Life of a Claim

1. Life of a Claim HP Provider Relations October 2011

2. Agenda General requirements for reimbursement System edits Pricing methodologies System audits Suspended claims Claim adjustments Paper Remittance Advice Helpful tools Questions

3. Define General Requirements

4. Life of a Claim Before rendering services, provider must verify member’s eligibility and, if applicable, obtain prior authorization. If applicable, provider must first submit claim to member’s private insurance or Medicare. After the claim has been adjudicated (paid or denied) by these entities, then the provider can submit claim to the IHCP. IHCP claims are identified, tracked and controlled using a unique 13-digit internal control number (ICN) assigned to each claim by IndianaAIM. Based on claim type, provider type and member eligibility, IndianaAIM subjects the claim to systems edits, appropriate pricing methodology, and systems audits. NCCI edits are then applied. When adjudicated, the claim can be paid, denied or suspended. Provider can access their weekly remittance advice (RA) through Web interChange. If claim status is paid, appropriate reimbursement is sent to the provider.

5. Services Rendered to IHCP Members To be reimbursed by the IHCP, the service provided must be covered by the IHCP When a prior authorization (PA) is required, the PA must be requested and approved before the service is rendered A provider can verify if a service is covered by the IHCP and whether or not it requires PA: • By referring to the Fee Schedule, located on indianamedicaid.com • By contacting the HP Customer Assistance Provider Line

6. Prior Authorization According to IHCP regulations, providers must request PA for certain services: • To determine medical necessity • 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

7. Claim is Processed by IndianaAIM IndianaAIM reviews every procedure-coded claim to determine when a procedure code requires PA • Based on the PA indicator on the IHCP Fee Schedule Claims from providers located out of state also require PA PA verification Note: The PA belongs to the member, not to the provider

8. Prior Authorization

9. Explain System Edits

10. Claim is Processed by IndianaAIM As part of processing a claim, IndianaAIM performs 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 edits are denied or suspended for further review, depending on the specific edit failed System edits

11. Claim is Processed by IndianaAIM Example of system edits

12. Claim is Processed by IndianaAIM National Correct Coding Edits • CMS-1500 claims: • Claims in a paid status are sent to McKesson to apply NCCI editing • Claims in a denied status are not sent to McKesson • Claims from waiver providers are not subject to NCCI editing  • UB-04 Outpatient claims: • All outpatient claims are sent to McKesson to apply NCCI editing

13. Requirements Common to All Claim Types

14. Describe Pricing Methodologies

15. Claim is Processed by IndianaAIM After claims have passed the system edits, 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 This determination is based on: • Claim type • Procedure-specific pricing indicator • Provider specialty • Date of service Pricing methodology

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, plus applicable spend-down from the IHCP allowed amount to get the amount paid Pricing methodology

17. Claim is Processed by IndianaAIM Example of pricing methodologies

18. Detail System Audits

19. Claim is Processed by IndianaAIM All programs under the IHCP umbrella (such as Traditional Medicaid and Care Select) have certain service limitations The extent of these limitations is determined by the aid categories and 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 medical policies System audits

20. 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

21. Claim is Processed by IndianaAIM Similar 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 dollars paid on the claim, or • Suspended • ….depending on the specific audit failed by the claim System audits

22. Claim is Processed by IndianaAIM Example of system audits

23. Specify Suspended Claims

24. Claim is Adjudicated The HP Resolutions Unit 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 each edit/audit These guidelines are based on the medical policies established by the OMPP Suspended claims – Role of the HP Resolutions Unit

25. Claim is Adjudicated Resolutions Unit team members have the following options when processing suspended claims, depending on the edit or audit failed: • Add or change data (only used when the claim suspended due to data entry errors by HP) • “Force” the claim to process by overriding the edit or audit • Deny the claim • Put the claim on hold (used when there is a system problem or a pending policy decision) • Resubmit the claim to IndianaAIM for reprocessing Suspended claims – Role of the HP Resolutions Unit

26. Claim is Processed by IndianaAIM Claims requiring medical policy review are placed in a suspended status by IndianaAIM IndianaAIM enters the suspended internal control numbers (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

27. Claim is Processed by IndianaAIM A designated staff member reviews the scheduler and reassigns 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 claims – Medical policy

28. Learn Claim Adjustments

29. Claim 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 • If a net overpayment is determined, IndianaAIM establishes an accounts receivable (A/R) and recoups the overpayment • If an underpayment is determined, the provider is reimbursed the net difference in the current week’s payment amount

30. Claim Adjustments Voids • Is the Health Insurance Portability and Accountability Act (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, or after the original claim payment is finalized (after an RA has been created) • Can be performed on paid claims only; cannot be performed on a claim in a denied status • Can be performed for a previously submitted electronic claim or paper claim Electronic voids and replacements

31. Claim Adjustments Voids • PA 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 within two hours of the void taking place Electronic voids and replacements

32. Claim Adjustments Replacements • Is the HIPAA-approved term 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 • Do not replace claims more than one year after the date of service • Can be performed on claims in paid, suspended, or denied status • 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

33. Review Paperless Remittance Advice

34. Paperless Remittance Advice Each week, a listing of all submitted claims displays on the Remittance Advice (RA) The RA sorts the claim information according to claim type and status (paid, denied, and so on) Access the Check/RA Inquiry feature of Web interChange to view and print the RA The RA is available via Web interChange for four weeks • After the fourth week, the oldest RA is purged and is no longer available online

35. Paperless Remittance Advice

36. Find Help Resources Available

37. Helpful Tools Avenues of resolution IHCP Provider Manual, Chapter 10 (Web, CD, or paper), available at indianamedicaid.com Customer Assistance • Local (317) 655-3240 • All others 1-800-577-1278 Written Correspondence • HP Provider Written CorrespondenceP. O. Box 7263Indianapolis, IN 46207-7263 Provider field consultant

38. Q&A