Physicians Say Some Health Insurers Demand Too Much Info for a Clean Claim
Medical Economics Feature -- September 2002
By Walt Borges
What if? A radiologist submits a bill to a health plan for reading the x-rays and scans of a hospital emergency room patient injured in an auto accident, only to find that after 45 days there is no payment for the services. The patient's health insurer says the claim is not "clean" because the radiologist -- who saw the film, but not the patient -- failed to fill out an accident questionnaire and attach a police report on the accident.
This scenario may sound far-fetched, but it's not. It could happen to physicians contracted with National Health Insurance Company of Dallas. National Health notified physicians on June 27 that it would require them to file accident questionnaires, patient statements about the accidents, and police accident reports to ensure a clean claim. The new requirements take effect 60 days after physicians receive the notice.
Audrey Selden, the senior associate commissioner in charge of prompt pay enforcement for the Texas Department of Insurance (TDI), said in late July that the accident report requirement clearly was beyond the limits set for health insurers in an April 2002 bulletin. As it does with all health insurers who set invalid requirements, TDI will ask National Health to withdraw and rewrite its clean claims requirements.
Responding to a TMA inquiry on July 24, National Health President G. Scott Smith initially acknowledged that the notice letter was "poorly worded" and said the company would move promptly to clarify the requirements.
In subsequent written comments, Mr. Smith said National Health was only seeking "information necessary to process the claim. The sooner we have the information, the sooner the claim can be paid. We ask the provider to give us the information -- as the [prompt pay statute] allows -- to the extent that the provider has it.
"TDI has asked us to respond to a provider's complaint about the letter," Mr. Smith wrote. "But we believe our letter requires nothing outside the [prompt pay statute]. If changes are needed to clarify, we will certainly make them."
TDI's quick response to the complaint is appropriate, one TMA official said.
"We appreciate TDI's efforts to simplify the claims form and rules to eliminate prompt pay problems," said Robert Gunby, MD, chair of TMA's Council on Socioeconomics. "Our goal has been to ensure that the clean claim definitions do not become more complex and do not lead to more loopholes for insurers."
Still, in the conflict between physicians and insurers over what constitutes a clean claim, the need for vigilance remains. Ms. Selden says TDI required at least three insurers to withdraw and rewrite excessive requirements at TDI's request, and several others' requirements have sparked complaints from medical practices across the state.
"We would be interested in hearing about any that TMA or its members come across," she said.
Most Texas physicians are aware that prompt payment of claims depends on their ability to file a clean claim bearing information and records required by the patient's health insurer. If a medical practice submits a clean claim, the insurer has up to 45 days to pay it. If the claim's validity is not determined within that period, the insurer must pay the physician or practice 85 percent of the contracted rate for the treatment or procedure.
However, insurers are not bound to a particular set of required elements to classify a claim as clean. Each insurer can set its own additional elements, effective 60 days after giving written notice to its contracted physicians.
TDI is charged with monitoring the notices to make sure they comply with state law and agency rules.
Pacific Life: Too Permissive
In early January, David R. Schmidt, MD, an orthopedic surgeon in San Antonio, complained to TDI about the notice he received from Pacific Life and Annuity. It demanded additional elements he saw as essentially open-ended.
After listing a number of new requirements, Pacific Life stated, "While each of the elements may not be required in all claims submitted, we do require this information in the evaluation of specific claims."
For many doctors, the Pacific Life letter was an example of how insurers can add to a medical practice's paperwork and staff time by asking for records that are irrelevant to the claim.
TDI responded to Dr. Schmidt by pointing out to Pacific Life that state law and TDI rules do not allow the "permissive language" in the letter. Pacific Life agreed to send a revised notice retracting the permissive language and providing a specific list of additional clean claim elements.
"A carrier cannot list information that it may require as additional clean claim elements or attachments and then deny the claim as deficient for failing to include a 'potential' attachment or additional clean claim element," Ms. Selden explained in a letter to Dr. Schmidt.
TDI followed up the letter by releasing a policy statement to insurers in Commissioner's Bulletin No. B-0012-02.
"It says you can't give us this laundry list of things that might be a clean claim element, and more importantly, it has to be an item that's in, or in the process of being incorporated into, the patient's medical or billing records," Ms. Selden said.
When elements don't meet that test, TDI "is going back to the carriers to have them change it," she added.
The new National Health requirements include the completion of the accident questionnaire and properly filled out claim forms, medical records, a patient's statement, and the amount paid by primary insurers.
Mr. Smith says the letter to physicians sought only information already contained in physicians' files. He said the letter's reference to TDI regulations authorizing the clean claim rules "gives everyone -- providers, insurers, anyone -- the contours and limits of what is required."
However, the letter only refers to the regulations in citing the legal authority for sending the letter. Nowhere in the letter does National Health suggest that physicians are being asked only for material contained in their medical or billing files.
"This notification is being sent to you in accordance with the provisions of the Texas Department of Insurance 'clean claim' regulation (28 TAC 21.2801, et al)," the National Health letter stated. "Please be advised that National Health Insurance Company considers a 'clean claim' to be composed of the following elements: . . . "
The listed elements included the claimant's statement and accident questionnaire.
The notice letter prompted one radiology group to complain to TDI that the requirements imposed "undue hardship on the billing practices of this practice." The group asked not to be identified.
"As hospital-based physicians, we do not have the opportunity to obtain a 'Claimant's Statement,' an 'Accident Questionnaire' or 'Medical Records,'" the group administrator wrote. "We do not receive billing information for our hospital-based radiologists' services until they are completed and the patient has left the hospital. We would have to attempt to reach a patient weeks after the exam is completed and wait for a completed form to be returned to our office from the patient."
Mr. Smith initially said all the company really needs from the physician to process the claim is the claim form correctly filled out.
"We would like to get the other information if it is in the provider's files, but it is not a requirement for a clean claim," he said, adding that the patient is responsible for providing the accident information.
"We expect providers to give us information to the extent they have it in their files," Mr. Smith said in his subsequent written comments.
Ms. Selden said patients should provide accident information to their insurers because requiring a patient to submit an accident report is standard procedure for insurers. "That is not a requirement for the physician or provider to take on," Ms. Selden noted.
If a patient is in an accident, the patient will always need to file the accident report or other required data. If the patient fails to provide the required information, the physician may have to reimburse the insurer.
"Remember, if the claim is clean and the carrier is awaiting the accident report, and if we get to 45 days [since the receipt of an otherwise clean claim], the carrier must pay the physician an audit payment at 85 percent of the contracted rate for the billed treatment or procedure," Ms. Selden said. "The insured also has certain time requirements to get that information to their carrier. If that patient never came up with that accident report, the insurer may not owe on that claim, and there may be a recoupment."
Mr. Smith says his company makes the 85-percent audit payment to physicians, but sometimes will go ahead and pay the full amount that would be due when the patient files the report.
World Insurance's List
On June 19, Omaha-based World Insurance sent Texas physicians a list of eight additional clean claim elements. The list included operative reports, medical records for claims incurred in the first two years of World Insurance coverage, pre-and postoperative photographs, lab and x-ray reports, prescription and statements of medical necessity, and dental records when applicable.
TMA Health Care Financing Director Teresa Devine says that requiring operative reports and medical records if the patient otherwise qualifies for coverage may be unnecessary in some cases.
World Insurance also sought to have physicians provide information on other insurance covering each patient for whom a claim is submitted. Ms. Devine noted that some physicians do not have access to those records because they do not see patients directly.
The insurer also required doctors to report the "repriced" amounts from other preferred provider organizations (PPOs). PPO payments are "repriced" when they are paid to physicians through a third party such as an independent physician association or network, which by contract takes a portion of the medical fee for the services it provides.
Ms. Devine also notes there is no place on the standard claim forms to report the repriced PPO payments.
Ms. Selden says the World Insurance requirements warrant further investigation. "The question you have to ask is, 'Is this something in the medical or billing record?'" she said. "Operative notes? Yes, it's okay, but is it excessive? That information is usually sought to determine whether [the patient] has coverage or for a unique procedure, to check out whether it was cosmetic."
Requiring repriced PPO information, Ms. Selden said, "sounds incorrect, but I don't want to rule out the possibility since there are many different PPOs" with different requirements.
World Insurance officials did not return telephone calls about the letter.
What Happens Under HIPAA?
While the Texas Department of Insurance (TDI) is addressing current prompt pay problems, it also is planning to address another prompt pay roadblock that could appear in October 2003.
On Oct. 16, 2003, the Health Insurance Portability and Accountability Act will require claims to be filed on a new electronic form designed to provide a single national standard for electronic filings. The challenge for doctors using the new Form 837 is that state prompt pay laws may not keep pace.
Teresa Devine, TMA's health care financing director, says Form 837 will contain detailed information not included on the current paper or electronic versions of Form 1500 established by the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration). State prompt pay laws and rules were crafted with the HCFA-1500 form in mind, and would not provide much guidance for the filing of new claims once HIPAA goes into effect, Ms. Devine says.
"I know we've begun research on how all that is going to affect prompt pay," said Audrey Selden, senior associate commissioner in charge of prompt pay enforcement for TDI. "There is likely to be some amendment of clean claim rules to address the changes in the form," she said.
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