Contract Clause of the Month: Managed care contracts and regulations can be a jungle of legal language, and physicians who do not carefully pick their way through the various clauses can be in for a nasty surprise. In this monthly feature of Texas Medicine , the TMA Office of General Counsel identifies some of the contract clauses or regulations of which physicians should be aware.
According to House Bill 610, a health maintenance organization (HMO) or preferred provider organization (PPO) must pay or deny a clean claim within 45 days after receiving it. It may decide to audit the claim, in which case it must pay 85% of the contracted rate within 45 days. This requirement to pay, deny, or audit applies only to physicians who have contracts with the HMO or PPO.
The Texas Department of Insurance (TDI) recently published a rule defining a "clean claim." It requires certain data fields on the HCFA 1500 form to be completed for the claim to be "clean." These are referred to as "essential data elements." Other data elements on the HCFA 1500 are only required when certain conditions apply.
In addition to the essential and conditional data elements, the rule permits an HMO or PPO to require additional data elements to be filled out before a claim will be considered clean. The HMO or PPO must provide the physician with proper notice before imposing these additional data elements.
The rule also allows an HMO or PPO to require that a claim be accompanied by an attachment before it will be considered clean. As in the case of additional data elements, the HMO or PPO must provide notice before requiring the attachments.
Some problems may arise under the proposed rule. For example, many patients will not be insured under more than one health benefits plan or insurance policy. According to the rule, if the HCFA 1500 form indicates the patient does not have any other insurance, the claim is not "clean" unless it is accompanied by a document signed by the patient indicating that he or she does not have any other health care coverage.
This documentation requirement creates at least two problems. First, requiring the documentation will transform many electronic claims into paper claims. Second, many physicians may file claims without knowing that they are required to attach signed documentation corroborating the absence of other insurance. Thus, many of their electronically filed claims will not be clean and need not be paid or audited within 45 days.
Although an HMO or PPO could waive the documentation requirement, it could take the position that the claim would have to be resubmitted with the signed documentation in order for the plan to be obligated to act under the 45-day statutory deadline. This resubmission will, at best, cause delays in obtaining payment and may even contribute to the physician failing to meet contractual filing deadlines.
Due in part to resistance from TMA physicians, TDI has since issued a proposed amendment to the rule that would not require the supporting documentation when no other health insurance coverage exists. The proposed amendment states that if the HCFA 1500 indicates the absence of any other insurance, then a clean claim need not be accompanied by supporting documentation if the physician has on file a document signed by the patient within the past 12 months. Although the submission of the signed document is not an essential data element, a copy of the signed document shall be provided to the HMO or PPO upon request.
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