TDI-ordered Restitution So, where's the check?

by Shellie Pruden, DCMS director of medical practice relations

The Texas Department of Insurance fined eight health plans $10.4 million and ordered restitution to providers for not paying claims within the statutory 45-day time limit. Fines were levied against Aetna, Blue Cross and Blue Shield, Cigna, Humana, One Health Plan, Texas Health Choice, Unicare, and United Healthcare. At press time, enforcement actions against PacifiCare and 30 additional PPOs were pending. The restitution order forces these insurers to pay penalties of billed charges, or the contracted penalty rate for all claims not paid correctly or within the 45-day time limit. So, where’s your check?

Texas physicians likely will see little relief with this restitution order. Two reasons—physicians aren’t filing clean claims, and, on the off chance that a practice is filing clean claims, TDI has allowed the health plans to negotiate lesser penalties. When the Legislature passed HB 610 in 1999, the statute required TDI to define the elements of a clean claim. The definition that became effective for services performed after Aug 1, 2000, is problematic, at best. It requires information that may not be available to a practice. This is especially true of wellness checks, immunizations, and services provided by pathologists, radiologists, and anesthesiologists. In addition to a problematic TDI definition, plans were allowed to create their own definitions and penalties. The only guideline required plans to give physicians 60 days’ notice before the changes took effect. As a result, physician offices would be required to manage dozens of definitions, creating an impossible situation. Because the plans seemingly had enough information to adjudicate the claims, few practices changed their systems to accommodate the new requirements. In the August TDI Prompt Payment workshop for providers, one expert panelist even commented, “If it’s good enough for Medicare, it’s good enough for clean claims.” Given the significant financial impact of fines and restitution, this certainly is not true.

Have you been filing clean claims? Here is a test: Audit a batch of HCFA 1500 forms submitted to a commercial plan. Are boxes 14 and 15 completed? Not only is the information required, it must be accurate. If the claim passed the first test, check for any additional markings, circles, or “instructions,” such as refiled claim, 2nd request, or corrected claim. Although plans have enough information and continued to adjudicate claims, claims that do not meet the requirements are not protected under the prompt payment statutes. As a result of the recent TDI action, plans will scrutinize all claims not paid within the 45 days to avoid paying penalties. It’s important to understand that the plans are meeting the statutory requirements. Plans are not required to notify a physician that a claim isn’t “clean.” Not paying a claim within 45 days doesn’t automatically convert it to clean. Nor are plans required to pay “billed charges.” In Section 21.2802 of the Texas Insurance Code, TDI defines billed charges as usual and customary (as defined by the plan) and “not billed” charges as submitted on the claim.

This penalty provision may have been changed in your contract to include interest rather than billed charges or usual and customary. If you find claims that met the health plans’ contractual requirements for a clean claim and were not paid within the 45 days, TDI is allowing the health plans to negotiate lower penalties. Texas Health Choice distributed a request for physicians to waive rights to any penalties owed for not paying claims within the 45-day time frame. It is within a physician’s rights to accept, negotiate, or deny any waiver presented by a health plan. Blue Cross and Blue Shield has started returning claims that do not have box 14 and 15 completed, deeming them unclean. These actions will not be unique.

Texas Medical Association has made available template cards that show the required and conditional HCFA 1500 fields for Medicare and commercial health plans. TMA members candownload the templates, along with explanations of the conditional fields, from the TMA Web site at www.texmed.org. The templates were distributed in the January 2001 issue of Texas Medicine and will be distributed as a part of a “Clean Claim Kit” to every TMA member in early 2002.

In addition, the DCMS Managed Care Committee, chaired by Presley M. Mock, MD, will provide three educational workshops in the next year to assist member physicians with filing clean claims.