A Policy to Implement Procedures for the Timely Processing and Payment of Medicaid Claims |
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Issued and entered November 16, 2000 by Frank M. Fitzgerald, Commissioner of Financial and Insurance Services On June 20, 2000, Governor John Engler signed into effect Public Act 187 of 2000 (hereinafter the "Act"), which amended the Michigan Social Welfare Act, MCL 400.111a and 400.111b; MSA 16.490(21a) and 16.490(21b), and added MCL 400.111i; MSA 16.490(21i). In part, the Act requires the Commissioner of the Office of Financial and Insurance Services to establish a timely claims processing and payment procedure to be used by all health professionals and facilities in billing for, and qualified health plans (QHP) in processing and paying claims for, Medicaid services rendered. The timely claims payment procedures are applicable to providers of Medicaid services for QHP members only and not for fee-for-service benefits paid by Medicaid. The Medicaid managed care timely claims processing and payment procedure went into effect October 1, 2000 and may only be used for covered Medicaid services rendered on or after that date. For the purposes of the Act and this bulletin a "participating provider" is defined as an enrolled Michigan Medicaid provider, except where the term is specifically defined as a QHP contracted provider. This bulletin further describes a clean claim and identifies all items that must be included to be considered clean for the purposes of the Act. This bulletin outlines the process that must be used to file a clean claim to effect timely payment. This bulletin does not set policy or procedures for Medical Services Administration or override requirements for Medicaid contracts with QHPs. Finally, this bulletin outlines the process to be used by the QHP to pay a clean claim. These procedures will be used for adjudication of a clean claim with the Office of Financial and Insurance Services, Division of Insurance only. The Act sets time frames for billing and payment of clean claims. The Commissioner will adhere to the time frames, definitions, and processes established in this bulletin to determine if providers and QHPs have met the timely payment obligations required in the Act. Providers and QHPs must adhere to all time frames, definitions and procedures to be eligible for the protections of the Act. Providers must be enrolled with Medicaid in order to be eligible for the protections of the Act. The Commissioner will not accept a request for external review unless the requesting party fully complies with the time frames, definitions and processes found in the Act and this bulletin. However, failure of a provider to meet the timelines required in this process does not relieve the QHP from paying claims for covered services. CLEAN CLAIM DEFINITION MCL 400.111i, as added by the Act, requires that certain conditions be met for a Medicaid claim to merit the designation of "clean claim." The following information provides further guidance to providers and QHPs. These are the criteria the Commissioner will use to determine whether a Medicaid claim can be considered clean for the purposes of the Act: A health professional must submit claims using the data elements of the HCFA 1500 paper form. A health facility must use the data elements of the UB92 or any successor format that becomes the industry standard for filing facility claims in the future. At a minimum, each claim must include the following detailed information:
Other Procedural Requirements A QHP shall notify each Medicaid provider with whom it contracted of what is required before a claim is filed in order to get the most correct and complete information to the QHP when first filing the claim. A QHP shall make its policies and procedures for filing claims available electronically and by other means for non-contracted, as well as contracted providers. Both contracted and non-contracted providers are responsible for determining any requirements a QHP may have concerning the authorization of services and information required on a claim form. The Commissioner has established the following procedures as a standard to follow even before a claim is filed:
DATE OF RECEIPT In order for a Medicaid claim to be considered clean, it must be submitted to the QHP electronically, unless the provider does not currently have that capability. For claims incurred after June 1, 2001 only claims filed electronically by the provider will have access to claims adjudication under the timely claims processing and payment procedure of the Act. All QHPs must have current capability to accept Medicaid claims electronically. For purposes of compliance with the Act's timelines, the following procedures must be followed:
For electronically submitted claims: A clean claim must be paid within 45 days of the date of receipt. If the provider uses a clearinghouse for Medicaid claims processing, the date of receipt by the QHP will be the date the plan or the plan's clearinghouse receives control of the claim from the provider's clearinghouse. If the provider's clearinghouse returns the claim for incorrect or incomplete information, the provider will not consider the claim as received by the QHP and will not begin the 45 day count for payment. If both the provider and the QHP use the same clearinghouse, the date of receipt by the QHP will be considered the date on which the clearinghouse has determined pursuant to the contract with the provider that all ordered checks and edits are complete. When the QHP has received the claim, it has 30 days from that date to identify in writing to the provider any defects in the claim. If the claim is defective due to failure to comply with any of the established Medicaid clean claim requirements, the claim does not qualify as a clean claim. The required 45 day payment timeline for clean claims no longer applies. A QHP's written notice to the provider of the claim defect may be either through electronic transmission or on paper. The provider has 30 days from the date of receipt of the notice of defective claim to correct the defect and resubmit the corrected claim to the QHP. The QHP has 30 days from the date of receipt of the corrected claim to pay it if the corrected claim meets the definition of a clean claim. For paper claims until June 1, 2001: The date of receipt by the QHP will be the date the claim was mailed if the provider has proof of mailing. Otherwise, the date of receipt will be the date the QHP stamps or perforates on the claim when received in its office. The QHP has 30 days from the date of receipt to identify in writing any defects in the claim. If the claim is defective due to failure to comply with any of the established Medicaid clean claim requirements, the claim does not qualify as a clean claim. The required 45 day payment timeline for clean claims no longer applies. The provider has 30 days from the date of receipt of the notice of defective claim to correct the defect and resubmit the corrected claim to the QHP. The QHP has 30 days from the date of receipt of the corrected claim to pay it if the corrected claim meets the definition of a clean claim. FURTHER CLAIM REQUIREMENTS If a corrected claim that is returned to a QHP is still defective for the same or another reason, the QHP has 30 days from the date it receives the corrected claim to notify the provider of the remaining defect. The QHP will also notify the Commissioner of the defect on the required form. A copy of this form is attached to this bulletin. Upon receipt of any claim, if the QHP determines that 1 or more covered services listed on a Medicaid claim are payable, it must pay for those services and not deny the entire claim because 1 or more services listed are in dispute or are not covered. The provider must allow the QHP at least 30 days to provide notice of any reason for not paying the claim. If a nonpayment notice has not been sent within 30 days, the provider may assume payment will be made 45 days from date of receipt by the QHP. If a provider resubmits a claim before the 45 days elapsed, it will not be considered clean under the Act. If the claim or a service listed on a claim form becomes the subject of an adverse determination on payment, the provider may request an external review as outlined in MCL 400.111i(4) and (5) of the act as amended by the Act. Please note: Medicaid claims submitted for review by the Commissioner must be submitted with the proper form, one form for each claim. Claims may not be batched. A sample of the proper form is attached to this bulletin. All Medicaid clean claim disputes that come before the Commissioner will be reviewed using these standards:
A QHP's contract with Medicaid permits an arbitration process for claims in dispute between the provider and the QHP. This process is separate from the timely claims processing procedure set forth in the act and in this bulletin. However, a provider must choose only one process to pursue payment of a claim - either the Medicaid arbitration system or the provisions of 2000 PA 187. The Commissioner will not accept for review grievances submitted to the arbitration system under the State Medicaid contract with QHPs. Under the authority to establish the timely claims processing and payment procedure, the Commissioner may assess penalties to be applied to health professionals, health facilities and QHPs for their failure to comply with these procedures. Consequently, after review, if the QHP has violated the timely claims payment process, costs incurred by the Commissioner for IRO services used in the adjudication of the claim may be assessed to the QHP. Similarly, a health professional or health facility may be assessed a similar penalty if it is found the QHP has rejected a claim for cause and has not violated the Act. Other penalties may be assessed as appropriate for persistent violations under Chapter 20 of the Insurance Code (MCL 500.2001 to 500.2093; MSA 24.12026 to 24.12093) as an unfair trade practice. Any questions regarding this bulletin should be directed to:
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