- What are the timeframes for payment of a claim?
Claims must be paid within 30 days after the carrier receives the claim when submitted electronically, or 40 days after the carrier receives the claim if the claim is not submitted electronically. Note that a health care provider’s submission of a claim to the health care provider’s billing agent or clearinghouse does not constitute receipt of the claim by the carrier.
- May a carrier require special information to be submitted with a claim?
Yes. However, if a carrier requires special information for a claim on a routine basis, the carrier must identify that fact on an Internet posting. Carriers must post information on the Internet describing the claims for which the submission of additional documentation or information is required in order for such claims to be adjudicated.
- What information may a carrier require to be submitted with a claim?
A carrier may require information it believes is necessary for the claim to be adjudicated within the timeframes for claims handling established by law. Carriers are required to post on an Internet site the list of the materials, documents or other information required to be submitted to the carrier with a claim for payment of health care services.
- Must a claim be submitted electronically?
Claims are not required to be submitted electronically under New Jersey law. Carriers are permitted, however, to establish certain standards for claims submissions in their contracts with participating network health care providers, including a requirement that claims be routinely submitted electronically. Most carriers, as well as the federal and state programs administering Medicare, Medicaid and other programs are encouraging electronic submission of claims whenever possible.
- May a carrier impose time limits on the submission of claims?
Time limits were established for nonparticipating providers by the Health Information Technology Act or "HINT" (P.L. 1999, c. 154) and companion legislation, P.L. 1999, c.155. Although the Health Claims Authorization, Processing and Payment Act (HCAPPA) amended some provisions of HINT, the HCAPPA did not change the time limits for the filing of claims. Pursuant to HINT, when a nonparticipating health care provider files a claim on behalf of the patient without an assignment of benefits, the provider must file the claim within 60 days after the last date of service of the course of treatment, and when filing a claim under an assignment of benefits from the patient, the nonparticipating health care provider must file the claim within 180 days after the last date of service of the course of treatment. Carriers may permit longer time limits for claim submission. However, whether the carrier chooses to use state standards, or permits a greater length of time, the carrier may deny payment of a claim when the claim is not timely submitted.
Carriers may establish time limits for the filing of a claim with their participating providers through the contract between the health care provider and the carrier, so long as the timeframes are not inconsistent with the timeframes set forth at N.J.S.A. 45:1-10.1 (regarding health care professionals) N.J.S.A. 26:2H-12.12 (regarding health care facilities). Both statutes are reviewable online through the Legislature’s web site.
- If a health care provider does not submit claims electronically, what proof does the health care provider need to show that a claim was submitted timely?
If a health care provider does not submit claims electronically, the health care provider will need to develop a system for proving that an item was sent to and/or received at the location the carrier has indicated claims are to be sent. For example, sending mail using the United States Postal Services’ Delivery Confirmation option is one option a health care provider could consider.
- What are some reasons a claim may be denied?
Although most claims are paid, and most are paid in a timely manner, there are many reasons that a claim may be denied, in whole or in part. Unless a health care service or treatment regimen was approved (or deemed approved) in advance (or upon concurrent review), a claim can be denied because a health care service is considered by the carrier not to be medically necessary. A claim may be denied because it was not submitted timely, because a health care provider was not an eligible provider on the date of service, the covered person was not eligible on the date of service, the health care service was not covered under the terms of the covered person’s policy, required documentation supporting the claim was not submitted, or there were some coding errors in the claim. In addition, a carrier may deny a claim if the carrier has a strong indication of fraud by the provider, and the carrier has initiated an investigation into the suspected fraud. However, if this is the case, the carrier must let the health care provider know this is the reason.
- Aren’t carriers required to give health care providers some notification that a claim submitted by the health care provider is missing information if the carrier is aware that information is missing, instead of just denying the claim?
Yes. If a carrier believes a claim is missing required information, has been incorrectly coded in one way or another, or has other incorrect information, the carrier is required to notify the health care provider of the problem within seven days of determining that a problem exists, and request the information required to complete adjudication of the claim.
- May a carrier pay part of a claim and deny part of a claim, and if so, when does the claim have to be paid?
A carrier may deny some portions of a claim and not others. If so, the carrier is required to pay the approved part of the claim consistent with the timeframes established for paying claims generally (30-days for electronically submitted claims, and 40-days for claims not submitted electronically).
- May carriers deny or pend claims on the basis of coordination of benefits (COB)?
Carriers may not routinely deny or state that a claim is pending because of COB. However, carriers are still permitted to deny claims because of COB when the carrier’s records indicate that other coverage exists, and that the other coverage should be paying first for the costs of the covered person’s health care services.
- When a carrier is required to pay interest, what is the interest, and how is it paid?
The HCAPPA amended some of the sections of HINT, which had previously established an interest penalty for overdue claims payments. As of July 11, 2006, when a carrier is late in paying a claim owed under the terms of a health benefits plan, the carrier is required to pay simple interest on that claim at 12% per annum. The carrier should calculate the interest from the date that the claim should have been paid, and should include the interest owed with the claim payment. However, when a health care provider appeals a claim determination (or lack thereof), the HCAPPA standards for the interest calculation and payment requirement are a little different. If, upon appeal, the carrier or the Arbitration Organization determines that the carrier denied or paid the claim incorrectly, and payment is overdue, then the carrier will owe interest on the claim, BUT the interest is calculated from the date that the claim application for internal appeal was received by the carrier NOT from the date the claim should have been paid. Payments determined due upon appeal are required to be made along with payment of applicable interest within 30 days following the date of the claims payment appeal determination. Payments determined due following arbitration are required to be made along with payment of applicable interest within 10 business days following the date of the Arbitrator’s determination.
Dental service corporations and dental plan organizations are not subject to the 12% interest penalty. Dental service corporations and dental plan organizations remain subject to HINT’s existing 10% interest penalty for late payment of claims on coverage issued by these carriers.
- Are carriers permitted to seek to recoup on claims the carrier says were overpaid?
Yes. However, the HCAPPA substantially limits the length of time carriers may look back at claims to no more than 18 months from the date the claim was paid, except when a carrier suspects fraud or a pattern of inappropriate billing practice by a health care provider. In addition, the carrier may only seek to recoup on a claim once. So, for example, if a carrier states that it overpaid a claim by $50, and recoups that amount, but later determines that it actually overpaid on the claim by $100, the carrier may not seek to recover the additional $50.
- If a carrier is permitted to recoup only once, does that mean that if a carrier alleges a $1,000 overpayment, and offsets that amount against a $500 claim, the carrier cannot collect the remaining $500?
No, the carrier can continue to offset until the $1,000 is collected (assuming appropriate procedures have been adhered to). Rather, after the carrier has notified the health care provider of the alleged amount of the overpayment, the carrier may not later seek to increase the amount of the alleged overpayment.
- Does the HCAPPA apply to all efforts by a carrier to recoup an overpayment?
The HCAPPA applies to all efforts initially made by a carrier to recoup an alleged overpayment on or after the date the HCAPPA became effective – July 11, 2006 – regardless of the date of delivery of the health care service(s) for which the claim was submitted, or the date on which the claim was paid.
- What information must a carrier give a health care provider with respect to an effort to recoup overpayments?
Carriers are required to give the health care provider written notification identifying the carrier’s error in the processing or payment of the claim on which the effort to recoup is based. Health care providers have the opportunity to reimburse the overpayment to the carrier or dispute the carrier’s allegations of overpayment within that 45-day period.
- Are there any standards regarding a carrier’s effort to recoup an alleged overpayment besides providing notice?
Yes. Regardless of how the carrier intends to reclaim the overpaid money, a carrier may not try to reclaim any overpayment until at least 45 days after the notice was sent to the health care provider stating the carrier’s intent to recoup for an overpayment. In the event that the health care provider appeals the effort to recoup the alleged overpayment within the 45-day period following the date the notice was sent by the carrier, then the carrier may not try to reclaim any monies until the health care provider’s appeal and arbitration rights under HCAPPA are exhausted. Also, the carrier may not attempt to collect any penalty or interest on the money that is reclaimed.
- May the carrier try to recoup the monies by making assessments against payment of future claims submitted by the health care provider?
Yes, if the health care provider does not otherwise reimburse the carrier. But note that an offset is not to be made until adequate notice is provided (see Question 16).
- Are carriers restricted in their ability to unilaterally recoup alleged overpayments to providers?
Yes. Any efforts to recoup alleged overpayments of HCAPPA-governed claims must comply with all HCAPPA statutory and procedural requirements and limitations. As offsets sought to be taken against HCAPPA-governed claims are subject to statutory notice requirements, appeal rights and time limitations, efforts may not be made to collect alleged overpayments of claims that are not HCAPPA-governed through offsets against amounts payable for claims that are HCAPPA-governed.
- May a health care provider appeal a claim that is denied, only partially paid, not adjudicated timely, or on which an appropriate interest penalty has not been paid by a carrier?
Yes, the health care provider is entitled to appeal the action (or inaction) on the claim to the carrier.
- If a carrier has more than one payment appeal process, which one do I use?
The only way to obtain the protections of the HCAPPA regarding internal claims appeals, and ultimately use the State's independent binding arbitration process (the Program for Independent Claims Payment Arbitration or PICPA), is for a health care provider to file claims payment appeals using the Health Care Provider Application to Appeal a Claims Determination form (MS Word) within the timeframes established by the HCAPPA. More information about the HCAPPA internal appeal standards is discussed below.
- May a carrier require that the claim meet a certain dollar threshold or other minimum threshold standards before processing an internal claims payment appeal?
No.
- Are there standards for the carrier’s internal claims payment appeals program?
There are timeliness standards that apply to carriers’ internal claims payment appeals programs. A carrier must issue a determination on the internal claims payment appeal within 30 days following receipt of the appeal application from the health care provider. In addition, the carrier must provide notice of its determination on the appeal to the health care provider in writing. The notice must include instructions on how to apply for arbitration using the New Jersey Program for Independent Claims Payment Arbitration (PICPA), if the determination on the internal claims payment appeal is adverse to the health care provider.
- What must be submitted to make an internal claims payment appeal to a carrier?
A health care provider must submit a completed Health Care Provider Application to Appeal a Claims Determination. Carriers should have the forms available on their websites or from their provider relations offices, but health care providers may use the generic version on the Department’s web site if necessary. The form contains a list of the items that need to be submitted. These items include: a copy of the claim submitted; a copy of the remittance advice or Explanation of Benefits; the line items the health care provider disputes and the reason(s) why the health care provider disputes these items, or other explanation for the appeal; copies or descriptions of correspondence between the health care provider and the carrier; and, other documentation that supports the claim or appeal, such as relevant sections of the National Correct Coding Initiative, if the dispute concerns the disposition of billing codes.
- May a carrier modify the Health Care Provider Application to Appeal a Claims Determination form?
Carriers may add their logo to the form (using the version of the form designed for that purpose) (MS Word), but cannot otherwise modify the form.
- Are there time limits for filing internal claims payment appeals?
Yes. A health care provider has 90 days following receipt of a payment determination in which to file a claims payment appeal.
- What impact is there on the timeframes for filing appeals if a nonparticipating health care provider does not receive a remittance advice or explanation of benefits (EOB) on a claim directly, because payment is made to the patient instead?
A health care provider may file an appeal up to 90 days after the date that the health care provider receives the claim payment determination. The 90-day period does not begin to run until the nonparticipating health care provider actually receives written information on the claim payment determination.
- Must a health care provider go through a carrier’s internal claims payment appeal process before the health care provider may request arbitration?
Yes, a health care provider must submit an application for a claims payment appeal to a carrier before submitting the disputed claim amount(s) for arbitration. However, if the carrier fails to respond timely to a health care provider after receipt of the health care provider’s appeal application, the health care provider may pursue the arbitration process without waiting for a determination from the carrier.
- What’s the difference between the Independent Health Care Appeals Program (IHCAP) and the Program for Independent Claims Payment Arbitration (PICPA)?
The IHCAP is a program that provides an independent external review about disputes regarding utilization management (UM) determinations. The IHCAP primarily reviews questions of whether a particular set of health care services are (or were) medically necessary for an individual’s care, including whether a service is medically necessary or cosmetic. The IHCAP will also review questions of whether a service is medical rather than dental, experimental or investigational, whether a condition was preexisting, and certain other questions where independent medical expertise is warranted. The PICPA is a program that provides an independent external review of claims payment questions that do not involve disputes regarding UM determinations. The PICPA will review questions of whether a claim was appropriately denied for administrative reasons, in a timely manner. The PICPA will also review questions of whether amounts paid on a claim were appropriate under the contract terms and applicable fee schedules, if any, under the circumstances, and whether interest was paid appropriately, if due. The decisions obtained through the IHCAP are binding upon the carrier. The decisions obtained through the PICPA are binding on both parties. The IHCAP costs a health care provider $25 to file the UM appeal, with the carrier paying the review costs of $600 (and up) after a decision is rendered. The exact cost to the carrier depends upon which Independent Utilization Review Organization (IURO) reviews the case. The cost of the PICPA’s review and arbitration fees is split evenly between the health care provider and the carrier.
In order to complete an application for the PICPA, you must sent fees for both the Initial Review and the Arbitration Process. A party seeking arbitration (typically, a health care provider) must submit two checks: one nonrefundable check for $50.00 for the Initial Review fee, and a second check for at least $130.00 (or more, depending upon the amount in dispute). The arbitration organization, Maximus, Inc., will collect an equivalent amount from the other party. For more information about the arbitration process, see the Questions & Answers regarding the PICPA on the Department’s website, or go to the arbitration organization’s website at https://njpicpa.maximus.com.
- If a carrier refuses to pay a claim because the carrier has determined the services were not medically necessary and the health care provider disagrees, may a health care provider use the PICPA to resolve the dispute?
No. This type of dispute should be brought – with the consent of the patient – to the carrier’s internal UM appeal program, and then to the IHCAP if the health care provider or patient is dissatisfied with the outcome of the Stage 1 and Stage 2 UM appeals.
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