Many of The Phia Group’s clients feel that they are caught between a rock and a hard place. Either they thoroughly process a claim, confirming coverage in accordance with the terms of the applicable plan document, or they get claims paid within deadlines set by prompt payment laws. The bottom line is that many administrators feel they cannot do their job in the time they are forced to work with.

The Phia Group is defending our clients’ right to review clean claims before determining matters of eligibility.

The only way a plan administrator can analyze a claim is if the claim is a “clean claim.” To an administrator, a clean claim is one that includes relevant details and documentation adequate to determine whether the claim is actually payable by the Plan, or excluded. State and Federal laws exist which assign deadlines to claims administrators once a clean claim is received; but that begs the question – what is a clean claim? The definition of a clean claim varies. PPO network agreements, for instance, often define a clean claim as merely one that adequately fills a HCFA or UB-92 form. What is often forgotten are data elements, legibleness, accuracy, and complete details. While a HCFA or UB-92 form will adequately convey the type of claim submitted, they fail utterly to define the origin of the condition.

Medicare, meanwhile, defines a “clean claim” as a claim that has no defect, impropriety, lack of any required substantiating documentation or particular circumstance requiring special treatment that prevents timely payment. 42 C.F.R. § 422.500

Victoria C. Bunce, Director of Research and Policy with the Council for Affordable Health Insurance, posted in 2002 an article regarding clean claims and prompt payment laws which is as relevant today as ever before. The entire article may be viewed at http://www.cahi.org/cahi_contents/resources/pdf/dirtysecrets.pdf (click here to view the entire article).

She writes, “At times the provider submits incomplete information, leaves off salient data, miscodes procedures, or even makes a mistake in the patient’s name, time of treatment or medical condition. When this happens, the insurer has to recheck the information,” and thus “needs the right to challenge a bill.” “Recently, some states have passed – and others have begun considering – legislation undermining that right. The new laws obligate an insurer to pay even questionable bills or face a heavy fine.” “Supporters of the legislation define a clean claim as a completed standard claim form, regardless of whether it includes all of the information the insurer needs to determine its liability. Critics of the legislation contend that when a claim appears incomplete or otherwise inaccurate, the insurer cannot always tell right away whether or to what extent it is liable for the claim. Thus they define a clean claim as one that includes all the information the insurer needs to assess its obligation.”

Ms. Bunce goes on to say, “The National Healthcare Anti-Fraud Association estimates that up to 10 percent of all claims made by providers contain fraudulent elements. The organization estimates that each year, insurance and consumers are bilked out of more than $1.1 billion.” “Processing claims is expensive, but it is much more expensive when the forms are incomplete or the information inaccurate.” “When providers bill insurers, they use Current Procedural Terminology (CPT) codes. Many are global codes that encompass a number of procedures. Some providers fail to use the appropriate global CPT code. Instead, they “unbundle” claims by using a series of individual codes in order to maximize charges. This technique can turn a $5,000 charge into a total charge for $10,000, maximizing the doctor’s profits while needlessly reducing the amount of insurance payout left on the policy. Confronted with such a claim, the insurer needs time to detect the impropriety, rebundle the claim and process the correct payment.” “Health insurance carriers have a fiduciary obligation to handle all claims promptly, but they also have an obligation to refuse claims for which they are not liable, since those costs translate into higher premiums.”

Administrators must assert their right to details, in order to determine if a claim is excluded or payable in accordance with the terms of the Plan Document. This right will only be available to administrators if they adequately define what a requisite “clean claim” is in their plan language.

To learn more about clean claim plan language, and how to assert your rights in your plan documents, please contact our legal team. To set up an appointment, please call 888-986-0080 and speak to Cindy Monfils at extension 155. Ms. Monfils can be reached by email as well at cmonfils@phiagroup.com.

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This entry was posted by Adam V. Russo on Wednesday, March 4th, 2009 at 12:07 pm and is filed under Never Events. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.