Clean Claims New rules offer hope for physicians

by Shellie Pruden, DCMS director of medical practice relations

Thanks to House Bill 610, the Texas Department of Insurance has the authority to assist physicians with the prompt payment of claims. After a lengthy rule-making process, we now have a definition of clean claims, along with rules for claims being paid.

Clean claims consist of:

• specified data elements on Health Care Financing Administration claim forms;
• attachments specified by contract, manual, or other document, or proper notice;
• additional elements that are identified by contract, manual, or other document or notice;
• coordination of benefit or nonduplication of benefit situations; and
• the amount paid as a covered claim by the primary plan or other coverage.

As you can see, it all comes back to what's specified in the contract.

TDI states that when a claim is filed, preferred provider carriers and HMOs can take one of five actions when a clean claim is submitted for services, treatments, or supplies rendered or provided to their insured/enrollee. The five actions are:
1. Pay the total amount of the claim in accordance with the contract between the physician or provider and the HMO or preferred provider carrier;
2. Deny the claim in its entirety;
3. Pay a portion of the claim that is not in dispute and deny the remainder of the claim;
4. Pay the portion of the claim that is not in dispute and audit the remainder of the claim. If the audit cannot be completed within 45 days, pay the physician or provider 85 percent of the contracted rate on the portion of the claim that is being audited; or
5. Audit the entire claim. If the audit cannot be completed within 45 days, pay the physician 85 percent of the audited claim.

These rules do not apply to capitation agreements.

If the carrier fails to comply with the rules, a physician may recover the billed charges submitted on the claim or the amount payable under the contracted penalty rate, less any amount previously paid or any charge for a service that is not covered by the health plan. Reasonable attorney fees may be recovered if an action must be taken to recover payment. The administrative penalty for violation of the code can be up to $1000 for each day the claim remains unpaid.

Contracting, notice, and recoupment or chargebacks are areas within these rules that need particular notice. Although the rules are designed to protect physicians, that protection may be subjugated by your contract with the carrier. This is especially true of the penalty provisions defined in the bill. The rules require language in the carrier contract that provides for prompt payment to a physician (for covered services rendered) not later than 45 days after the date a claim is received, with the documentation reasonably necessary to process the claim. TDI requires that the carrier specifically define the data elements and documentation necessary to define a clean claim. If a carrier requires an address change for claims filing or additional elements to consider claims clean, these contract changes need only a 60-day notice. It would not support a rule requiring this notice to be delivered via certified mail, return receipt requested, or by courier delivery with a signed receipt. The rule allows carriers to develop the most "effective and efficient" delivery method. You may, however, negotiate how notice is delivered in your contract.

Recoupment and chargebacks traditionally are an accounting nightmare. Under the new rules, carriers may still recoup monies paid to the physician if the physician has been inappropriately paid. Although not the only means of recoupment, TDI believes that a chargeback may be the most efficient means of handling an overpayment. You may negotiate into your contract the guidelines for the most efficient and appropriate method of handling overpayment. HB 610 requires any refund due the carrier be paid no later than 30 days after the later of the date that the physician receives notice of the audit results,or any appeal rights of the insured/enrollee are exhausted.

The DCMS Managed Care Committee, with the TMA, is designing educational forums for our membership to be held in July to prepare for the Aug 1 effective date of these rules. More information on these forums will be available on the DCMS Web site and in the July DMJ.

TDI has promised to monitor the claims payment process closely. After Aug 1, if you believe an extraordinary amount of the claims you file are audited or you must submit an unusual amount of information to get a claim paid, contact Shellie Pruden, DCMS director of medical practice relations, at 214-948-3622 or shellie@dallas-cms.org, or submit a TMA Hassle Factor Log. DCMS and TMA will work closely with TDI to help you.