- What is the effective date of the provisions
of the revised prompt pay law 3901.381 et seq and what claims
are affected?
- The prompt pay law, including the interest requirements,
applies to claims that are submitted on or after July
24, 2002.
- Does the prompt pay law pertain to medical
payments coverage associated with auto insurance?
- No, the prompt pay law only pertains to dental, vision,
and health insurance claims.
- According to the prompt pay law,
only electronically submitted claims will be subject to the
prompt pay requirements effective 6 months after the final
implementation of the “Health Insurance Portability and Accountability
Act of 1996” (HIPAA).
What is ODI considering to be the effective date of HIPAA
to clarify when the statute only applies to electronic claim
submissions? Are time frames the same for small health plans
as defined in HIPAA?
- The date would be whatever date a particular third-party
payer must comply with HIPAA. Extensions may delay that
date. The timeframes under the prompt pay law are the
same for all third-party payers.
- What are the specific claim forms that
the Department considers to be “standard” as stated in the
regulation?
- The standard claim forms are prescribed in Ohio Administrative
Code Section 3901-1-59. This rule was amended October
28, 2002. (http://www.registerofohio.state.oh.us/index.jsp).
The standard claim forms are as follows:
- For institutional health care practitioners --
CMS Form 1450 (formally HCFA Form 1450). For purposes
of this rule, CMS Form 1450 inlcudes UB-82 or UB-92
and their successors.
- For health care practitioners billing for professional
services -- CMS Form 1500 (formerly HCFA Form 1500)
and successor forms as approved by CMS.
- For dentists – J512 Form
- For pharmacists – NCPDP Form 1983 or its successors
- How are claims to be treated when groups
or members have not yet paid the premium for the period covering
the service date of the claim?
- The Ohio Revised Code Section 3901.381 (B)(2)(a) states
in pertinent part:
“Supporting documentation includes the verification
of employer and beneficiary coverage under a benefits
contract, confirmation of premium payment, medical
information regarding the beneficiary and the services
provided, information on the responsibility of another
third-party payer to make payment or confirmation of
the amount of payment by another third-party payer,
and information that is needed to correct material
deficiencies in the claim related to a diagnosis or
treatment or the provider’s identification” (emphasis
added).
On its face, the statute specifically contemplates
that third-party payers will ask for premium payments
or confirmation of payment as part of the ordinary
claim processing procedure. Thus, requests for premium
payments should be considered as requests for supporting
documentation, which need to be made within the initial
30-day time period.
-
Would you please clarify how requests for
supporting documentation affects the 45 day time limit to pay
or deny a claim?
Scenario 1 (Multiple requests for supporting documentation):
June 2 -- Claim received.
- Date received not counted toward statutory time to
pay.
June 3 -- First day after receipt of claim: CLOCK STARTS.
- Beginning of the statutory time to pay.
June 19 -- Supporting documentation needed (other insurance
letter Is sent within the 30-day period after receipt of
the claim).
- Counted as a statutory day.
- 17 days applied thus far toward statutory time to pay.
June 20 -- First day following the last request for supporting
documentation made within the 30-day period after receipt
of the claim: CLOCK STOPS.
- Statutory time within which to pay is suspended.
July 9 -- Requested supporting documentation received: CLOCK
RESUMES.
- Statutory time to pay starts running again.
- A total of 19 days have been suspended (6/20 through
7/8).
July 14 -- Additional supporting documentation is needed
-- medical records are requested after the initially requested
documentation has been received
- Additional request for supporting documentation was
made outside of the 30-day period after the claim is
received.
- Time is not suspended (see 3901.381B(2)(a)).
- A total of 23 days have been applied thus far toward
time limit to pay.
July 28 -- Medical records received: CLOCK CONTINUES RUNNING.
- Still within the statutory time to pay.
- A total of 37 days have been applied toward time limit.
August 5 -- Payment due.
- A total of 45 days of "processing" used (not counting
the 19 days that were suspended waiting for supporting
documentation to be received).
August 8 - Claim processed and payment mailed.
- The date the claim payment is made is counted toward
the statutory time to pay. A total of 48 "processing" days
elapsed between the day after the claim was received
and the date payment was mailed (less suspended days).
A total of 3 days of interest is owed and must be included
as part of the original claim payment.
Scenario 2 (Multiple requests for supporting documentation
within the initial 30 day period after the claim is received):
June 2 -- Claim received.
- Date received not counted toward statutory time to
pay.
June 3 -- First day after receipt of claim: CLOCK STARTS.
June 6 -- First request for supporting documentation made
within the 30-day period after receipt of the claim is sent
(other insurance inquiry).
- Time is still running because this will not be the “last” request
for information within the initial 30-day period.
June 7 -- First day following the last request for supporting
documentation made within the 30-day period after receipt
of the claim: CLOCK STOPS.
- Statutory time to pay is suspended.
A total of 4 days have thus far been applied toward statutory
time to pay.
June 16 -- Response to request for supporting documentation
is received. CLOCK RESUMES.
- A total of 14 days have thus far been applied toward
statutory time to pay requirement.
June 28 –- Additional supporting documentation needed (medical
records are requested after the initially requested documentation
has been received).
- Time will be not be suspended since this is an "additional" request
for supporting documentation made after the initially
requested supporting documentation was received. CLOCK
CONTINUES RUNNING.
- Exception would be pursuant to 3901.381(B)(2)(b) if
this additional request was made due to a preexisting
condition, which was unknown to the third-party payer
and about which it was reasonable for the third party
payer to have no knowledge at the time of its initial
request. In that situation the time to pay would be suspended
until the supporting documentation is received and then
start back up again.
July 31 –- Additional supporting documentation requested
is received. Claim processed and payment mailed.
- A total of 50 "processing" days elapsed: 4 between
receipt of claim and the request made for supporting
documentation, and 46 days from second request the receipt
of the supporting documentation originally requested
and payment of the claim.
- Claim was paid outside of the 45-day statutory requirement,
therefore 5 days of interest is due.
Scenario 3 (Request for supporting documentation
leading to a pre-existing medical condition review):
May 5 –- Claim received.
- Date received not counted toward statutory time to
pay.
May 6 -- First day after receipt of claim: CLOCK STARTS.
May 28 –- Supporting documentation needed (other insurance
inquiry is sent within the 30-day period after receipt of
the claim).
- Total of 23 days has been applied to statutory time
to pay.
May 29 -- First day following the last request for supporting
documentation made within the 30-day period after receipt
of the claim: CLOCK STOPS.
June 17 –- Supporting documentation is received. CLOCK RESUMES.
- Time to pay the claim has been suspended 19 days.
- Clock thereafter runs 14 days.
June 30 –- As a result of the documentation received on June
17, a request is sent for additional supporting documentation
for a pre-existing condition review. Time would again be
suspended if the pre-existing condition was unknown and it
was reasonable that the third-party payer did not know of
the pre-existing condition at the time of its initial request
for documentation.
July 1 –- First day following request for additional supporting
documentation concerning a pre-existing condition: CLOCK
STOPS.
July 25 -- Additional supporting documentation concerning
pre-existing condition is received.
- CLOCK RESUMES.
- Time to pay the claim has been suspended 24 days.
- Clock thereafter runs 18 days.
August 11 -- Claim processed and payment mailed.
- A total of 55 processing days elapsed (not counting
the 43 suspended days).
- Payment was due on August 1 (45th processing day);
therefore, 10 days of interest is now due.
- How is interest to be calculated?
- The calculation of interest should be completed as
follows:
- Total Possible Annual Interest (TPAI) is calculated.
This is the actual total amount paid for the claim
in question multiplied by the 18% interest rate.
EXAMPLE
$150 x 18% = $27.00
(Amt. Pd.) (Int. rate) (TPAI)
- Daily interest amount (DIA) is computed. This
is the Total Possible Annual Interest (TPAI) divided
by 365 days (Days per Year).
EXAMPLE
$27.00/365 = .0740
(TPAP) (Days/yr.) (DPA)
- Interest Days (ID) are calculated. Interest Days
equal the number of days that have elapsed between
the statutory due date and the actual date payment
was/will be remitted. For purposes of calculation,
the date the payment is made equals the date the
payment was mailed or, for electronically submitted
claims, the date the payment was transmitted.
EXAMPLE
Actual Date of Remittance = 31st
First Date Payment Overdue = 22nd (First Date Following
the Due Date)
Elapsed time (Interest Days) - 9 Days
- Amount of interest to be paid is computed. This
is equal to the number of interest days multiplied
by the daily interest amount.
EXAMPLE
9 (Interest Days) x $.0740 (Daily Interest Amount)
= $0.67 (Interest Due)
This amount of interest must be paid at the time
the claim payment is made.
- Pertaining to interest calculation,
when considering the days that are late in the processing
of a claim, do we count business days or calendar days?
- Calendar days should be used when calculating interest.
- Is there interest due on interest that
is not paid timely?
- The law does not address any compounding of interest.
The 18% annual interest rate is to be calculated solely
on the days in excess of the statutory time requirement.
- Are member payable claims subject to
interest payments?
- The interest requirement is not limited to provider
claims. Therefore, interest is due when claims submitted
by beneficiaries are paid late.
- Can a provider appeal the calculation
of interest?
- The statute does not address appeals of an interest
calculation.
- If the wrong provider is paid on
the original payment and the claim is subsequently adjusted
and paid to the correct provider, is the interest payment
on the adjusted claim based on the original receipt date
of the claim?
- Interest would be based on the amount of the claim
payment when the claim is finally paid to the correct
provider. The original receipt date of the claim should
be used to calculate timeliness and interest.
- Do claims incurred by members insured
by an Ohio group, for services rendered in an out-of-state
facility fall under the statute?
- The statute does not exempt claims that are submitted
for services that are rendered out of state and the definition
of “provider” does not exclude non- Ohio providers. It
appears the statute applies.
- Is there a minimum threshold for
making an interest payment, i.e., $1.00?
- There is no minimum payment level provided by the statute.
- Do we use normal rounding practices
for interest calculations?
- Interest >= .005 means interest payment is $0.01.
- Interest <= .004 means no interest payment.
- The Department expects third-party payers to use normal
rounding principles to the nearest full cent.
- According to the prompt payment
law, claim payments are considered final two years after
original payment. How are claims to be treated that were
received prior to July 24, 2002?
- The “take-back” provisions in Section 3901.388 apply
to payments that are made pursuant to Sections 3901.381 – 3910.386.
Section 3901.381 applies only if a claim was submitted
on or after July 24, 2002. For example, the recovery
of a claim that was submitted and paid in August, 2002
would be subject to the notice and appeal provisions
in Section 3901.388. It appears that claims that were
submitted prior to July 24, 2002 would not be subject
to the provisions of Section 3901.388, even if it they
were paid after July 24, 2002.
- Advance notice must be given to
providers when an overpayment has been identified. It would
seem that this applies to claims received on and after July
24, 2002. Thus, are providers to be given advance notice
on some cases and not on others?
- It appears that the notice provisions in Section 3901.388
apply to any recovery initiated on a claim that was paid
pursuant to Sections 3901.381 – 3901.386 (i.e., claims
submitted on or after July 24, 2002). The Department
would encourage third-party payers to provide the same
notice for all recoveries.
- If a claim is paid twice to a provider
and the second payment includes interest, can the interest
amount be recovered?
- Assuming the first payment was proper and timely, a
recovery of the second payment could include the interest,
subject to Section 3901.388.
- If provider contacts an insurance
company and informs them of an overpayment, does the company
still have to give the provider 30 days to appeal the adjustment?
- Section 3901.388 applies to all recoveries of overpayments
and notice would have to be given. There are no exceptions
to the procedural safeguards of this section and Section
3901.388 (D) prohibits contractual provisions that negate
a third-party payer’s obligations under Section 3901.388.
The fact that the provider brought the overpayment to
the third-party payer’s attention also does not negate
the third-party payer’s obligations under the statute.
- A claim was submitted by a third-party
payer and was paid; however, the amount paid was not what
was expected. Should a provider file a complaint about this?
- The prompt pay law does not address reimbursement rates
or fees for services. The provider should exhaust all
appeal options and work with the third-party payer’s
provider relations office to resolve such issues.
- What authority does the Ohio Department
of Insurance have on reimbursement rates and can provider
complaints be filed when there are reimbursement problems?
- Typically, reimbursement rates are deemed to be private
contractual matters between the provider and the third-party
payer, which means we do not have authority to resolve
your complaint. The Department’s jurisdiction over insurance
matters is governed by what is set forth in Title 39
of the Ohio Revised Code (“R.C.”), which we must follow.
Ohio insurance law does contain some provisions that
touch on reimbursement; however, none of these laws govern
the actual amount of the reimbursement. For instance,
R.C. 3923.23 through 3923.234 contain a prohibition on
denial of reimbursement based on claims submitted under
the benefit provisions in an accident and sickness policy
or certificate [emphasis added]. These statutes do not
speak to negotiation of rates by providers contracting
with insurers in the marketplace to be participants in
a network. While we do regulate insurance policies and
certificates of insureds, we do not regulate the substantive
negotiation of provider contracts, which are not part
of the insurance policy or certificate.
Further, if the listed providers are legally licensed
to provide services described in the insurance policy
or certificate, R.C. 3923.23 through 3923.234 state that
reimbursement of the listed providers under the policy
or certificate [emphasis added] cannot be denied for
providing those services. In other words, even if the
insurer stated such a denial of reimbursement to these
listed providers in their policy or certificate, it would
be ineffective because it is contrary to what the law
allows.
Finally, Ohio Administrative Code 3901-1-7(C)(6) defines
as an unfair trade practice failure to offer claimants
amounts, which are fair and reasonable within policy
limits and in accordance with policy provisions. This
rule is geared to the insurance benefit contract (policy)
and its terms and limits. The rule does not speak to
the negotiation of rates of reimbursement in a provider
contract. The provider negotiates his or her contract
with the insurer or health insuring corporation or network
separately from the benefit contract or policy.
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