28 CA ADC § 1300.71
28 CCR s 1300.71
Cal. Admin. Code tit. 28, s 1300.71
CALIFORNIA CODE OF REGULATIONS
TITLE 28. MANAGED HEALTH CARE
DIVISION 1. THE DEPARTMENT OF MANAGED HEALTH CARE
CHAPTER 2. HEALTH CARE SERVICE PLANS
ARTICLE 8. SELF-POLICING PROCEDURES
This database is current through 06/09/06, Register 2006, No. 23.
s 1300.71. Claims Settlement Practices.
(a) Definitions.
(1) "Automatically" means the payment of the interest due to the provider
within five (5) working days of the payment of the claim without the need
for any reminder or request by the provider.
(A) If the interest payment is not sent in the same envelope as the claim
payment, the plan or the plan's capitated provider shall identify the
specific claim or claims for which the interest payment is made, include a
statement setting forth the method for calculating the interest on each
claim and document the specific interest payment made for each claim.
(B) In the event that the interest due on an individual late claim payment
is less than $2.00 at the time that the claim is paid, a plan or plan's
capitated provider that pays claims (hereinafter referred to as "the
plan's capitated provider") may pay the interest on that claim along with
interest on other such claims within ten (10) calendar days of the close
of the calendar month in which the claim was paid, provided the plan or
the plan's capitated provider includes with the interest payment a
statement identifying the specific claims for which the interest is paid,
setting forth the method for calculating interest on each claim and
documenting the specific interest payment made for each claim.
(2) "Complete claim" means a claim or portion thereof, if separable,
including attachments and supplemental information or documentation, which
provides: "reasonably relevant information" as defined by section (a)(10),
"information necessary to determine payer liability" as defined in section
(a)(11 and:
(A) For emergency services and care provider claims as defined by section
1371.35(j):
(i) the information specified in section 1371.35(c) of the Health and
Safety Code; and
(ii) any state-designated data requirements included in statutes or
regulations.
(B) For institutional providers:
(i) the completed UB 92 data set or its successor format adopted by the
National Uniform Billing Committee (NUBC), submitted on the designated
paper or electronic format as adopted by the NUBC;
(ii) entries stated as mandatory by NUBC and required by federal statute
and regulations; and
(iii) any state-designated data requirements included in statutes or
regulations.
(C) For dentists and other professionals providing dental services:
(i) the form and data set approved by the American Dental Association;
(ii) Current Dental Terminology (CDT) codes and modifiers; and
(iii) any state-designated data requirements included in statutes or
regulations.
(D) For physicians and other professional providers:
(i) the Centers for Medicare and Medicaid Services (CMS) Form 1500 or its
successor adopted by the National Uniform Claim Committee (NUCC) submitted
on the designated paper or electronic format;
(ii) Current Procedural Terminology (CPT) codes and modifiers and
International Classification of Diseases (ICD-9CM) codes;
(iii) entries stated as mandatory by NUCC and required by federal statute
and regulations; and
(iv) any state-designated data requirements included in statutes or
regulations.
(E) For pharmacists:
(i) a universal claim form and data set approved by the National Council
on Prescription Drug Programs; and
(ii) any state-designated data requirements included in statutes or
regulations.
(F) For providers not otherwise specified in these regulations:
(i) A properly completed paper or electronic billing instrument submitted
in accordance with the plan's or the plan's capitated provider's
reasonable specifications; and
(ii) any state-designated data requirements included in statutes or
regulations.
(3) "Reimbursement of a Claim" means:
(A) For contracted providers with a written contract, including in-network
point-of-service (POS) and preferred provider organizations (PPO): the
agreed upon contract rate;
(B) For contracted providers without a written contract and non-contracted
providers,except those providing services described in paragraph (C)
below: the payment of the reasonable and customary value for the health
care services rendered based upon statistically credible information that
is updated at least annually and takes into consideration:(1) the
provider's training, qualifications, and length of time in practice; (ii)
the nature of the services provided; (iii) the fees usually charged by the
provider; (iv) prevailing provider rates charged in the general geographic
area in which the services were rendered; (v) other aspects of the
economics of the medical provider's practice that are relevant; and (vi)
any unusual circumstances in the case; and
(C) For non-emergency services provided by non-contracted providers to PPO
and POS enrollees: the amount set forth in the enrollee's Evidence of
Coverage.
(4) "Date of contest," "date of denial" or "date of notice" means the date
of postmark or electronic mark accurately setting forth the date when the
contest, denial or notice was electronically transmitted or deposited in
the U.S. Mail or another mail or delivery service, correctly addressed to
the claimant's office or other address of record with proper postage
prepaid. This definition shall not affect the presumption of receipt of
mail set forth in Evidence Code Section 641.
(5) "Date of payment" means the date of postmark or electronic mark
accurately setting forth the date when the payment was electronically
transmitted or deposited in the U.S. Mail or another mail or delivery
service, correctly addressed to the claimant's office or other address of
record. To the extent that a postmark or electronic mark is unavailable to
confirm the date of payment, the Department may consider, when auditing
claims payment compliance, the date the check is printed and the date the
check is presented for payment. This definition shall not affect the
presumption of receipt of mail set forth in Evidence Code Section 641.
(6) "Date of receipt" means the working day when a claim, by physical or
electronic means, is first delivered to either the plan's specified claims
payment office, post office box, or designated claims processor or to the
plan's capitated provider for that claim. This definition shall not affect
the presumption of receipt of mail set forth in Evidence Code section 641.
In the situation where a claim is sent to the incorrect party, the "date
of receipt" shall be the working day when the claim, by physical or
electronic means, is first delivered to the correct party responsible for
adjudicating the claim.
(7) "Date of Service," for the purposes of evaluating claims submission
and payment requirements under these regulations, means:
(A) For outpatient services and all emergency services and care: the date
upon which the provider delivered separately billable health care services
to the enrollee.
(B) For inpatient services: the date upon which the enrollee was
discharged from the inpatient facility. However, a plan and a plan's
capitated provider, at a minimum, shall accept separately billable claims
for inpatient services on at least a bi-weekly basis.
(8) A "demonstrable and unjust payment pattern" or "unfair payment
pattern" means any practice, policy or procedure that results in repeated
delays in the adjudication and correct reimbursement of provider claims.
The following practices, policies and proceduresmay constitute a basis for
a finding that the plan or the plan's capitated provider has engaged in a
"demonstrable and unjust payment pattern" as set forth in section (s)(4):
(A) The imposition of a Claims Filing Deadline inconsistent with section
(b)(1) in three (3) or more claims over the course of any three-month
period;
(B) The failure to forward at least 95% of misdirected claims consistent
with sections (b)(2)(A) and (B) over the course of any three-month period;
(C) The failure to accept a late claim consistent with section (b)(4) at
least 95% of the time for the affected claims over the course of any
three-month period;
(D) The failure to request reimbursement of an overpayment of a claim
consistent with the provisions of sections (b)(5) and (d)(3), (4), (5) and
(6) at least 95% of the time for the affected claims over the course of
any three-month period;
(E) The failure to acknowledge the receipt of at least 95% of claims
consistent with section (c) over the course of any three-month period;
(F) The failure to provide a provider with an accurate and clear written
explanation of the specific reasons for denying, adjusting or contesting a
claim consistent with section (d)(1) at least 95% of the time for the
affected claims over the course of any three-month period;
(G) The inclusion of contract provisions in a provider contract that
requires the provider to submit medical records that are not reasonably
relevant, as defined by section (a)(10), for the adjudication of a claim
on three (3) or more occasions over the course of any three month period;
(H) The failure to establish, upon the Department's written request, that
requests for medical records more frequently than in three percent (3%) of
the claims submitted to a plan or a plan's capitated provider by all
providers over any 12-month period was reasonably necessary to determine
payor liability for those claims consistent with the section (a)(2). The
calculation of the 3% threshold and the limitation on requests for medical
records shall not apply to claims involving emergency or unauthorized
services or where the plan establishes reasonable grounds for suspecting
possible fraud, misrepresentation or unfair billing practices;
(I) The failure to establish, upon the Department's written request, that
requests for medical records more frequently than in twenty percent (20%)
of the emergency services and care professional provider claims submitted
to the plan's or the plan's capitated providers for emergency room service
and care over any 12-month period was reasonably necessary to determine
payor liability for those claims consistent with section (a)(2). The
calculation of the 20% threshold and the limitation on requests for
medical records shall not apply to claims where the plan demonstrates
reasonable grounds for suspecting possible fraud, misrepresentation or
unfair billing practices;
(J) The failure to include the mandated contractual provisions enumerated
in section (e) in three (3) or more of its contracts with either claims
processing organizations and/or with plan's capitated providers over the
course of any three-month period;
(K) The failure to reimburse at least 95% of complete claims with the
correct payment including the automatic payment of all interest and
penalties due and owing over the course of any three-month period;
(L) The failure to contest or deny a claim, or portion thereof, within the
timeframes of section (h) and sections 1371 or 1371.35 of the Act at least
95% of the time for the affected claims over the course of any three-month
period;
(M) The failure to provide the Information for Contracting Providers and
the Fee Schedule and Other Required Information disclosures required by
sections (l) and (o) to three (3) or more contracted providers over the
course of any three-month period;
(N) The failure to provide three (3) or more contracted providers the
required notice for Modifications to the Information for Contracting
Providers and to the Fee Schedule and Other Required Information
consistent with section (m) over the course of any three month period;
(O) Requiring or allowing any provider to waive any protections or to
assume any obligation of the plan inconsistent with section (p) on three
(3) or more occasions over the course of any three month period;
(P) The failure to provide the required Notice to Provider of Dispute
Resolution Mechanism(s) consistent with section 1300.71.38(b) at least 95%
of the time for the affected claims over the course of any three-month
period;
(Q) The imposition of a provider dispute filing deadline inconsistent with
section 1300.71.38(d) in three (3) or more affected claims over the course
of any three-month period;
(R) The failure to acknowledge the receipt of at least 95% of the provider
disputes it receives consistent with section 1300.71.38(e) over the course
of any three-month period;
(S) The failure to comply with the Time Period for Resolution and Written
Determination enumerated in section 1300.71.38(f) at least 95% of the time
over the course of any three-month period; and
(T) An attempt to rescind or modify an authorization for health care
services after the provider renders the service in good faith and pursuant
to the authorization, inconsistent with section 1371.8, on three (3) or
more occasions over the course of any three-month period.
(9) "Health Maintenance Organization" or "HMO" means a full service health
care service plan that maintains a line of business that meets the
criteria of Section 1373.10(b)(1)-(3).
(10) "Reasonably relevant information" means the minimum amount of
itemized, accurate and material information generated by or in the
possession of the provider related to the billed services that enables a
claims adjudicator with appropriate training, experience, and competence
in timely and accurate claims processing to determine the nature, cost, if
applicable, and extent of the plan's or the plan's capitated provider's
liability, if any, and to comply with any governmental information
requirements.
(11) "Information necessary to determine payer liability" means the
minimum amount of material information in the possession of third parties
related to a provider's billed services that is required by a claims
adjudicator or other individuals with appropriate training, experience,
and competence in timely and accurate claims processing to determine the
nature, cost, if applicable, and extent of the plan's or the plan's
capitated provider's liability, if any, and to comply with any
governmental information requirements.
(12) "Plan" for the purposes of this section means a licensed health care
service plan and its contracted claims processing organization.
(13) "Working days" means Monday through Friday, excluding recognized
federal holidays.
(b) Claim Filing Deadline.
(1) Neither the plan nor the plan's capitated provider that pays claims
shall impose a deadline for the receipt of a claim that is less than 90
days for contracted providers and 180 days for non-contracted providers
after the date of service, except as required by any state or federal law
or regulation. If a plan or a plan's capitated provider is not the primary
payer under coordination of benefits, the plan or the plan's capitated
provider shall not impose a deadline for submitting supplemental or
coordination of benefits claims to any secondary payer that is less than
90 days from the date of payment or date of contest, denial or notice from
the primary payer.
(2) If a claim is sent to a plan that has contracted with a capitated
provider that is responsible for adjudicating the claim, then the plan
shall do the following:
(A) For a provider claim involving emergency service and care, the plan
shall forward the claim to the appropriate capitated provider within ten
(10) working days of receipt of the claim that was incorrectly sent to the
plan.
(B) For a provider claim that does not involve emergency service or care:
(i) if the provider that filed the claim is contracted with the plan's
capitated provider, the plan within ten (10) working days of the receipt
of the claim shall either: (1) send the claimant a notice of denial, with
instructions to bill the capitated provider or (2) forward the claim to
the appropriate capitated provider; (ii) in all other cases, the plan
within ten (10) working days of the receipt of the claim incorrectly sent
to the plan shall forward the claim to the appropriate capitated provider.
(3) If a claim is sent to the plan's capitated provider and the plan is
responsible for adjudicating the claim, the plan's capitated provider
shall forward the claim to the plan within ten (10) working days of the
receipt of the claim incorrectly sent to the plan's capitated provider.
(4) A plan or a plan's capitated provider that denies a claim because it
was filed beyond the claim filing deadline, shall, upon provider's
submission of a provider dispute pursuant to section 1300.71.38 and the
demonstration of good cause for the delay, accept, and adjudicate the
claim according to Health and Safety Code section 1371 or 1371.35, which
ever is applicable, and these regulations.
(5) A plan or a plan's capitated provider shall not request reimbursement
for the overpayment of a claim, including requests made pursuant to Health
and Safety Code Section 1371.1, unless the plan or the plan's capitated
provider sends a written request for reimbursement to the provider within
365 days of the Date of Payment on the over paid claim. The written notice
shall include the information specified in section (d)(3). The 365-day
time limit shall not apply if the overpayment was caused in whole or in
part by fraud or misrepresentation on the part of the provider.
(c) Acknowledgement of Claims. The plan and the plan's capitated provider
shall identify and acknowledge the receipt of each claim, whether or not
complete, and disclose the recorded date of receipt as defined by section
1300.71(a)(6) in the same manner as the claim was submitted or provide an
electronic means, by phone, website, or another mutually agreeable
accessible method of notification, by which the provider may readily
confirm the plan's or the plan's capitated provider's receipt of the claim
and the recorded date of receipt as defined by 1300.71(a)(6) as follows:
(1) In the case of an electronic claim, identification and acknowledgement
shall be provided within two (2) working days of the date of receipt of
the claim by the office designated to receive the claim, or
(2) In the case of a paper claim, identification and acknowledgement shall
be provided within fifteen (15) working days of the date of receipt of the
claim by the office designated to receive the claim.
(A) If a claimant submits a claim to a plan or a plan's capitated provider
using a claims clearinghouse, the plan's or the plan's capitated
provider's identification and acknowledgement to the clearinghouse within
the timeframes set forth in subparagraphs (1) or (2), above, whichever is
applicable, shall constitute compliance with this section.
(d) Denying, Adjusting or Contesting a Claim and Reimbursement for the
Overpayment of Claims.
(1) A plan or a plan's capitated provider shall not improperly deny,
adjust, or contest a claim. For each claim that is either denied, adjusted
or contested, the plan or the plan's capitated provider shall provide an
accurate and clear written explanation of the specific reasons for the
action taken within the timeframes specified in sections (g) and (h).
(2) In the event that the plan or the plan's capitated provider requests
reasonably relevant information from a provider in addition to information
that the provider submits with a claim, the plan or plan's capitated
provider shall provide a clear, accurate and written explanation of the
necessity for the request. If the plan or the plan's capitated provider
subsequently denies the claim based on the provider's failure to provide
the requested medical records or other information, any dispute arising
from the denial of such claim shall be handled as a provider dispute
pursuant to Section 1300.71.38 of title 28.
(3) If a plan or a plan's capitated provider determines that it has
overpaid a claim, it shall notify the provider in writing through a
separate notice clearly identifying the claim, the name of the patient,
the date of service and including a clear explanation of the basis upon
which the plan or the plan's capitated provider believes the amount paid
on the claim was in excess of the amount due, including interest and
penalties on the claim.
(4) If the provider contests the plan's or the plan's capitated provider's
notice of reimbursement of the overpayment of a claim, the provider,
within 30 working days of the receipt of the notice of overpayment of a
claim, shall send written notice to the plan or the plan's capitated
provider stating the basis upon which the provider believes that the claim
was not over paid. The plan or the plan's capitated provider shall receive
and process the contested notice of overpayment of a claim as a provider
dispute pursuant to Section 1300.71.38 of title 28.
(5) If the provider does not contest the plan's or the plan's capitated
provider's notice of reimbursement of the overpayment of a claim, the
provider shall reimburse the plan or the plan's capitated provider within
30 working days of the receipt by the provider of the notice of
overpayment of a claim.
(6) A plan or a plan's capitated provider may only offset an uncontested
notice of reimbursement of the overpayment of a claim against a provider's
current claim submission when: (i) the provider fails to reimburse the
plan or the plan's capitated provider within the timeframe of section (5)
above and (ii) the provider has entered into a written contract
specifically authorizing the plan or the plan's capitated provider to
offset an uncontested notice of overpayment of a claim from the contracted
provider's current claim submissions. In the event that an overpayment of
a claim or claims is offset against a provider's current claim or claims
pursuant to this section, the plan or the plan's capitated provider shall
provide the provider a detailed written explanation identifying the
specific overpayment or payments that have been offset against the
specific current claim or claims.
(e) Contracts for Claims Payment. A plan may contract with a claims
processing organization for ministerial claims processing services or
contract with capitated providers that pay claims, ( "plan's capitated
provider") subject to the following conditions:
(1) The plan's contract with a claims processing organization or a
capitated provider shall obligate the claims processing organization or
the capitated provider to accept and adjudicate claims for health care
services provided to plan enrollees in accordance with the provisions of
sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37,
1371.38, 1371.4, and 1371.8 of the Health and Safety Code and sections
1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of title 28.
(2) The plan's contract with the capitated provider shall require that the
capitated provider establish and maintain a fair, fast and cost-effective
dispute resolution mechanism to process and resolve provider disputes in
accordance with the provisions of sections 1371, 1371.1, 1371.2, 1371.22,
1371.35, 1371.36, 1371.37, 1371.38, 1371.4, and 1371.8 of the Health and
Safety Code and sections 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of
title 28, unless the plan assumes this function.
(3) The plan's contract with a claims processing organization or a
capitated provider shall require:
(i) the claims processing organization and the capitated provider to
submit a Quarterly Claims Payment Performance Report ( "Quarterly Claims
Report") to the plan within thirty (30) days of the close of each calendar
quarter. The Quarterly Claims Report shall, at a minimum, disclose the
claims processing organization's or the capitated provider's compliance
status with sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36,
1371.37, 1371.4, and 1371.8 of the Health and Safety Code and sections
1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of title 28;
(ii) the capitated provider to include in its Quarterly Claims Report a
tabulated record of each provider dispute it received, categorized by date
of receipt, and including the identification of the provider, type of
dispute, disposition, and working days to resolution, as to each provider
dispute received. Each individual dispute contained in a provider's
bundled notice of provider dispute shall be reported separately to the
plan; and
(iii) that each Quarterly Claims Report be signed by and include the
written verification of a principal officer, as defined by section
1300.45(o), of the claims processing organization or the capitated
provider, stating that the report is true and correct to the best
knowledge and belief of the principal officer.
(4) The plan's contract with a capitated provider shall require the
capitated provider to make available to the plan and the Department all
records, notes and documents regarding its provider dispute resolution
mechanism(s) and the resolution of its provider disputes.
(5) The plan's contract with a capitated provider shall provide that any
provider that submits a claim dispute to the plan's capitated provider's
dispute resolution mechanism(s) involving an issue of medical necessity or
utilization review shall have an unconditional right of appeal for that
claim dispute to the plan's dispute resolution process for ade novo review
and resolution for a period of 60 working days from the capitated
provider's Date of Determination, pursuant to the provisions of section
1300.71.38(a)(4) of title 28.
(6) The plan's contract with a claims processing organization or the
capitated provider shall include provisions authorizing the plan to assume
responsibility for the processing and timely reimbursement of provider
claims in the event that the claims processing organization or the
capitated provider fails to timely and accurately reimburse its claims
(including the payment of interest and penalties). The plan's obligation
to assume responsibility for the processing and timely reimbursement of a
capitated provider's provider claims may be altered to the extent that the
capitated provider has established an approved corrective action plan
consistent with section 1375.4(b)(4) of the Health and Safety Code.
(7) The plan's contract with the capitated provider shall include
provisions authorizing a plan to assume responsibility for the
administration of the capitated provider's dispute resolution mechanism(s)
and for the timely resolution of provider disputes in the event that the
capitated provider fails to timely resolve its provider disputes including
the issuance of a written decision.
(8) The plan's contract with a claims processing organization or a
capitated provider shall not relieve the plan of its obligations to comply
with sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37,
1371.4, and 1371.8 of the Health and Safety Code and sections 1300.71,
1300.71.38, 1300.71.4, and 1300.77.4 of title 28.
(f) Disclosures.
(1) A plan or a plan's capitated provider, with the agreement of the
contracted provider, may utilize alternate transmission methods to deliver
any disclosure required by this regulation so long as the contracted
provider can readily determine and verify that the required disclosures
have been transmitted or are accessible and the transmission method
complies with all applicable state and federal laws and regulations.
(2) To the extent that the Health Insurance Portability and Accountability
Act of 1996, as amended, limits the plan's or the plan's capitated
provider's ability to electronically transmit any required disclosures
under this regulation, the plan or the plan's capitated provider shall
supplement its electronic transmission with a paper communication that
satisfies the disclosure requirements.
(g) Time for Reimbursement. A plan and a plan's capitated provider shall
reimburse each complete claim, or portion thereof, whether in state or out
of state, as soon as practical, but no later than thirty (30) working days
after the date of receipt of the complete claim by the plan or the plan's
capitated provider, or if the plan is a health maintenance organization,
45 working days after the date of receipt of the complete claim by the
plan or the plan's capitated provider, unless the complete claim or
portion thereof is contested or denied, as provided in subdivision (h).
(1) To the extent that a full service health care service plan that meets
the definition of an HMO as set forth in paragraph 1300.71(a)(9) also
maintains a PPO or POS line of business, the plan shall reimburse all
claims relating to or arising out of non-HMO lines of business within
thirty (30) working days.
(2) If a specialized health care service plan contracts with a plan that
is a health maintenance organization to deliver, furnish or otherwise
arrange for or provide health care services for that plan's enrollees, the
specialized plan shall reimburse complete claims received for those
services within thirty (30) working days.
(3) If a non-contracted provider disputes the appropriateness of a plan's
or a plan's capitated provider's computation of the reasonable and
customary value, determined in accordance with section (a)(3)(B), for the
health care services rendered by the non-contracted provider, the plan or
the plan's capitated provider shall receive and process the non-contracted
provider's dispute as a provider dispute in accordance with section
1300.71.38.
(4) Every plan contract with a provider shall include a provision stating
that except for applicable co-payments and deductibles, a provider shall
not invoice or balance bill a plan's enrollee for the difference between
the provider's billed charges and the reimbursement paid by the plan or
the plan's capitated provider for any covered benefit.
(h) Time for Contesting or Denying Claims. A plan and a plan's capitated
provider may contest or deny a claim, or portion thereof, by notifying the
provider, in writing, that the claim is contested or denied, within thirty
(30) working days after the date of receipt of the claim by the plan and
the plan's capitated provider, or if the plan is a health maintenance
organization, 45 working days after the date of receipt of the claim by
the plan or the plan's capitated provider.
(1) To the extent that a full service health care service plan that meets
the definition of an HMO as set forth in paragraph 1300.71(a)(9) also
maintains a PPO or POS line of business, the plan shall contest or deny
claims relating to or arising out of non-HMO lines of business within
thirty (30) working days.
(2) If a specialized health care service plan contracts with a plan that
is a health maintenance organization to deliver, furnish or otherwise
arrange for or provide health care services for that plan's enrollees, the
specialized plan shall contest or denied claims received for those
services within thirty (30) working days.
(3) A request for information necessary to determine payer liability from
a third party shall not extend the Time for Reimbursement or the Time for
Contesting or Denying Claims as set forth in sections (g) and (h) of this
regulation. Incomplete claims and claims for which "information necessary
to determine payer liability" that has been requested, which are held or
pended awaiting receipt of additional information shall be either
contested or denied in writing within the timeframes set forth in this
section. The denial or contest shall identify the individual or entity
that was requested to submit information, the specific documents requested
and the reason(s) why the information is necessary to determine payer
liability
(i) Interest on the Late Payment of Claims.
(1) Late payment on a complete claim for emergency services and care,
which is neither contested nor denied, shall automatically include the
greater of $15 for each 12-month period or portion thereof on a
non-prorated basis, or interest at the rate of 15 percent per annum for
the period of time that the payment is late.
(2) Late payments on all other complete claims shall automatically include
interest at the rate of 15 percent per annum for the period of time that
the payment is late.
(j) Penalty for Failure to Automatically Include the Interest Due on a
Late Claim Payment as set forth in section (i). A plan or a plan's
capitated provider that fails to automatically include the interest due on
a late claim payment shall pay the provider $10 for that late claim in
addition to any amounts due pursuant to section (i).
(k) Late Notice or Frivolous Requests. If a plan or a plan's capitated
provider fails to provide the claimant with written notice that a claim
has been contested or denied within the allowable time period prescribed
in section (h), or requests information from the provider that is not
reasonably relevant or requests information from a third party that is in
excess of the information necessary to determine payor liability as
defined in section (a)(11), but ultimately pays the claim in whole or in
part, the computation of interest or imposition of penalty pursuant to
sections (i) and (j) shall begin with the first calendar day after the
expiration of the Time for Reimbursement as defined in section (g).
(l) Information for Contracting Providers. On or before January 1, 2004,
(unless the plan and/or the plan's capitated provider confirms in writing
that current information is in the contracted provider's possession),
initially upon contracting and in addition, upon the contracted provider's
written request, the plan and the plan's capitated provider shall disclose
to its contracting providers the following information in a paper or
electronic format, which may include a website containing this
information, or another mutually agreeable accessible format:
(1) Directions (including the mailing address, email address and facsimile
number) for the electronic transmission (if available), physical delivery
and mailing of claims, all claim submission requirements including a list
of commonly required attachments, supplemental information and
documentation consistent with section (a)(10), instructions for confirming
the plan's or the plan's capitated provider's receipt of claims consistent
with section (c), and a phone number for claims inquiries and filing
information;
(2) The identity of the office responsible for receiving and resolving
provider disputes;
(3) Directions (including the mailing address, email address and facsimile
number) for the electronic transmission (if available), physical delivery,
and mailing of provider disputes and all claim dispute requirements, the
timeframe for the plan's and the plan's capitated provider's
acknowledgement of the receipt of a provider dispute and a phone number
for provider dispute inquiries and filing information; and
(4) Directions for filing substantially similar multiple claims disputes
and other billing or contractual disputes in batches as a single provider
dispute that includes a numbering scheme identifying each dispute
contained in the bundled notice.
(m) Modifications to the Information for Contracting Providers and to the
Fee Schedules and Other Required Information. A plan and a plan's
capitated provider shall provide a minimum of 45 days prior written notice
before instituting any changes, amendments or modifications in the
disclosures made pursuant to paragraphs (l) and (o).
(n) Notice to the Department. Within 7 calendar days of a Department
request, the plan and the plan's capitated providers shall provide a pro
forma copy of the plan's and the plan's capitated provider's "Information
to Contracting Providers" and "Modification to the Information for
Contracting Providers."
(o) Fee Schedules and Other Required Information. On or before January 1,
2004, (unless the plan and/or the plan's capitated provider confirms in
writing that current information is in the contracted provider's
possession), initially upon contracting, annually thereafter on or before
the contract anniversary date, and in addition upon the contracted
provider's written request, the plan and the plan's capitated provider
shall disclose to contracting providers the following information in an
electronic format:
(1) The complete fee schedule for the contracting provider consistent with
the disclosures specified in section 1300.75.4.1(b); and
(2) The detailed payment policies and rules and non-standard coding
methodologies used to adjudicate claims, which shall, unless otherwise
prohibited by state law:
(A) when available, be consistent with Current Procedural Terminology
(CPT), and standards accepted by nationally recognized medical societies
and organizations, federal regulatory bodies and major credentialing
organizations;
(B) clearly and accurately state what is covered by any global payment
provisions for both professional and institutional services, any global
payment provisions for all services necessary as part of a course of
treatment in an institutional setting, and any other global arrangements
such as per diem hospital payments, and
(C) at a minimum, clearly and accurately state the policies regarding the
following: (i) consolidation of multiple services or charges, and payment
adjustments due to coding changes, (ii) reimbursement for multiple
procedures, (iii) reimbursement for assistant surgeons, (iv) reimbursement
for the administration of immunizations and injectable medications, and
(v) recognition of CPT modifiers.
The information disclosures required by this section shall be in
sufficient detail and in an understandable format that does not disclose
proprietary trade secret information or violate copyright law or patented
processes, so that a reasonable person with sufficient training,
experience and competence in claims processing can determine the payment
to be made according to the terms of the contract.
A plan or a plan's capitated provider may disclose the Fee Schedules and
Other Required Information mandated by this section through the use of a
website so long as the plan or the plan's capitated provider provides
written notice to the contracted provider at least 45 days prior to
implementing a website transmission format or posting any changes to the
information on the website.
(p) Waiver Prohibited. The plan and the plan's capitated provider shall
not require or allow a provider to waive any right conferred upon the
provider or any obligation imposed upon the plan by sections 1371, 1371.1,
1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of the
Health and Safety Code and sections 1300.71, 1300.71.38, 1300.71.4, and
1300.77.4 of title 28, relating to claims processing or payment. Any
contractual provision or other agreement purporting to constitute, create
or result in such a waiver is null and void.
(q) Required Reports.
(1) Within 60 days of the close of each calendar quarter, the plan shall
disclose to the Department in a single combined document: (A) any emerging
patterns of claims payment deficiencies; (B) whether any of its claims
processing organizations or capitated providers failed to timely and
accurately reimburse 95% of its claims (including the payment of interest
and penalties) consistent with sections 1371, 1371.1, 1371.2, 1371.22,
1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of the Health and Safety
Code and sections 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of title
28; and (C) the corrective action that has been undertaken over the
preceding two quarters. The first report from the plan shall be due within
45 days after the close of the calendar quarter that ends 120 days after
the effective date of these regulations.
(2) Within 15 days of the close of each calendar year, beginning with the
2004 calendar year, the plan shall submit to the Director, as part of the
Annual Plan Claims Payment and Dispute Resolution Mechanism Report as
specified in section 1367(h) of the Health and Safety Code and section
1300.71.38(k) of title 28, in an electronic format (to be supplied by the
Department), information disclosing the claims payment compliance status
of the plan and each of its claims processing organizations and capitated
providers with each of sections 1371, 1371.1, 1371.2, 1371.22, 1371.35,
1371.36, 1371.37, 1371.4, and 1371.8 of the Health and Safety Code and
sections 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4 of title 28. The
Annual Plan Claims Payment and Dispute Resolution Mechanism Report for
2004 shall include claims payment and dispute resolution data received
from October 1, 2003 through September 30, 2004. Each subsequent Annual
Plan Claims Payment and Dispute Resolution Mechanism Report shall include
claims payment and dispute resolution data received for the last calendar
quarter of the year preceding the reporting year and the first three
calendar quarters for the reporting year.
(A) The claims payment compliance status portion of the Annual Plan Claims
Payment and Dispute Resolution Mechanism Report shall: (i) be based upon
the plan's claims processing organization's and the plan's capitated
provider's Quarterly Claims Payment Performance Reports submitted to the
plan and upon the audits and other compliance processes of the plan
consistent with section 1300.71.38(m) and (ii) include a detailed,
informative statement: (1) disclosing any established or documented
patterns of claims payment deficiencies, (2) outlining the corrective
action that has been undertaken, and (3) explaining how that information
has been used to improve the plan's administrative capacity, plan-provider
relations, claim payment procedures, quality assurance system (process)
and quality of patient care (results). The information provided pursuant
to this section shall be submitted with the Annual Plan Claims Payment and
Dispute Resolution Mechanism Report and may be accompanied by a cover
letter requesting confidential treatment pursuant to section 1007 of title
28.
(r) Confidentiality.
The claims payment compliance status portion of the plan's Annual Plan
Claims Payment and Dispute Resolution Mechanism Report and the Quarterly
disclosures pursuant to section (q)(1) to the Department shall be public
information except for information disclosed pursuant to section
(q)(2)(A)(ii), that the Director, pursuant to a plan's written request,
determines should be maintained on a confidential basis.
(s) Review and Enforcement.
(1) The Department may review the plan's and the plan's capitated
provider's claims processing system through periodic medical surveys and
financial examinations under sections 1380, 1381 or 1382 of the Health and
Safety Code, and when appropriate, through the investigation of complaints
of demonstrate and unjust payment patterns.
(2) Failure of a plan to comply with the requirements of sections 1371,
1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of
the Health and Safety Code and sections 1300.71, 1300.71.38, 1300.71.4,
and 1300.77.4 of title 28 may constitute a basis for disciplinary action
against the plan. The civil, criminal, and administrative remedies
available to the Director under the Health and Safety Code and this
regulation are not exclusive, and may be sought and employed in any
combination deemed advisable by the Director to enforce the provisions of
this regulation.
(3) Violations of the Health and Safety Code and this regulation are
subject to enforcement action whether or not remediated, although a plan's
identification and self-initiated remediation of deficiencies may be
considered in determining the appropriate penalty.
(4) In making a determination that a plan's or a plan's capitated
provider's practice, policy or procedure constitutes a "demonstrable and
unjust payment pattern" or "unfair payment pattern," the Director shall
consider the documentation or justification for the implementation of the
practice, policy or procedure and may consider the aggregate amount of
money involved in the plan's or the plan's capitated provider's action or
inaction; the number of claims adjudicated by the plan or plan's capitated
provider during the time period in question, legitimate industry
practices, whether there is evidence that the provider had engaged in an
unfair billing practice, the potential impact of the payment practices on
the delivery of health care or on provider practices; the plan's or the
plan's capitated provider's intentions or knowledge of the violation(s);
the speed and effectiveness of appropriate remedial measures implemented
to ameliorate harm to providers or patients, or to preclude future
violations; and any previous related or similar enforcement actions
involving the plan or the plan's capitated provider.
(5) Within 30 days of receipt of notice that the Department is
investigating whether the plan's or the plan's capitated provider's
practice, policy or procedure constitutes a demonstrable and unjust
payment pattern, the plan may submit a written response documenting that
the practice, policy or procedure was a necessary and reasonable claims
settlement practice and consistent with sections 1371, 1371.35 and 1371.37
of the Health and Safety Code and these regulations;
(6) In addition to the penalties that may be assessed pursuant to section
(s)(2), a plan determined to be engaged in a Demonstrable and Unjust
Payment Pattern may be subject to any combination of the following
additional penalties:
(A) The imposition of an additional monetary penalty to reflect the
serious nature of the demonstrable and unjust payment pattern;
(B) The imposition, for a period of up to three (3) years, of a
requirement that the plan reimburse complete and accurate claims in a
shorter time period than the time period prescribed in section (g) of this
regulation and sections 1371 and 1371.35 of the Health and Safety Code;
and
(C) The appointment of a claims monitor or conservator to supervise the
plan's claim payment activities to insure timely compliance with claims
payment obligations.
The plan shall be responsible for the payment of all costs incurred by the
Department in any administrative and judicial actions, including the cost
to monitor the plan's and the plan's capitated provider's compliance.
(t) Compliance. Plans and the plans' capitated providers shall be fully
compliant with these regulations on or before January 1, 2004.
Note: Authority cited: Sections 1344, 1371.38, 1371.1 and 1371.8, Health
and Safety Code. Reference: Sections 1367, 1370 and 1371.38, Health and
Safety Code.
HISTORY
1. New section filed 7-24-2003; operative 8-23-2003 (Register 2003, No.
30).
For prior history of title 10, section 1300.71, see Register 80, No. 19.
28 CA ADC s 1300.71
END OF DOCUMENT
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