, CHC, CEMA, CMCO, CPMA, CPC-P, CMPE, CPC
I am constantly being asked what can be done when government and commercial payors are slow-walking claims for payment. The simple answer is to know your state and federal law.
First, let’s tackle the federal law which is 42 CFR § 447.45[1] aptly titled “Timely Claims Payment”. The most important aspect of Part 447 – Payments for Services is the actual definition of a “clean claim”, which is “one that can be processed without obtaining additional information from the provider (hospital, HMO, including an MCO, or entity that treats or provides coverage or services to individuals for illnesses or injuries or provides services or items in the provision of health care) of the service or from a third party. It includes a claim with errors originating in a State’s claims system. It does not include a claim from a provider who is under investigation for fraud or abuse, or a claim under review for medical necessity”.
As with all things government, there is some fine print, especially when dealing with The Centers for Medicare and Medicaid Services. Specifically, let’s look at the timely processing of claims portion as defined throughout Part 447.
(1) “The Medicaid (medical assistance provided under a State plan approved under title XIX of the Act) agency must require providers to submit all claims no later than 12 months from the date of service.
(2) The agency must pay 90 percent of all clean claims from practitioners, who are in individual or group practice or who practice in shared health facilities, within 30 days of the date of receipt.
(3) The agency must pay 99 percent of all clean claims from practitioners, who are in individual or group practice or who practice in shared health facilities, within 90 days of the date of receipt.
(4) The agency must pay all other claims within 12 months of the date of receipt, except in the following circumstances:
(i) This time limitation does not apply to retroactive adjustments paid to providers who are reimbursed under a retrospective payment (Payment for inpatient RPCH services to a CAH that has qualified as a CAH under the provisions in paragraph (a) of this section is made in accordance with 413.70 of this chapter. Payment for post-hospital SNF-level of care services is made in accordance with the payment provisions in 413.114 of this chapter) system, as defined in § 447.272[2] (42 CFR § 447.272 – Inpatient services: Application of upper payment limits of this part).
(ii) If a claim for payment under Medicare has been filed in a timely manner, the agency may pay a Medicaid claim relating to the same services within 6 months after the agency or the provider receives notice of the disposition of the Medicare claim.
(iii) The time limitation does not apply to claims from providers under investigation for fraud or abuse.
(iv) The agency may make payments at any time in accordance with a court order, to carry out hearing decisions or agency corrective actions taken to resolve a dispute or to extend the benefits of a hearing decision, corrective action, or court order to others in the same situation as those directly affected by it.
(5) The date of receipt is the date the agency receives the claim, as indicated by its date stamp on the claim.
(6) The date of payment is the date of the check or other form of payment.”
Of course, the government has created some wriggle room for themselves by creating “waivers”, which means that they “may waive the requirements of paragraphs (d) (2) and (3) of this section upon request by an agency if he finds that the agency has shown good faith in trying to meet them. In deciding whether the agency has shown good faith, the Administrator (Administrator means the Administrator, Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA)) will consider whether the agency has received an unusually high volume of claims which are not clean claims and whether the agency is making diligent efforts to implement an automated claims processing and information retrieval system.
(2) The agency’s request for a waiver must contain a written plan of correction specifying all steps it will take to meet the requirements of this section.
(3) The Administrator will review each case and if he approves a waiver, will specify its expiration date, based on the State’s capability and efforts to meet the requirements of this section.”
The last part of this process is looking at Prepayment and Postpayment claims review to ensure a provider is not under investigation.
“(1) For all claims, the agency must conduct prepayment claims review consisting of –
(i) Verification that the beneficiary was included in the eligibility file and that the provider was authorized to furnish the service at the time the service was furnished;
(ii) Checks that the number of visits and services delivered are logically consistent with the beneficiary’s characteristics and circumstances, such as type of illness, age, sex, service location;
(iii) Verification that the claim does not duplicate or conflict with one reviewed previously or currently being reviewed;
(iv) Verification that a payment does not exceed any reimbursement rates or limits in the State plan; and
(v) Checks for third-party liability within the requirements of § 433.137[3] (42 CFR § 433.137 – State plan requirements) of this chapter.
(2) The agency must conduct post-payment claims review that meets the requirements of parts 455 and 456 of this chapter, dealing with fraud and utilization control[4].”
Shifting attention now to commercial payors, keep in mind that all states with the exception of South Carolina have rules requiring insurance companies to pay or deny a claim within a certain time frame, which vary from 30 to 60 days. The states refer to these as “Prompt Pay” Laws. Depending on the state, an insurance company may have a series of requirements and penalties to ensure healthcare professionals are paid within a reasonable time period.
Just as with the federal government, getting paid promptly requires “clean claims”. While most insurance companies will provide you with what they require on to be present on a claim form, in some states the Department of Insurance makes that determination.
Now, as with all things, payors create loopholes such as: not being able to pay; deny a claim because they require additional information such as documentation to support what was billed; or if there is another payor responsible for payment as the primary. However, even if this happens there are laws on the books that require them to make the request for additional information within a reasonable time frame and then to process the claim within the required prompt pay period once they have received the additional information.
In the event a payor fails to comply with the prompt pay laws of your state, you can go to the National Association of Insurance Commissioners (https://content.naic.org/). Scroll down to the bottom of the home page to “Insurance Departments” and use the drop-down to find your state. From there, it will link you to your state-specific information and assist you with filing a complaint.
Something to keep in mind when determining whether or not to file a complaint is that the prompt pay laws do not apply to “self-insured” plans, so they are not regulated by the state. However, they are governed by federal law(s).
[1] 42 CFR § 447.45 – Timely claims payment
[2] 42 CFR § 447.272 – Inpatient services: Application of upper payment limits
[3] 42 CFR § 433.137 – State plan requirements
[4] https://www.law.cornell.edu/cfr/text/42/447.272
