1. Life of a Claim Presented by HP Provider Relations

2. Agenda General requirements for reimbursement System Edits Pricing Methodologies System Audits Suspended Claims Claim Adjustments 2October 2010

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4. Services Rendered to IHCP Members To be reimbursed by IHCP, the service provided must be covered by IHCP and when a prior authorization (PA) is required, the PA must be requested and approved before the service is rendered How can a provider verify if a service is covered by IHCP, and whether or not it requires PA? −By contacting the HP Customer Assistance Provider Line −Referring to the Fee Schedule, located in the IHCP Web site October 20104

5. Prior Authorization According to the IHCP regulations, providers must request prior authorization (PA) for certain services … −To determine medical necessity, or −When normal limits are exhausted for certain services The main purpose of the PA process is to ensure that Indiana Medicaid funding is utilized only for those services that are −Medically necessary −Appropriate −Cost effective Note: PA is not a guarantee of payment. October 20105

6. Prior Authorization Program/ServicesAdministered by…Contact Information Traditional Medicaid and Carved-out Services ADVANTAGE Health Solutions SM 1-800-269-5720 Care SelectADVANTAGE Health Solutions SM 1-800-784-3981 MDwise1-866-440-2449 Hoosier HealthwiseManaged Health Services (MHS) 1-877-647-4848 Anthem1-866-408-7187 MDwise(317) 630-2831 or 1-800-356-1204 Pharmacy Services (All Programs) ACS1-866-879-0106 October 20106

7. Claim is Processed by IndianaAIM As part of processing a claim, IndianaAIM performs systems edits to verify that the required fields are completed and that the information included in these fields is valid Claim data is validated against other IndianaAIM databases, such as the member, provider, and reference files – Those claims that do not pass the system edit review are denied or suspended for further review, depending on the specific edit triggered by the claim System Edits October 20107

8. Claim is Processed by IndianaAIM Example of System Edits Edit CodeDescription 0228Provider Signature Missing 0264The Date of Service is Missing 0527Date Billed After ICN Date 0507The “From” Date is After the “To” Date 0545Claim Past Filing Limit 0513Recipient Name and Number Disagree 0644Covered by Private Insurance- Bill Prior to Medicaid 1010Rendering Provider Not a Member of the Billing Group 1025Billing Provider Not Enrolled for the Date of Service 1100Billing NPI Not Reported to a Legacy Provider Identifier 2008Recipient Ineligible for Level of Care Billed 3003Procedure Code Requires PA 4019Procedure Code Requires Attachment October 20108

9. UB-04 – Institutional ClaimOctober 20109 What is it? National Correct Coding Initiative In the 1990's, the Centers for Medicare & Medicaid Services (CMS) developed the National Correct Coding Initiative (NCCI) to promote national correct coding methodologies and to control improper coding leading to inappropriate payment NCCI has been in place for many years and most providers are familiar with the editing methodologies with Medicare

10. UB-04 – Institutional ClaimOctober 201010 What is it? National Correct Coding Initiative Based on input from a variety of sources: – American Medical Association (AMA) Current Procedural Terminology (CPT ® ) Guidelines – Coding guidelines developed by national societies – Analysis of standard medical and surgical practices – Review of current coding practices "CPT copyright 2009 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association."

11. UB-04 – Institutional ClaimOctober 201011 National Correct Coding Initiative – The recent healthcare legislation passed into law (H.R. 3962), requires that Medicaid programs incorporate compatible methodologies of the National Correct Coding Initiative (NCCI) into their claims processing system – Section 1761 –Mandatory State Use of National Correct Coding Initiative, of this bill mandates that NCCI methodologies must be effective for claims received on or after October 1, 2010 – Initial editing will encompass three basic coding concepts: – NCCI Column I and Column II (also known as bundling) – Mutually Exclusive (ME) edits – Medical Unlikely Edits (MUE)

12. October 201012

13. Claim is Processed by IndianaAIM IndianaAIM reviews every procedure-coded claim to determine when a procedure code requires prior authorization (PA) This determination is based on the PA Indicator on the IHCP fee schedule Claims from providers located out of state also require PA Once approved, the PA belongs to the member, not to the provider Prior Authorization Verification October 201013

14. Claim is Processed by IndianaAIM IndianaAIM denies the service when a procedure code requires PA and: — There is no approved PA on file — The date of service on the claim does not match the prior authorized date(s) IndianaAIM decrements the PA units when: — The procedure code requires PA and there is an approved PA on file Prior Authorization Verification October 201014

15. Claim is Processed by IndianaAIM After claims have passed the edits review, they are subjected to pricing review – As part of this review, the system determines whether or not the claim can be automatically priced or needs to be suspended for manual pricing o This determination is based on: o Claim Type o Procedure-Specific Pricing Indicator o Provider Specialty o Date of Service Pricing Methodology October 201015

16. Claim is Processed by IndianaAIM The claim pricing process calculates the Medicaid-allowed amount for claims based on claim type, pricing modifiers and defined pricing methodologies – Based on the claim type, IndianaAIM directs the claim to the appropriate pricing methodology – If a third-party liability (TPL) amount is present, the system subtracts this figure from the IHCP allowed amount to get the amount paid Pricing Methodology October 201016

17. Claim is Processed by IndianaAIM Example of Pricing Methodologies Pricing MethodologyApplied on …. Diagnosis-Related Grouping (DRG)Inpatient Services Procedure Code Max Fee, or Revenue Code Flat Rate Outpatient Services Resource-Based Relative Value Scale (RBRVS) Medical Services Overhead Cost Rate/Staffing Cost Rate Home Health Services Max FeeTransportation Services and DME Lab FeeLab Services Manual PricingDurable Medical Equipment Services State Maximum Allowable Cost (SMAC) Pharmacy Services October 201017

18. Claim is Processed by IndianaAIM All the programs that fall under the umbrella of the IHCP (such as Traditional Medicaid and Care Select) have certain service limitations – The extent of these limitations will be determined by the aid categories and are defined by state and federal regulations – These regulations are usually referred to as the IHCP Medical Policy – The Office of Medicaid Policy and Planning (OMPP) is responsible for establishing these medical policies Systems Audits October 201018

19. Claim is Processed by IndianaAIM IHCP Medical Policies are monitored and enforced by the auditing process Audits…. – Compare current claims for a specific member against all other services on the claim history file that were rendered, billed, and finalized for that member – Ensure that providers do not perform excessive or unnecessary services without medical justification – Ensure that state and/or federal regulations regarding the frequency, extent, length of stay, and cost of service are followed System Audits October 201019

20. Claim is Processed by IndianaAIM Similar to what happens early in the process when the claim is subjected to system edits; if the claim fails any of the system audits, the claim may be… – Systematically denied – Systematically cut back to reduce the number of units or dollars paid on the claim, or – Suspended, ….depending on the specific audit triggered by the claim System Audits October 201020

21. Claim is Processed by IndianaAIM Example of System Audits Audit Code Description 5000Possible Duplicate 5001Exact Duplicate 6056Only One Hearing Aid Repair Per 12 Months Allowed For Recipients 18 and Older 6113DME Limited to $2,000 Per Recipient Per Calendar Year 6115Physical Therapy Services Limited to 50 Visits Per Calendar Year 6710Diabetic Test Strips are Limited to 2 Units Per Month 6011Professional / Technical Components For Radiology or Pathology Not Payable When Complete Procedure Already Paid 6701Procedure Code 93352 Must be Billed on the Same Day as 93350 and 93351 6034Global Surgery Payable at Reduced Amount When Component of Surgical Care Paid October 201021

22. Claim is Adjudicated The HP resolution claims adjudication staff examines suspended claims and makes a decision based on approved adjudication guidelines for the date of service – The approved guidelines indicate the course of action that must be taken for all the error codes (edit/audits failures) that are reviewed and resolved by the HP Resolutions Unit – These guidelines are based on the medical policies established by OMPP Suspended Claims – Role of the HP Resolutions Unit October 201022

23. Claim is Adjudicated Resolution examiners have the option of applying the following transactions when processing suspended claims, depending on the edit or audit failure: – Add or change data (data entry errors by HP) – Force or override the edit or audit – Deny the claim – Put the claim on hold (which can be due to a system problem or a pending policy decision) – Resubmit the claim Suspended Claims – Role of the HP Resolutions Unit October 201023

24. Claim is Processed by IndianaAIM Claims requiring medical policy review are placed in a suspended status by IndianaAIM IndianaAIM enters the suspended ICNs onto a scheduler and automatically routes the suspended ICNs to the Care Management Organization (CMO) to which the member is assigned ADVANTAGE Health Solutions for Traditional Medicaid and for their Care Select members MDwise for their Care Select members Suspended Claims – Medical Policy October 201024

25. Claim is Processed by IndianaAIM A designated staff member reviews the scheduler and re- assigns the suspended ICNs to additional staff members for resolution Each ICN is processed according to the approved guidelines for the specific audit Based on the guidelines, the audit will be forced to a paid status, or the audit will fail (deny) Medical records are not requested from the provider during this process Medical documentation submitted with the claim, however, is reviewed Suspended ICNs should be completed within 30 days Suspended Claim Resolution – Medical Policy October 201025

26. Claims Adjustment

27. Claims Adjustments An adjustment is defined as a request to change historical data or reimbursement for a claim – Adjustments are necessary when there has been an overpayment or underpayment to the provider o If a net overpayment is determined, IndianaAIM will establish an accounts receivable and recoup the overpayment o If an underpayment is determined, the provider will be reimbursed the net difference in the current week’s payment amount October 201027

28. Claims Adjustment Change member name Change member ID (RID) Change billing provider number/NPI Change patient liability amount (LTC) Change net billed amount (TPL claims) Change copay information Change certification code (Care Select) Adjustments cannot be performed for the following scenarios: October 201028

29. Claims Adjustment Voids Is the HIPAA-approved term used to describe the deletion or cancellation of an entire claim. Can be completed on the same day or in the same week that the original claim was submitted, as well as after the original claim payment is finalized (after an RA has been created). Can be performed on paid claims only (that is, it cannot be performed on a claim in a denied status) Can be performed for a previously submitted electronic claim or paper claim Electronic Voids & Replacements October 201029

30. Claims Adjustment Voids Prior-authorized units are added to the then- current balance when a claim is voided Providers can view the updated balance in Web interChange using the PA Inquiry function — Updated units can be viewed within two hours of the void taking place Updated units are restored to the PA balance immediately following the completion of a paper adjustment Electronic Voids and Prior Authorization October 201030

31. Claims Adjustment Replacements The HIPAA-approved term is used to describe the correction of a claim that has already been submitted Can be completed on the same day or in the same week that the original claim was submitted, as well as after the payment is finalized Can be performed on paid and denied claims Can only be submitted for noncheck-related adjustments Check-related adjustments must be submitted on paper Paper adjustment form instructions are available in the IHCP Provider Manual, Chapter 11, Section 3 Electronic Voids and Replacements October 201031

32. 32October 2010

33. 33October 2010 Thank you!