Catch 22 Renumbered

Texas Physicians Frustrated by Clean Claim Requirements

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Medical Economics Feature -- March 2002

By Walt Borges
Associate Editor

In Joseph Heller's Catch 22, Captain Yossarian could not persuade his superiors to send him home on an insanity discharge no matter how he acted because, as the Catch 22 logic went, all sane men would do whatever they could, including acting insane, to avoid war.

Many physicians find the same elements of half and circular logic embedded in the rules that govern the definition of a clean claim, especially in the wake of insurers' increased scrutiny of claims following the Texas Department of Insurance's (TDI's) stepped-up enforcement of the state's prompt pay law. The "catches" on the standard Health Care Financing Administration (HCFA) Form-1500 are four blocks (sometimes referred to as boxes or fields) that seek dates for current and similar illnesses, a code for a type of service, and the location where medical services were provided.

Because submitting a clean claim triggers the prompt payment law, the Texas Medical Association has long urged physicians to take great care in completing and filing the claim form so that it qualifies as "clean." But the insurers' new claims scrutiny now makes that even more important.

"We realize that some of the fields on the HCFA-1500 form may seem not to be applicable," said Robert Gunby, MD, chair of TMA's Council on Socioeconomics. "But we must learn to play the game, or insurers will continue to legally withhold our money and cause great stress for physicians' practices."

Many Texas physicians, practice managers, and claims staff believe insurance companies are delaying payments to help offset losses caused by faulty actuarial predictions and cut-rate premiums designed to capture market share but not to adequately cover health care costs and insurer profits. Add to that the fines and restitution that 21 insurance companies and health plans are paying for violating the prompt pay law, and insurers have every motivation to find ways to deny or delay claims payment, physicians charge.

The insurance companies, however, argue that they are trying to comply with state law and regulations that have grown increasingly complex and that they pay the vast majority of claims on time, whether the claims are clean or not.

Leah Rummel, executive director of the Texas Association of Health Plans (TAHP), estimates that 96 to 97 percent of clean claims in Texas are paid within the 45-day limit set by the Texas Legislature in 1999.

Pat Hemingway Hall, president of Blue Cross and Blue Shield of Texas (BCBS Texas), says that 99 percent of the claims submitted to the company are paid within 45 days and that many of the paid claims are not clean. The average claim is processed within six days, Ms. Hall says.

But another insurance industry official recently told TMA representatives that only 4 percent of the claims filed with his company meet the clean claim requirements that trigger the prompt pay provisions.

Payment delays occur most likely when "claims require investigation because all the information necessary to determine contractual coverage is not included on the claim," Ms. Hall said.

"Our success over the years has been based on our paying physician and hospital claims accurately and promptly, and we will continue to work to improve our processes to do so," Ms. Hall said, adding that BCBS Texas is "committed to providing exceptional claims-paying service as the core of our business."

Catch 14 and Catch 15: 'When?' Is the Question  

Many physicians and practice administrators say the most problematic clean claim requirements are the rules requiring blocks 14 and 15 to be filled out. Block 14 asks for the date of the first symptom of an illness, the date of occurrence of an accidental injury, or the last menstrual period for pregnancy. Block 15 asks for the first date of same or similar illnesses. The information helps insurers assess whether the treatment is excluded from coverage as a pre-existing condition.

When TDI was drafting the clean claim rules in 1999, TMA, the Texas Hospital Association, and TAHP recommended they reflect the Medicare requirement that block 14 be completed only for automobile accidents or work-related injuries. Block 15 is required for payment by Medicare or Medicaid. Medicaid and Medicare payments are not subject to the state prompt pay law and clean claim rules.

When TDI published the final rules, however, both blocks 14 and 15 were required, and TMA has been working since to make them optional.

Critics of the clean claim rules say simply getting the information and putting it down correctly are the main problems with requiring completion of blocks 14 and 15. In October, Marjorie Thomas, office manager for Allen gynecologist David E. Rogers, MD, a member of TMA's Council on Socioeconomics,asked BCBS Texas for guidance in filling out the blocks for a patient who reported irregular menses.

Ms. Thomas said in a letter to the company that there was no problem with requiring the current date for a pregnancy or injury because the onset likely would be recorded in the medical record. But illnesses presented another problem, especially if they involved occasional recurrences.

For example, Ms. Thomas pointed out, there was no exact date that the patient's menses became irregular, and she asked if Dr. Rogers was required to review 17 years of medical records to find a similar incident. What if the patient had two late menses in 1985? Ms. Thomas asked. Does that constitute a similar illness?

Dr. Rogers also was concerned that when a patient is referred to him, the claim rules require him to supply information held by the referring doctor that may be privileged, Ms. Thomas wrote. The physician and his staff also were concerned that supplying the wrong date for the start of the illness might be perceived as fraud.

Even if block 15 was filled in, Ms. Thomas wrote, "the determination of what constitutes an excluded condition needs to be made by the insurance company as it is part of the business of insurance. … Not every policy is subject to pre-existing clauses. You would know the percentage of policies with pre-existing clauses in effect better than anyone. Is it really practical to require completion of a field on all claims that has the potential to affect this group only?"

BCBS Texas responded in a letter from Renea Stuart, manager for provider customer service. She replied that "it is the physician's responsibility to supply the most appropriate date or dates in fields 14 and 15. The information could be obtained from the patient directly, the medical record, or the referring physician." She suggested Ms. Thomas discuss her concerns with Dr. Rogers to develop alternative ways to gather the required information.

Ms. Stuart acknowledged that insurers must complete a review for pre-existing conditions even if blocks 14 and 15 are completed. "Prompt pay legislation mandates insurance companies to pay, deny, or audit a claim within 45 days of receipt," she wrote. "This time frame does not allow for investigation of a pre-existing condition before payment is made in some situations."

Dr. Rogers, in a December 2001 letter to Texas Insurance Commissioner José Montemayor, noted that many patients work for large companies with group health coverage that has no exclusions for pre-existing conditions, "making the boxes totally irrelevant, superfluous, and meaningless data fields."

In her letter to Dr. Rogers, Ms. Stuart said BCBS Texas would follow the TDI requirements and not pay the claim unless the blocks were filled in. "For claims to be processed as accurately and timely as possible, the same fields should be recorded on every claim," she said.

In written responses to Texas Medicine questions in January, Ms. Hall added that, "For claims in which the information is needed to determine contractual coverage, BCBS Texas requires the information to be provided in compliance with the [TDI] regulation. This does not include claims from radiologists, pathologists, anesthesiologists, and laboratories."

TDI tells physicians, via a "Frequently Asked Questions" segment on its Web site (, that blocks 14 and 15 must be filled out unless the contract between physician and insurer states otherwise. TDI's advice to physicians is to first check their contracts for directions on how complex situations should be handled.

What TDI Says  

The TDI Web site lists three common situations that challenge physicians and their staff. The first occurs when patients receive preventive care without showing any symptoms of illness. TDI says physicians may use the date of service in both blocks 14 and 15 in this scenario.

A second situation arises when a patient has multiple medical problems that begin on different dates. TDI says physicians may list the onset date for the primary medical problem that prompted the visit or treatment.

In the third scenario, a physician may not have direct access to a patient. For example, a cardiologist reading an electrocardiogram (ECG) may not see patients, but TDI advises that information for blocks 14 and 15 can be filled out from the patient's medical record or by having the technician who conducts the ECG question the patient.

Only when a technician or physician does not see the patient or the record will TDI allow the "rare" exception of using the date of the test or treatment to fill out the claims information.

TDI official Audrey Selden, in a December 2001 e-mail responding to a TMA question about how to provide the information for long-standing conditions, said doctors "should make a diligent effort to obtain complete and accurate information" by first asking the patient to recall dates. If that fails, a review of medical records could yield the information, Ms. Selden wrote. "In some instances, the physicians may call a former health care provider or use the date the physician first saw the patient for that condition," Ms. Selden said.

Catch 24C: Code Breaking  

The problem with block 24C, physicians say, is that it requires knowledge of two-digit service codes usually used for Medicaid claims. But TDI failed to adopt those codes as part of the clean claim rules, leaving a sense of uncertainty among physicians and their office staff.

Medicaid, but not Medicare, requires block 24C. TMA did not support its use as a required element.

TDI suggests physicians check the health plan's provider manual for coding tips, and examine the HCFA Common Procedure Coding System and the Texas Medicaid Provider Procedures Manual at .  

TDI acknowledges that this information is not required by many nonregulated plans (some health indemnity, Medicare, Medicaid, and employer self-funded plans) in Texas and suggests that physicians participating in regulated plans try to remove it by contract.

"If a physician and a carrier agree that this element is no longer necessary, then they can enter into a contract that excludes block 24C as a required element," TDI suggests on its Web site. 

Catch 32: Facility Where Services Were Rendered  

Block 32 is one of those delightfully misleading contradictions caused by the interface of plain language, law, and rule making that any literate and sentient person, not just a doctor, can appreciate.

On the HCFA-1500 form, the block is labeled "Name and Address of Facility Where Services Were Rendered (If other than home or office)." By the plain reading of its label, the block is conditional.

Wrong. Block 32 must be filled out to complete a clean claim for Texas health insurers under TDI's clean claim rules.

"This information is a required field for TDI's clean claim rules, as well as for Medicare and Medicaid," TDI asserts on its Web site, then seemingly contradicts its assertion by stating: "The other primary users of the HCFA-1500 require completion of block 32 for appropriate filing purposes."

TMA Health Care Financing Director Teresa Devine says that means both federal programs consider block 32 to be required only when, as the label states, the treatment was rendered somewhere other than home or office.

TDI does suggest that physicians may fill in the word "Same" to refer to the information in the block that gives their name, address, and telephone number.

Some physicians caught on quickly when their claims were rejected for block 32 problems. Computer programmers were quickly called in to alter claim-submission programs to place the treatment location and address in the block.

"Changing software to address any of the claims problems is not easy or cheap," noted Ramona Bogard, director of managed care for the North Texas Heart Center in Dallas. "It takes a major merging of the computer minds."

Phil Russell, chief executive officer of South Texas Radiology Group in San Antonio, took the same route. Problems were resolved "when our software vendor reprogrammed our claims programs to drop data into the blanks on the form," Mr. Russell said.

Ms. Thomas, the Allen office manager, says many claims were paid without box 32. "Apparently, the plans we contract with didn't see that as an issue," Ms. Thomas said. "We changed our programs to make sure 'same' is the default when the claim form is filled in on the computer."

Physicians Want Change  

TMA has urged TDI, legislators, and the governor to eliminate the stumbling blocks to clean claims and prompt pay. But health plans are resisting quick changes not based on consensus among physicians, other providers of health care, and health plans.

Ms. Hall says BCBS Texas wants to work with physicians to improve the process through education of physicians and office staff. The company has developed a newsletter to be mailed to physicians' offices to address claims-filing issues, she says.

TDI has established the Clean Claims Working Group, which is to recommend revisions to the clean claim rules. The group will discuss the required elements of the HCFA-1500 form at its June 13, 2002, meeting.

TDI also is taking the educational approach, offering workshops and seminars for both physicians and insurers.

Still, physician frustration is mounting and is shared by practice managers who must keep the practice income flowing.

On Jan. 4, McKinney family practitioner George W. Childress, MD, expressed his frustration with the clean claim requirements in a letter to Gov. Rick Perry.

Noting that he had attended a TMA-sponsored clean claim seminar, Dr. Childress told the governor that the experience "clearly illustrated how a 'clean claim' is truly an oxymoron and a total canard."

Dr. Childress said the requirement that all fields be filled out creates a dilemma for doctors.

"This places the physician's office in a completely untenable situation," he wrote. "Should they: 1) leave a field blank or make an unacceptable but truthful entry and hope the claim is not denied; or 2) make an entry that will likely be acceptable, but is not the truth, and thus commit fraud?"

In his letter to Commissioner Montemayor, Dr. Rogers made another point that many physicians recognize. He wrote that when the state allowed Texas insurers 45 days to pay a clean claim, it did so "for the express purpose of allowing carriers more opportunity to collect information about pre-existing conditions or primary coverage." 

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