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Prompt Pay Frequently Asked Questions
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  1. What is the effective date of the provisions of the revised prompt pay law 3901.381 et seq and what claims are affected?

  2. Does the prompt pay law pertain to medical payments coverage associated with auto insurance?

  3. According to the prompt pay law, only electronically submitted claims will be subject to the prompt pay requirements effective 6 months after the final implementation of the “Health Insurance Portability and Accountability Act of 1996” (HIPAA).
    What is ODI considering to be the effective date of HIPAA to clarify when the statute only applies to electronic claim submissions? Are time frames the same for small health plans as defined in HIPAA?


  4. What are the specific claim forms that the Department considers to be “standard” as stated in the regulation?

  5. How are claims to be treated when groups or members have not yet paid the premium for the period covering the service date of the claim?

  6. Would you please clarify how requests for supporting documentation affects the 45 day time limit to pay or deny a claim?

  7. How is interest to be calculated?

  8. Pertaining to interest calculation, when considering the days that are late in the processing of a claim, do we count business days or calendar days?

  9. Is there interest due on interest that is not paid timely?

  10. Are member payable claims subject to interest payments?

  11. Can a provider appeal the calculation of interest?

  12. If the wrong provider is paid on the original payment and the claim is subsequently adjusted and paid to the correct provider, is the interest payment on the adjusted claim based on the original receipt date of the claim?

  13. Do claims incurred by members insured by an Ohio group, for services rendered in an out-of-state facility fall under the statute?

  14. Is there a minimum threshold for making an interest payment, i.e., $1.00?

  15. Do we use normal rounding practices for interest calculations?

  16. According to the prompt payment law, claim payments are considered final two years after original payment. How are claims to be treated that were received prior to July 24, 2002?

  17. Advance notice must be given to providers when an overpayment has been identified. It would seem that this applies to claims received on and after July 24, 2002. Thus, are providers to be given advance notice on some cases and not on others?

  18. If a claim is paid twice to a provider and the second payment includes interest, can the interest amount be recovered?

  19. If provider contacts an insurance company and informs them of an overpayment, does the company still have to give the provider 30 days to appeal the adjustment?

  20. A claim was submitted by a third-party payer and was paid; however, the amount paid was not what was expected. Should a provider file a complaint about this?

  21. What authority does the Ohio Department of Insurance have on reimbursement rates and can provider complaints be filed when there are reimbursement problems?
Answers
  1. What is the effective date of the provisions of the revised prompt pay law 3901.381 et seq and what claims are affected?
    • The prompt pay law, including the interest requirements, applies to claims that are submitted on or after July 24, 2002.

  2. Does the prompt pay law pertain to medical payments coverage associated with auto insurance?
    • No, the prompt pay law only pertains to dental, vision, and health insurance claims.

  3. According to the prompt pay law, only electronically submitted claims will be subject to the prompt pay requirements effective 6 months after the final implementation of the “Health Insurance Portability and Accountability Act of 1996” (HIPAA).
    What is ODI considering to be the effective date of HIPAA to clarify when the statute only applies to electronic claim submissions? Are time frames the same for small health plans as defined in HIPAA?
    • The date would be whatever date a particular third-party payer must comply with HIPAA. Extensions may delay that date. The timeframes under the prompt pay law are the same for all third-party payers.

  4. What are the specific claim forms that the Department considers to be “standard” as stated in the regulation?
    • The standard claim forms are prescribed in Ohio Administrative Code Section 3901-1-59. This rule was amended October 28, 2002. (http://www.registerofohio.state.oh.us/index.jsp). The standard claim forms are as follows:
      • For institutional health care practitioners -- CMS Form 1450 (formally HCFA Form 1450). For purposes of this rule, CMS Form 1450 inlcudes UB-82 or UB-92 and their successors.
      • For health care practitioners billing for professional services -- CMS Form 1500 (formerly HCFA Form 1500) and successor forms as approved by CMS.
      • For dentists – J512 Form
      • For pharmacists – NCPDP Form 1983 or its successors

  5. How are claims to be treated when groups or members have not yet paid the premium for the period covering the service date of the claim?
    • The Ohio Revised Code Section 3901.381 (B)(2)(a) states in pertinent part:
      “Supporting documentation includes the verification of employer and beneficiary coverage under a benefits contract, confirmation of premium payment, medical information regarding the beneficiary and the services provided, information on the responsibility of another third-party payer to make payment or confirmation of the amount of payment by another third-party payer, and information that is needed to correct material deficiencies in the claim related to a diagnosis or treatment or the provider’s identification” (emphasis added).
      On its face, the statute specifically contemplates that third-party payers will ask for premium payments or confirmation of payment as part of the ordinary claim processing procedure. Thus, requests for premium payments should be considered as requests for supporting documentation, which need to be made within the initial 30-day time period.

  6. Would you please clarify how requests for supporting documentation affects the 45 day time limit to pay or deny a claim?

  Scenario 1 (Multiple requests for supporting documentation):
  June 2 -- Claim received.

 

§  Date received not counted toward statutory time to pay.

 

June 3 -- First day after receipt of claim: CLOCK STARTS.

 

§  Beginning of the statutory time to pay.

June 19 -- Supporting documentation needed (other insurance letter Is sent within the 30-day period after receipt of the claim).

§  Counted as a statutory day.

§  17 days applied thus far toward statutory time to pay. 

June 20 -- First day following the last request for supporting documentation made within the 30-day period after receipt of the claim: CLOCK STOPS.

§  Statutory time within which to pay is suspended.

July 9 -- Requested supporting documentation received: CLOCK RESUMES.

§  Statutory time to pay starts running again.

§  A total of 19 days have been suspended (6/20 through 7/8).

 July 14 -- Additional supporting documentation is needed -- medical records are requested after the initially requested documentation has been received

 

§  Additional request for supporting documentation was made outside of the 30-day period after the claim is received.

 §  Time is not suspended (see 3901.381B(2)(a)).

§  A total of 23 days have been applied thus far toward time limit to pay. 

July 28 -- Medical records received: CLOCK CONTINUES RUNNING.

§  Still within the statutory time to pay.

§  A total of 37 days have been applied toward time limit.  

August 5 -- Payment due.

§  A total of 45 days of "processing" used (not counting the 19 days that were suspended waiting for supporting documentation to be received). 

      August 8 - Claim processed and payment mailed.

§  The date the claim payment is made is counted toward the statutory time to pay. A total of 48 "processing" days elapsed between the day after the claim was received and the date payment was mailed (less suspended days). A total of 3 days of interest is owed and must be included as part of the original claim payment.

Scenario 2 (Multiple requests for supporting documentation within the initial 30 day period after the claim is received):

June 2 -- Claim received.

§  Date received not counted toward statutory time to pay.

June 3 -- First day after receipt of claim: CLOCK STARTS.

 

June 6 -- First request for supporting documentation made within the 30-day period after receipt of the claim is sent (other insurance inquiry).

 

June 7 -- First day following the last request for supporting documentation made within the 30-day period after receipt of the claim: CLOCK STOPS.

§  Statutory time to pay is suspended.

§  A total of 4 days have thus far been applied toward statutory time to pay.

June 16 -- Response to request for supporting documentation is received. CLOCK RESUMES.

§  A total of 4 days have thus far been applied toward statutory time to pay requirement.

June 28 –- Additional supporting documentation needed (medical records are requested after the initially requested documentation has been received).

§  Time will be not be suspended since this is an "additional" request for supporting documentation made after the initially requested supporting documentation was received. CLOCK CONTINUES RUNNING.

§  Exception would be pursuant to 3901.381(B)(2)(b) if this additional request was made due to a preexisting condition, which was unknown to the third-party payer and about which it was reasonable for the third party payer to have no knowledge at the time of its initial request. In that situation the time to pay would be suspended until the supporting documentation is received and then start back up again. 

July 31 –- Additional supporting documentation requested is received. Claim processed and payment mailed.

§  A total of 50 "processing" days elapsed: 4 between receipt of claim and the request made for supporting documentation, and 46 days from second request the receipt of the supporting documentation originally requested and payment of the claim.

§  Claim was paid outside of the 45-day statutory requirement, therefore 5 days of interest is due.  

Scenario 3 (Request for supporting documentation leading to a pre-existing medical condition review):
May 5 –- Claim received.

§  Date received not counted toward statutory time to pay.

 

May 6 -- First day after receipt of claim: CLOCK STARTS.

May 28 –- Supporting documentation needed (other insurance inquiry is sent within the 30-day period after receipt of the claim). 

§  Total of 23 days has been applied to statutory time to pay.

 

May 29 -- First day following the last request for supporting documentation made within the 30-day period after receipt of the claim: CLOCK STOPS.

 

June 17 –- Supporting documentation is received. CLOCK RESUMES.

 

§  Time to pay the claim has been suspended 19 days.

§  Clock thereafter runs 14 days.  

 

June 30 –- As a result of the documentation received on June 17, a request is sent for additional supporting documentation for a pre-existing condition review. Time would again be suspended if the pre-existing condition was unknown and it was reasonable that the third-party payer did not know of the pre-existing condition at the time of its initial request for documentation.

 

July 1 –- First day following request for additional supporting documentation concerning a pre-existing condition: CLOCK STOP.


July 25 -- Additional supporting documentation concerning pre-existing condition is received.

§  CLOCK RESUMES.

§  Time to pay the claim has been suspended 24 days.

§  Clock thereafter runs 18 days.                                         

    August 11 -- Claim processed and payment mailed.

§  A total of 55 processing days elapsed (not counting the 43 suspended days).

§  Payment was due on August 1 (45th processing day); therefore, 10 days of interest is now due.

 

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  1. How is interest to be calculated?
    • The calculation of interest should be completed as follows:
      1. Total Possible Annual Interest (TPAI) is calculated. This is the actual total amount paid for the claim in question multiplied by the 18% interest rate.
        EXAMPLE
        $150 x 18% = $27.00
        (Amt. Pd.) (Int. rate) (TPAI)
      2. Daily interest amount (DIA) is computed. This is the Total Possible Annual Interest (TPAI) divided by 365 days (Days per Year).
        EXAMPLE
        $27.00/365 = .0740
        (TPAP) (Days/yr.) (DPA)
      3. Interest Days (ID) are calculated. Interest Days equal the number of days that have elapsed between the statutory due date and the actual date payment was/will be remitted. For purposes of calculation, the date the payment is made equals the date the payment was mailed or, for electronically submitted claims, the date the payment was transmitted.
        EXAMPLE
        Actual Date of Remittance = 31st
        First Date Payment Overdue = 22nd (First Date Following the Due Date)
        Elapsed time (Interest Days) - 9 Days
      4. Amount of interest to be paid is computed. This is equal to the number of interest days multiplied by the daily interest amount.
        EXAMPLE
        9 (Interest Days) x $.0740 (Daily Interest Amount) = $0.67 (Interest Due)
        This amount of interest must be paid at the time the claim payment is made.

  2. Pertaining to interest calculation, when considering the days that are late in the processing of a claim, do we count business days or calendar days?
    • Calendar days should be used when calculating interest.

  3. Is there interest due on interest that is not paid timely?
    • The law does not address any compounding of interest. The 18% annual interest rate is to be calculated solely on the days in excess of the statutory time requirement.

  4. Are member payable claims subject to interest payments?
    • The interest requirement is not limited to provider claims. Therefore, interest is due when claims submitted by beneficiaries are paid late.

  5. Can a provider appeal the calculation of interest?
    • The statute does not address appeals of an interest calculation.

  6. If the wrong provider is paid on the original payment and the claim is subsequently adjusted and paid to the correct provider, is the interest payment on the adjusted claim based on the original receipt date of the claim?
    • Interest would be based on the amount of the claim payment when the claim is finally paid to the correct provider. The original receipt date of the claim should be used to calculate timeliness and interest.

  7. Do claims incurred by members insured by an Ohio group, for services rendered in an out-of-state facility fall under the statute?
    • The statute does not exempt claims that are submitted for services that are rendered out of state and the definition of “provider” does not exclude non- Ohio providers. It appears the statute applies.

  8. Is there a minimum threshold for making an interest payment, i.e., $1.00?
    • There is no minimum payment level provided by the statute.

  9. Do we use normal rounding practices for interest calculations?
    1. Interest >= .005 means interest payment is $0.01.
    2. Interest <= .004 means no interest payment.
    • The Department expects third-party payers to use normal rounding principles to the nearest full cent.

  10. According to the prompt payment law, claim payments are considered final two years after original payment. How are claims to be treated that were received prior to July 24, 2002?
    • The “take-back” provisions in Section 3901.388 apply to payments that are made pursuant to Sections 3901.381 – 3910.386. Section 3901.381 applies only if a claim was submitted on or after July 24, 2002. For example, the recovery of a claim that was submitted and paid in August, 2002 would be subject to the notice and appeal provisions in Section 3901.388. It appears that claims that were submitted prior to July 24, 2002 would not be subject to the provisions of Section 3901.388, even if it they were paid after July 24, 2002.

  11. Advance notice must be given to providers when an overpayment has been identified. It would seem that this applies to claims received on and after July 24, 2002. Thus, are providers to be given advance notice on some cases and not on others?
    • It appears that the notice provisions in Section 3901.388 apply to any recovery initiated on a claim that was paid pursuant to Sections 3901.381 – 3901.386 (i.e., claims submitted on or after July 24, 2002). The Department would encourage third-party payers to provide the same notice for all recoveries.

  12. If a claim is paid twice to a provider and the second payment includes interest, can the interest amount be recovered?
    • Assuming the first payment was proper and timely, a recovery of the second payment could include the interest, subject to Section 3901.388.

  13. If provider contacts an insurance company and informs them of an overpayment, does the company still have to give the provider 30 days to appeal the adjustment?
    • Section 3901.388 applies to all recoveries of overpayments and notice would have to be given. There are no exceptions to the procedural safeguards of this section and Section 3901.388 (D) prohibits contractual provisions that negate a third-party payer’s obligations under Section 3901.388. The fact that the provider brought the overpayment to the third-party payer’s attention also does not negate the third-party payer’s obligations under the statute.

  14. A claim was submitted by a third-party payer and was paid; however, the amount paid was not what was expected. Should a provider file a complaint about this?
    • The prompt pay law does not address reimbursement rates or fees for services. The provider should exhaust all appeal options and work with the third-party payer’s provider relations office to resolve such issues.

  15. What authority does the Ohio Department of Insurance have on reimbursement rates and can provider complaints be filed when there are reimbursement problems?
    • Typically, reimbursement rates are deemed to be private contractual matters between the provider and the third-party payer, which means we do not have authority to resolve your complaint. The Department’s jurisdiction over insurance matters is governed by what is set forth in Title 39 of the Ohio Revised Code (“R.C.”), which we must follow.

      Ohio insurance law does contain some provisions that touch on reimbursement; however, none of these laws govern the actual amount of the reimbursement. For instance, R.C. 3923.23 through 3923.234 contain a prohibition on denial of reimbursement based on claims submitted under the benefit provisions in an accident and sickness policy or certificate [emphasis added]. These statutes do not speak to negotiation of rates by providers contracting with insurers in the marketplace to be participants in a network. While we do regulate insurance policies and certificates of insureds, we do not regulate the substantive negotiation of provider contracts, which are not part of the insurance policy or certificate.

      Further, if the listed providers are legally licensed to provide services described in the insurance policy or certificate, R.C. 3923.23 through 3923.234 state that reimbursement of the listed providers under the policy or certificate [emphasis added] cannot be denied for providing those services. In other words, even if the insurer stated such a denial of reimbursement to these listed providers in their policy or certificate, it would be ineffective because it is contrary to what the law allows.

      Finally, Ohio Administrative Code 3901-1-7(C)(6) defines as an unfair trade practice failure to offer claimants amounts, which are fair and reasonable within policy limits and in accordance with policy provisions. This rule is geared to the insurance benefit contract (policy) and its terms and limits. The rule does not speak to the negotiation of rates of reimbursement in a provider contract. The provider negotiates his or her contract with the insurer or health insuring corporation or network separately from the benefit contract or policy.


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