HCC LIFE INSURANCE COMPANY. Notification & Specific/Aggregate Stop Loss & Life Claims Guide

Transcription

1 HCC LIFE INSURANCE COMPANY Notification & Specific/Aggregate Stop Loss & Life Claims Guide HCC Life Insurance Company

2 This guide is being provided to you as a reference when submitting potential claim notifications or reimbursement claim requests for excess loss reimbursement to. HCC LIFE INSURANCE COMPANY Forms included in this guide are updated periodically to keep pace with technology and industry advances as well as to enable HCC Life Insurance Company to operate more efficiently. For your convenience, we have made this guide available online at: Special Note: Nothing in this guide changes the terms of any excess loss policy. The excess policy language will take precedence if there is any conflict between this guide and the policy, the policy will control.

3 TABLE OF CONTENTS I. INTRODUCTION... 5 II. SPECIFIC CLAIM NOTIFICATION... 6 A. Notification Requirements... 6 B. Trigger Diagnosis List... 6 III. SPECIFIC CLAIM REIMBURSEMENT REQUESTS... 9 C. Filing Guidelines... 9 D. Standard or Simplified Claim Filing... 9 E. Filing an Initial Claim Standard Claim Submission Simplified Claim Submission (Pre-authorization required) F. Filing Supplemental Reimbursement Claims G. Filing Simultaneous Funding Requests IV. AGGREGATE CLAIM REIMBURSEMENT REQUESTS A. TPA Reporting Responsibilities B. Monthly Deductible Advance Reimbursement C. Year End Aggregate Claims V. GENERAL INFORMATION A. Eligibility B. Leave of Active Service C. Miscellaneous Expenses D. Legal Matters/Complaints E. Subrogation/Third Party Liability F. Hospital Audits G. Medical Records H. Contract Terms I. Funding & Timely Payment of Claims J. Split Funded Premium Claims HCC Life Insurance Company 3

4 K. Overpayments & Refunds L. Dental, Vision, Weekly Income & Drug Card Charges M. Disclosure VI. LIFE & DISABILITY CLAIMS VII. SPECIFIC & AGGREGATE CLAIM FORMS HCC Life Insurance Company 4

5 I. INTRODUCTION This publication should be used as a reference guide. It contains information regarding requirements for the submission of required early notification of potential claims, Life claims as well as Specific and Aggregate stop loss requests for policyholders covered under HCC Life Insurance Company s stop loss policy. TPA claims personnel should become familiar with these requirements to facilitate an efficient and speedy review process, which is of benefit to our mutual client, the Policyholder. From time to time, the guide will be updated to reflect company and/or procedure changes. Described herein are the policies and procedures utilized by HCC Life Insurance Company. It is important to note that the policies and procedures outlined in this guide are general in nature. The requirements of each stop loss carrier s application and policy language are binding upon the Policyholder. Language contained in this guide cannot be relied upon to bind the Carrier or Policyholder in any matter that differs from the coverage expressly stated within the contract. Forms are included in this guide for submitting Life, Aggregate and Specific notification/reimbursement requests in sections VI and VII. Administrative and claims functions are handled in HCC Life Insurance Company Home Office in Kennesaw Georgia. All reimbursement claims related information and requests should be sent to our home office location indicated below. HCC Life Insurance Company 225 TownPark Drive, Suite 145 Kennesaw, GA Carrier(s) HCC Life Insurance Company Telephone Number (800) Approval of a Third Party Administrator (TPA) is based, in part, on the overall claims administration and experience of the claims personnel. Therefore, HCC Life Insurance Company must be advised of any major changes in claims procedures, claims systems, or claims personnel. In addition, if the TPA changes during a Plan Sponsor s contract period, the Contract is terminated and no claim requests can be honored unless the new administrator is approved by HCC Life Insurance Company. To avoid this situation, you must notify the HCC Life Insurance Company Policy Issuance Department to insure that any such change can be reviewed and approved. HCC Life Insurance Company 5

6 II. SPECIFIC CLAIM NOTIFICATION A. Notification Requirements The earlier notification of large or potentially large claims are received, the sooner management of the associated costs can be implemented. TPAs should notify HCC Life Insurance Company of possible catastrophic or large claims according to the procedures indicated below. The Preliminary Claim Unit (PCU) handles these early notifications. Utilization Review Vendors, Brokers and Third Party Administrators should submit information directly to HCC Life Insurance Company regarding claimants with catastrophic conditions or claimants who have exceeded 50% of their specific deductible. The Notification/Initial Claim form (which can be found in the forms section of this document) can be completed and mailed, faxed to (770) , ed to or uploaded directly to PCU. Information can also be submitted by telephone to (800) Receipt of notifications from a vendor s site or using other third party software must be approved. To discuss the options of receipt or reporting requirements, please contact the Preliminary Claim Unit at i. Catastrophic Claims (See the Trigger Diagnosis List) Conditions and procedures likely to exceed specific deductibles are outlined in the Trigger Diagnosis list. These conditions tend to be chronic, require extensive ongoing treatment, hospitalization, case management and/or high cost medications. ii. Other Large Claims (50% of the Specific Deductible) When a claimant reaches or has the potential to reach 50% of their specific deductible, notification should be submitted. This will allow us to appropriately establish reserves in preparation for claim submissions. Examples of instances that could exceed 50% of specific deductibles would be traumas, lengthy in-patient stays of 7 days or more, multiple admissions (3 in 2 months), surgery or complications of surgery. B. Trigger Diagnosis List A Trigger Diagnosis List can be found on the following page (pg. 7 of this guide.) HCC Life Insurance Company 6

7 HCC LIFE INSURANCE COMPANY TRIGGER DIAGNOSIS LIST Suggested Categories and Guidelines for Identifying Potential Large Claims The specific diagnoses listed below are key indicators of potential catastrophic cases and should be referred to HCC Life Insurance Company. The following instances should also be explored for potential case management. Transplants Hyperalimentation (TPN) A length of stay request more than seven (7) days Home IV antibiotic therapy Trauma/Multiple Injuries High Risk Pregnancy (Multiple Births) Request for transfer to a rehabilitation facility Initiation of hemodialysis AIDS ICD-9 Codes Infectious Diseases ICD-9 Codes Human Immunodeficiency Virus 042 Meningitis Encephalopathy Subacute Bacterial Endocarditis 421 Pneumocystis Carinii Pneumonia Crohn's Disease Toxoplasmosis Osteomyelitis Bronchial or Pulmonary Candidiasis Tuberculosis Malignant Neoplasms -Any Site Cancers Blood Disorders Neurofibromatosis Aplastic Anemia Coagulation Defects Diabetes Mellitus Complications Immune Deficiencies Circulatory Disorders Amputations Amputations Arms and Hands Head and Spinal Trauma Legs and Feet Quadraplegia Paraplegia Burns Hemiplegia Over 20% of the Body Spinal Cord Injury Closed Head Injury Cardiovascular Disease Complications of trauma Cardiomyopathy Heart Failure Neuromuscular Intermediate Coronary Syndrome Amyotrophic Lateral Sclerosis Primary Pulmonary Hypertension (Lou Gehrig's disease) Myopathy Cerebral Vascular Disease with Neurological Deficits Guillain-Barre Anoxic Brain Damage Cerebral Palsy Multiple Fractures, Skull/Face Multiple Sclerosis 340 Intracerebral Hemorrhage Coma Renal Failure Acute Vascular Disease (Stroke/CVA) 436 Other High-Risk Neonatal Gaucher s Disease Intestinal Malabsorption Cirrhosis of the liver Spina bifida Emphysema Other congenital anomalies of nervous Morbid Obesity system (includes hydrocephalus) Alpha-1 Antitrypsin Deficiency Congenital anomalies of heart Post-inflammatory Pulmonary Short gestation, low birth weight <2,500g Fibrosis 515 Intrauterine hypoxia and birth asphyxia Hepatitis Respiratory Distress Syndrome 769 Pancreatitis Apnea/Bradycardia Lupus Broncho-Pulmonary Dysplasia (BPD) Aneurysm Cystic Fibrosis Biliary Atresia High Risk Obstetrical Multiple Gestations Premature Rupture of Membranes /11/04 PAGE 1 OF 2

8 HCC LIFE INSURANCE COMPANY TRIGGER DIAGNOSIS LIST The specific procedures listed below are key indicators of potential catastrophic cases and should be referred to HCC Life Insurance Company. Transplants should be referred to our Specialty Claim Unit (SCU) for cost containment assistance prior to transplantation. ICD-9 CODE CPT CODE Craniotomy Hyperbaric Oxygenation Plasmapheresis (Apheresis) Laryngectomy/Radical Neck Dissection Tracheostomy Implant Cardiac Assist Device Hemodialysis Pancreatectomy , Ventilator patient greater than 4 days Insertion shunt/fistula Gastric Bypass , 43843, 43846, TPN (Total Parenteral Nutrition) N/A Transplants V42 codes See Below Transplant Type CPT Bone Marrow Transplant Heart Heart-Lung Small Bowel Liver Lung (single) Lung (double) Pancreas 48160, Kidney /11/04 PAGE 2 OF 2

9 III. SPECIFIC CLAIM REIMBURSEMENT REQUESTS C. Filing Guidelines The Notification/Initial Claim form (which can be found in the forms section of this document) can be completed and mailed, faxed to (770) , ed to In order to expedite claim reimbursement, we request your cooperation in adhering to the following filing procedures: 1. Claim requests should be for $500 or greater. Unless filing for the final claim submission, please accumulate your requests and send them to us once they exceed $ A complete claim request for reimbursement must be filed with HCC Life Insurance Company on the customary Notice/Proof of Loss form (located at the end of this Guide) within 90 days after the date the Plan Sponsor receives the claim. A complete claim must include a signed and dated Specific Initial or Supplemental Request form, enrollment information that clearly establishes eligibility under the Plan at a minimum, the information outlined in the Simplified Claim Submission (Section C.2) of this guide on page 6. Consult your Stop loss Policy for additional details. 3. Any claims for reimbursement received by HCC Life Insurance Company more than 90 days after the last date for which a claim can be reimbursed under the terms of the Excess Loss Contract, will be denied. Consult your Stop loss Policy for additional details D. Standard or Simplified Claim Filing Specific claims (Initial and Supplemental) are filed in one of two formats, Standard or Simplified. The Standard format requires that the TPA submit traditional stop loss data including enrollment and eligibility information, all itemized bills, explanations of benefit {EOB} along with all supporting documentation. The Simplified version permits a TPA to submit enrollment and eligibility information and supporting documentation along with a computerized report in lieu of the individual bills and corresponding EOB. This kind of report is often referred to as a rip report and provides information in a format that captures the EOB and itemized bill data. Please note however that the Simplified format still requires that, itemized bills and explanations be provided for all charges exceeding $20,000. HCC Life Insurance Company has an approval process that all TPAs must satisfy in order to be granted the opportunity to file claims on a Simplified basis. Once approved, each TPA is subject to periodic review (audits are performed either in our office or the TPA location) to ensure ongoing acceptable claim accuracy standards. Should this review reveal any serious concerns regarding claim adjudication, the TPA could lose the opportunity to utilize the Simplified filing option. Unless you have been pre-authorized to file claims using the Simplified format, Specific claims must be filed using the Standard format. E. Filing an Initial Claim Once a claimant s eligible paid charges exceed the Specific Deductible, a request for reimbursement should be made sent to HCC Life Insurance Company. A fully completed Specific Claim Notification/Initial Filing form along with the following documentation should be submitted: HCC Life Insurance Company 9

10 1. Standard Claim Submission A. Specific Claim Notification/Initial Filing form B. Copy of employee s Enrollment Card, including the hire date and the original effective date C. Copy of administrator s claim form if the claim is for a dependent D. Complete details regarding eligibility, and if applicable, information regarding work status, preexisting/hipaa documentation, subrogation, COB, provider discounts and COBRA {including a copy of the election form and COBRA payment verification for all months} E. Copies of Explanations of Benefit [EOB s] attached to the corresponding itemized bills. Note: all itemized bills should be date stamped indicating receipt date by the TPA F. Check copies, if not a part of the Explanation of Benefit G. Completion of the Simultaneous Funding portion of the form, or Specific Supplemental Claim Request, if applicable H. Miscellaneous information as applicable: A. Complete accident details including how, when and where the accident occurred. We have included our Liability Questionnaire located in the Forms section of this guide as an aid. Completion of this form is optional. B. Police Report for Motor Vehicle Accidents or for services for which a Law Enforcement agency is involved C. HCC Life Insurance Company Subrogation and Right of Recovery Reimbursement Agreement if charges were incurred as a result of third party liability D. Coordination of Benefits (COB) documentation E. PPO Discount/Repricing sheets F. Large Case Management reports 2. Simplified Claim Submission (Pre-authorization required) Complete details regarding eligibility, and when applicable, information regarding work status, preexisting/hipaa documentation, subrogation, Coordination of Benefits {COB}, provider discounts, COBRA Election Form and verification of premium payment for all months Specific Claim Notification/Initial Filing form Copy of Enrollment Card including the hire date and the original effective date Itemized provider bills for individual bills exceeding $20,000 (a UB-04 summary bill will satisfy this requirement for hospital charges) Copy of the TPA s Claim Form if the claim is on a dependent Completion of the Simultaneous Funding portion of the form, if applicable System generated report containing the following information: Employer /Group name Employee Claimant name Provider name Dates of service and payments Types of service - CPT Codes/Revenue Codes Diagnosis - ICD 9 Deductibles and coinsurance limits Ineligible or denied benefits Check numbers Charge amounts and paid amount entries Total payment line calculation Entries of voids and refunds when applicable PPO discounts HCC Life Insurance Company 10

11 F. Filing Supplemental Reimbursement Claims After the initial claim has been filed, a supplemental claim may be submitted by completing a Specific Supplemental Claim Request form and forwarding it along with the documentation listed below. The Specific Supplemental Claim Request was designed to minimize the amount of time TPAs spend preparing claims for reimbursement filings. It allows certain Employee & Claimant information to be omitted, provided there have been no changes since the initial or last supplemental claim submission. 1. Standard Claim Submission Supplemental claims should be submitted with items c-h, which are listed in the Initial Claim section. A. Simplified Claim Submission Supplemental claims should be submitted with items c-g, which are listed in the Initial Claim section G. Filing Simultaneous Funding Requests We, at HCC Life Insurance Company recognizes that occasionally groups may have difficulty paying extremely large provider bills, especially when a prompt pay discount is involved. In an effort to assist in these situations, the Simultaneous Funding option, a value added service, is available. This option can provide cash-flow assistance in these instances. All Simultaneous Funding reimbursement requests will be processed in received date order. These requests will not be rushed or expedited, unless provider discounts are at stake and might be lost. HCC Life Insurance Company must receive written notice of Simultaneous Funding requests no more than (7) seven calendar days after the expiration date of the Stop loss Contract. A fully completed and signed Initial or Supplemental Reimbursement form, including the Simultaneous Funding section is required for each Simultaneous Funding request and should be in amounts equal to or greater than $500. Once the TPA s adjudication process is complete, (as described in Parts C - III and Part D), Stop loss requests should be submitted to HCC Life Insurance Company along with a fully completed and signed Specific Initial or Supplemental Request form, which should include completion of the Simultaneous Funding portion of the form, which verifies that: 1. Prior to the expiration of the Stop loss Contract, the Third Party Administrator processed all eligible bills related to the Simultaneous Funding request. 2. Checks totaling at least the amount of the Specific Deductible were processed, paid, and released to the providers indicated prior, to the expiration of the Specific Contract, or prior to the Simultaneous Funding Reimbursement Request, whichever is earlier. 3. The Plan Sponsor has unconditionally paid all other claims for the Claimant. 4. The Simultaneous Funding option is a value added service that can be changed or withdrawn at our discretion without prior notice. HCC Life Insurance Company 11

12 5. Simultaneous Funding requests will not be accepted if received within (30) thirty days of the date of the policy s cancellation or premature termination. For example, if a Group s contract period runs from 4/01/10 3/31/11 and that Contract is cancelled prematurely on 2/01/11, Simultaneous Funding requests would be prohibited from January Note Contracts are written on a Reimbursement basis only. This means, the Plan Sponsor is responsible for paying all eligible expenses. Subsequently, HCC Life Insurance Company processes requests for reimbursement of these expenses. The only mechanism that allows amendment of this provision, to assist clients with payment of large medical charges is via our Simultaneous Funding option. Therefore, if requesting Simultaneous Funding, it is critical that all guidelines outlined in Section III.3 Part E (Filing a Simultaneous Funding Request) of this guide. If these guidelines are not followed, the Specific Claim Reimbursement submission will be handled on a Reimbursement basis, which could mean that part or all of the Stop loss request could be denied. FILING REQUIREMENT REMINDER: Reimbursement requests must be filled within 90 days after the end of the time specified for payment of claims under the Excess Loss Policy. Failure to do so will result in claim denial. HCC Life Insurance Company 12

13 IV. AGGREGATE CLAIM REIMBURSEMENT REQUESTS A. TPA Reporting Responsibilities TPAs are required to report full aggregate claims data within 15 days after the close of any calendar month. Information should include monthly and Year-To-Date claims summaries (i.e. census, paid amounts, ineligible claims, etc ) The report should indicate the appropriate contract dates and type of contract (e.g. Paid, 12/15, etc.) You must file reimbursement requests within 90 days after the end of the time specified for payment of claims under the Excess Loss Policy. Failure to do so will result in claim denial Note: If you have an automated Y-T-D aggregate report that summarizes the same information, please feel free to submit your report instead of completing ours. B. Monthly Deductible Advance Reimbursement (Also Known As Monthly Aggregate Accommodation) Monthly Deductible Advance Reimbursement is offered as an option to our Stop loss Contracts. The Monthly Deductible Advance reimbursement is intended as a loan to reimburse certain benefits otherwise reimbursable at the end of the contract term, and thus aid the cash flow of the Employer. It is important to note that this accommodation is not a cash advance. The plan sponsor prior to receiving a monthly accommodation must pay all claims. Filing a Monthly Deductible Advance Reimbursement In order to file a Monthly Deductible Advance Reimbursement; please submit the following documentation: a. Completed Monthly Deductible Advance Reimbursement Claim Form. b. Monthly Loss Summary Reports showing the Policyholder s paid claims data and Aggregate census information as noted in section A. c. Paid Claims Analysis showing employee name, claimant name, service date, type of service, amount of charges and amount paid. Please Note the Following o Monthly Deductible Advance Reimbursement must be received within 15 days following the end of the month for which the accommodation is requested. For example, if you are filing for the month of June, then we must receive your request no later than July 15. o Monthly Deductible Advance Reimbursement must comply with the Carrier s minimum filing requirements of $1,000. Please consult the appropriate contract for the exact dollar level. o Monthly Deductible Advance Reimbursement is not available in the last month of the contract or during a run-out provision. Please refer to the Carrier s contract for further clarification. o If the Policyholder has not incurred an aggregate claim at the end of the contract year, then the Carrier must be refunded all Monthly Deductible Advance Reimbursement payments at contract termination/expiration. If year to date claims fall below the accumulated aggregate deductible in a given month, all accommodation payments must be refunded in the following month. Review of the Carrier s contract is necessary to determine the applicable time frame. HCC Life Insurance Company 13

14 o The Carrier s require coverage to be in effect for a minimum of one or three months before reimbursement of a Monthly Deductible Advance Reimbursement is available. Please consult the appropriate Contract to determine the waiting period. o Failure to reply within 15 days will result in a 2% per month penalty until such amounts are repaid Monthly Deductible Advance Reimbursement Claim Form A copy of the Monthly Advance Reimbursement Claim Form is included in the Forms section of this guide C. Year End Aggregate Claims You must file reimbursement requests within 90 days after the end of the time specified for payment of claims under the Excess Loss Policy. Failure to do so will result in claim denial. a. Filing a Year End Aggregate Claim In order to file a year-end aggregate claim, please submit the following documentation for your contract period: a. Completed Year End Aggregate Claim Form b. Paid Claims Analysis report indicating claimant s name, incurred date, charged amount, paid amount and paid date c. Eligibility listing which identifies birth date, effective date, termination date and coverage type d. Proof of funding to include bank statements and/or deposit slips * e. Void & Refund report * f. Benefit/Service Code report g. Aggregate report (Monthly Loss Summary Reports) h. Specific report- showing claimants that have exceeded the Specific Deductible/Loss Limit i. Listing of payments made outside the Aggregate contract (i.e. Dental, Weekly Income, Vision, PPO Fees-capitated, PCS Administrative Fees) j. Check Register k. Outstanding overpayment and subrogation log l. Rx invoices if Rx is covered under the Aggregate contract b. Year-End Aggregate Claim Form A copy of the Year-End Aggregate Claim Form is included in the Forms section of this Guide. *We also request this information the month following expiration of your stop loss contract to review for retroactive adjustments. HCC Life Insurance Company 14

15 V. GENERAL INFORMATION A. Eligibility In order for a covered person s claims to be eligible under the Stop loss Policy, they must first satisfy the eligibility requirements of the Employer s Plan. Most Plan Documents contain definitions for Employees and Dependents, including waiting periods for new hires, as well as outlining termination provisions. Since the Stop loss Policy reinsures the Policyholder s Plan Document, the contract provides for reimbursement based on the exact wording of the Employer s Plan Document. Therefore, it is extremely important that all parties understand the Plan benefits and that HCC Life Insurance Company be provided with information that clearly and precisely indicates how a person is eligible under the Plan. For this reason, our Specific Claim Notification/Initial Filing (used for Initial claim filings) and our Specific Supplemental Claim Request (used for Supplemental claim filings) request detailed information regarding how a claimant has been and continues to be eligible. In order for HCC Life Insurance Company to perform a complete and thorough review, these questions must be answered in their entirety, if not, the review process can be delayed. When determining if an individual is eligible under the Plan, please consider the following questions: For employees What is his/her employment status? 1. Is he/she actively working the minimum required number of hours to be covered under the Plan? (The standard is generally 30 hours, but each plan varies) 2. Is he/she retired? If so, are retirees covered under the Plan and when did this employee retire? Are retirees covered under the Stop loss contract? 3. Is he/she disabled? If so, when was his/her last day actively at work and how is coverage being continued? Sick time, vacation, FMLA, Leave of Absence, COBRA or other? 4. Is he/she on a temporary Leave of Absence? If yes, what are the Plan s provisions regarding the length of time such an individual would be allowed to remain on the Plan? Should he/she have been offered COBRA? If so, when? 5. Is he/she temporarily or permanently laid off? If yes, what is the Plan s time frame for allowing such an individual coverage under the Plan? Please refer to item B of this section for additional information regarding Leave of Active Service. For dependents Does he/she meet the Plan s definition of a Dependent? If a child, what is the Plan Document s limitation regarding the child s age? If over that age, (many plans use age 19) does the child have to be a full-time student? If so, please provide full-time student verification from the school. HCC Life Insurance Company 15

16 Did the dependent elect COBRA? If so, we would need copies of the COBRA Election form and verification that all of the COBRA premiums have been paid. For your convenience, HCC Life Insurance Company has developed a Confirmation of Eligibility/Work Status form. Should you deem it appropriate, you may send this form to the Employer to request updated eligibility information. A copy of this form is in Part VII of this guide. B. Leave of Active Service Guidelines regarding continuation of benefits when an employee stops working for reasons other than termination of employment are outlined below. Generally an individual s benefits cease when active service ceases. Active service is considered to cease on the last day worked unless due to a temporary layoff, a bona fide leave of absence, or a temporary disability. The eligibility section of the Employer s Plan Document should be reviewed to determine if an employee meets the Plan s requirements for an active full-time employee. If an employee is no longer considered active, the extension of active service provision of the Employer s Plan Document should be reviewed to determine if his/her coverage could be extended. The extension of active service provision defines sick time, Family Medical Leave (FMLA), leave of absence, etc. If an employee does not return to work after the extension of active service period, his/her benefits may be continued under COBRA using the following guidelines: Generally, once an employee exhausts his/her extension of active service period, active plan benefits are considered terminated, and the person has had a qualifying event under COBRA. Benefits can then be continued for the applicable COBRA period, or the remainder of the COBRA period if the employer chooses to have the extension of active service provision run concurrent with the COBRA period. This is the employer s choice. The Employer s Plan Document must address extension of active service in order for an employee to continue his/her coverage once an employee stops working for reasons other than termination of employment. The consequences of not having this provision are as follows: In the absence of such a modification to the Plan s normal termination provisions, a very strict interpretation of the contract could result in coverage being terminated in 12 weeks, (The Family Medical Leave Act) from the end of the first full week in which the employee failed to maintain full-time active status. This could cause a serious conflict with actual employment practices. If the Employer s Plan Document is silent on this issue or if it simply indicates that benefits cease when employment terminates, then the following position will be taken: In the absence of a specific provision extending benefits during a temporary absence from work due to layoff, leave of absence or disability, we take the view that benefits will be continued for twelve (12) months starting from the date last worked. At the end of the twelve (12) month period, the employee will be considered to have terminated, unless evidence can be provided that benefits are being continued under COBRA. If the Plan s extension of active service is greater than twelve (12) months, the HCC Life Insurance Company underwriter will rate the case accordingly. HCC Life Insurance Company 16

17 C. Miscellaneous Expenses Because cost containment is an essential function in our industry, each section below outlines which costs associated with these functions that are and are not reimbursable under the stop loss contract. Third party administrators (TPAs) that assess fees for reviews and determinations associated with their role as administrator in the adjudication of claims on behalf of the plan are not reimbursable. Such fees include activities such as TPA initiated medical reviews, reasonable and customary (R&C) determinations, procedure reviews, experimental/investigation reviews, PPO access fee, or custodial care reviews. HCC Life Insurance Company will reimburse claim related expenses based on the following: 1. Repricing Fees Percentage (%) of Savings HCC Life utilizes entities to re-price expenses when administrators do not attempt to obtain savings, and we do reimburse fees associated with this effort. Recognizing the benefits of the savings for the plan participant, HCC Life will reimburse re-pricing fees (from an outside vendor not related to the TPA) up to a maximum of 25% of savings provided the claim payments plus the fees exceed the Specific Deductible. We believe this is a generous compromise as this is outside the provisions of the medical stop loss policy. Vendor fees are usually paid by HCC Life Insurance Company if a discount is obtained via repricing efforts of the Preliminary Claim Unit (PCU) or the Specialty Claim Unit (SCU) and the Specific Deductible has been or will be exceeded. Specific Excess: Re-pricing fees (from an outside vendor not related to the TPA) structured as a percent % of savings (25% maximum) are eligible under the Specific coverage provided: 1) Claim payments plus repricing fees exceed the Specific Deductible, or 2) HCC Life Insurance Company negotiated a discount which requires payment to a network. Aggregate Excess: PPO/Re-pricing fees (from an outside vendor not related to the TPA) structured as a % of savings (25% maximum) are eligible under the Aggregate coverage provided: 1) HCC Life Insurance Company has documentation that these fees were included in the previous claims experience at the time of initial Underwriting and 2) The Underwriter acknowledged inclusion of this coverage in the Policyholder s Application/Schedule of Insurance. Capitated Rate PPO fees billed at a flat rate per employee per month (capitated) are not eligible under the Specific or Aggregate coverage. 2. Large Case Management (LCM) Fees Similar to TPA fees assessed for cost containment efforts, those associated with large case management (LCM) that are considered operational/administrative functions are not reimbursable under the stop loss contract. This would include the cost for sending s, faxes, eligibility determination, clerical fees, or capitated fees that are charged to the group as per member, per month fees. Large case management, as we understand it, is directly associated HCC Life Insurance Company 17

18 with the management of an ongoing catastrophic claim. Proper management results in savings and the cost of that management is reimbursable under the medical stop loss policy provided the claim payments in addition to the LCM fees exceed the Specific Deductible and those fees are incurred and paid in accordance to the particular policy s contract basis. or Large Case Management fees are considered under the Specific coverage provided: Claim payments plus LCM fees exceed the Specific Deductible and case management is warranted HCC Life Insurance Company requested LCM implementation. Large Case Management fees (not previously paid as outlined in number 1 & 2 above, are payable under the Aggregate coverage. If the TPA opens a case to LCM and the Policyholder s Specific Deductible is eventually exceeded, those fees will be reimbursed above the Specific Deductible as part of the overall claims needed to be reimbursed. [Note: If HCC Life Insurance Company pays LCM fees, copies of the LCM reports must be submitted.] Some fees/expenses associated with case management are not reimbursable and include: Clerical fees Capitated Case Management services such as per member per month fees Internal claim services such as eligibility verification, benefit review and coordination of benefits inquiry. Fees to send s and faxes. 3. Drug Card Administrative Fees Administrative fees for Drug Card programs (similar to PCS) are not eligible for reimbursement under the Specific or Aggregate coverage. 4. State Surcharges Certain states levy surcharges on in-patient and outpatient hospital bills for uncompensated care pools, training, etc. HCC Life Insurance Company will allow certain state surcharges (i.e. NY) where the courts have ruled that ERISA does not prevent the imposition of the state surcharge. Please consult your HCC Life Insurance Company Claims Specialist for more updated information. D. Legal Matters/Complaints HCC Life Insurance Company should be advised immediately by phone of any legal matter in which one of our Carriers and/or HCC Life Insurance Company is named. The summons and complaint, along with the complete file and any supplemental documentation, should be forwarded to the Kennesaw, GA office. HCC Life Insurance Company should be advised immediately of any lawsuit in which the Carrier or HCC Life Insurance Company is not named, but could become involved because of Specific or HCC Life Insurance Company 18

19 Aggregate Excess Loss coverage. The complete file and any supplemental documentation should be forwarded to us for review. HCC Life Insurance Company must be advised of all Insurance Department Complaints in which our coverage is involved. The original complaint and complete claim file should be forwarded to us for our immediate review. Please fax complaints to our Compliance Department at (770) E. Subrogation/Third Party Liability Subrogation/Third Party Liability involves situations where a claimant incurs medical expenses that have been caused by a negligent third party. It provides the Plan and the Policyholder with an opportunity to shift the costs of the claimant s medical care onto the responsible party (their insurance company or other responsible entity). 1. Preparing claim documentation In order for us to review and issue reimbursement on cases involving subrogation/third party liability, we must first have the following documentation: b. Liability Questionnaire (or the TPA s form that contains the same data) completed by either the TPA or the Employer Group (Policyholder) and should include any appropriate attachments. A copy of this form may be found in the Section VII of this guide. c. Subrogation and Right of Recovery Reimbursement Agreement should be signed by the Employer Group (Policyholder.) [A copy of this form may be found in the Forms section of this guide.] 2. Identifying Potential Subrogation Claims Identification of potential subrogation claims is vital to making monetary recoveries that shift the cost of the medical care to the responsible third party. Below are examples of potentially subrogatable third party claims. Trauma Cases Prior to payment of the claims the TPA should send out our Liability Questionnaire (or their own form that requests the same information) to acquire exact details regarding the incident. Claims should not be paid until the questionnaire and applicable attachments have been completed and returned. It can be advantageous to use an attorney/firm that specializes in the area of subrogation to review the information and if necessary to handle the subrogation related issues in the file. Potential Medical Malpractice Claims Medical malpractice claims are sometimes difficult to identify. As such, listed below are some indicators of potential medical malpractice. 1. Medical billings which are inconsistent with the initial diagnosis HCC Life Insurance Company 19

20 2. Treatment for infections after surgery 3. Second surgical procedures within 24 hours of initial surgical procedures 4. Any complication relative to the delivery of a child 5. Any readmission to the hospital within two weeks of a surgical procedure 6. Any hospital stay that is more than five days beyond the usual and customary stay for the condition for which the individual was originally admitted 7. Any course of treatment where the total charges exceed the reasonably expected charges by more than 15% 8. Any surgery where a repair of an organ not related to the initial surgery is involved (nicks/lacerations of bladders, liver, colon, etc.) 9. Any cases involving infection such as sepsis 10. Any disease that could have resulted from a blood transfusion 11. Presence of billings for multiple surgeons when such bills are not indicated given the original procedure 12. Unusually large medication charges In cases of potential medical malpractice, please order the patient s medical records (records and charts including the nursing notes and operating room notes) in addition to obtaining the Liability Questionnaire. Many times the Claimant may be unaware that malpractice has occurred. As such, it may be up to the Plan or the Carrier to investigate the malpractice case. Please review the list below in the event that you identify a potential case. a. Slip and Fall Cases: This category of cases is typically the least likely to result in a substantial subrogation recovery. Trauma claims may be involved, therefore, these cases should be treated the same as any other trauma cases. Liability is often strongly contested by the property owner. The Plan, and/or the Carrier should be prepared to negotiate the subrogation lien in these cases b. Poisoning Cases: This category of cases can encompass everything from food poisoning at a restaurant to chemical ingestion. An admission to the emergency room is generally involved. The TPA should flag ICD-9 and CPT codes that reflect food poisoning issues as well as claims for pumping the stomach, usage of antitoxins, charcoal and claims for anaphylactic shock. c. Dog Bites: This category of claims involves trauma and these cases often make good candidates for subrogation, especially where the victim is a child. It is important to remember in cases involving young children (under 9 years of age); it is typically believed that they are not capable of being negligent. If they are not capable of being negligent then they cannot be responsible under the doctrine of contributory negligence. Therefore, if any other party involved in the injury is negligent in any fashion, and there is a source for recovery, a recovery should occur. d. Sports Activities: Each sports injury should be reviewed not only on the basis of the sponsor of the event but also in terms of the equipment used, supervision issues, and individuals involved. HCC Life Insurance Company 20

21 e. Injuries Involving Children: In addition to dog bites, there are several types of injuries involving children where an argument might be made that the child was potentially at fault. It is important to note that young children (under 9 years old) are generally not capable of negligence. Examples of this are: children darting out in front of another motorist; children playing with dangerous instruments like fire or firearms; children falling into pools and ponds or other bodies of water. These cases are often successful subrogation cases. Again the procedures relative to trauma will apply. This is only a partial list of cases that could involve subrogation; however, the general principles of Notification, Negotiation and Resolution/Settlement still apply. We are committed in assisting in these areas and in subrogation cases where the Carrier has made reimbursement and expect to take the lead in the process. F. Hospital Audits Traditionally, independent, onsite bill audits were reserved for cases needing review for medical necessity, malpractice or excessive and questionable charges and/or procedures. HCC Life Insurance Company utilized these traditional independent audit firms who conducted these audits per the N.A.I.C. National Audit Guidelines. Audits focused on validation and authentication of procedures and charges in addition to locating duplicate charges. On site audits provided an opportunity for collaboration from a facility representative, resulting in signed agreements to adjustments. Eventually, hospitals became more sophisticated in this area and improved their accuracy in these areas, resulting in suspension of hospital auditing on most large bills. Very recently, there has been a resurgence of the hospital audit within the cost containment arena in part as a result of hospital over billing, particularly in the area of pharmacy charges. Accordingly, guidelines involving hospital audits have been revised. When charges are believed to be excessive, the results of a hospital audit can be utilized as a benchmark for provider negotiation. If an audit is requested, a provider agreement outlining the adjusted charges must be obtained. The agreement should also establish a definitive timeframe for payment and include an agreement not balance bill the patient. Reimbursement of audit fees is limited to 25% of savings. G. Medical Records Medical records are not usually required as a part of your claim submission. However, we reserve the right to request this documentation, as it is often invaluable in providing key information such as: diagnosis, accident details, and the nature of the treatment rendered. TPAs should request medical records (hospital admission and discharge summaries) in the following instances: 1. Claims that may involve possible pre-existing conditions 2. Claims involving automobile or other accidents. This will help clarify if Alcohol and/or illegal drugs were involved A crime or felony was committed A third party was at fault (possible subrogation) 3. Claims involving alcohol treatment. This will help clarify if Treatment was also for drug abuse HCC Life Insurance Company 21

22 4. Claims involving mental and nervous conditions. This will help clarify if Treatment was also rendered for alcohol and/or drug abuse in addition to a mental and nervous condition such as depression. There was a suicide attempt 5. Claims involving experimental or investigational treatment H. Contract Terms Eligible Specific and Aggregate claims are reimbursed based on the Policyholder s Incurred and Paid date parameters (contract terms). It is extremely important that employers understand these terms and how they impact their overall Stop loss Policy. 12/12 Incurred in the contract period Paid in the contract period 15/12 Incurred in the contract period or within three months prior to the contract period and paid in the contract period. 12/15 Incurred in the contract period Paid in the contract period or within three months thereafter 12/18 Incurred in the contract period Paid in the contract period or within six months thereafter 12/24 Incurred in the contract period Paid in the contract period or within twelve months thereafter Paid Any eligible charges Paid in the contract period HCC Life Insurance Company 22

23 I. Funding & Timely Payment of Claims Reimbursement of any Stop loss claim (Specific or Aggregate) depends not only on when eligible charges are incurred, but also when they are paid. The incurred and paid dates represent the essence of Excess coverage. Therefore, it is critical everyone understands precisely what paid means. Since HCC Life Insurance Company manages Stop loss claim activity for two Carriers, the Policyholder s Carrier contract should be consulted for the exact paid definition. However, all Carriers agree the printing of and subsequently holding a check does not constitute payment of or a paid claim. Because the rules are slightly different for Simultaneous Funding requests, please review Section III.3, Part E if a Simultaneous Funding request is being made for all or part of the reimbursement claim. J. Split Funded Premium Claims This funding arrangement provides the policyholder an opportunity to reduce Specific (or Individual) excess reimbursement premium costs without taking on any additional risk. This arrangement allows the policyholder to receive immediate benefit in the form of reduced Specific premiums, if their Specific claims experience is favorable. At the same time, the cost for Specific coverage is guaranteed not to exceed the standard premium that would have been paid in the absence of the split-funded arrangement. Historically, policyholders with continuously favorable Specific claim experience have had difficulty accepting sizable annual rate increases due to Specific trend leveraging when they know that claim reimbursements have been significantly less than premiums paid. This creative funding alternative allows a policyholder with good experience to risk share while not exposing the plan to additional catastrophic claims liability. The split-funded arrangement also appeals to policyholders who have never had Specific Excess Loss coverage, realize the need, but want to avoid the substantial fixed costs relating to standard premium rates. Under this agreement, the policyholder would select the Specific Deductible, the appropriate contract basis and the desired reimbursement maximum. Based on these elements, the demographics of the group, the location of the employer and the benefit plan design, standard premium rate(s) would be developed. Depending on the deductible size and/or the annual standard premium, discounted payable monthly premium rates would be established. These rates would reflect a 5% to 35% discount from the standard premium rates. The difference between the standard premium and the discounted payable annual premium represents the policyholder s Split Funded Liability. All claims in excess of the Specific Deductible must be submitted to HCC Life Insurance Company for audit. Reimbursement would only be made to the policyholder when total reimbursable Specific claims exceed the specific deductible and the policyholder s Split Funded Liability. A year-end final settlement may be applicable based on the Split Funded Liability Endorsement as outlined in your policy. HCC Life Insurance Company 23

24 K. Overpayments & Refunds All refunds should be forwarded to our office if the overpayment pertains to a specific or aggregate claim payment. Please be aware that often, refunds are not received until after a Policyholder s policy year has expired. Even so, if the overpayments apply to the incurred and paid dates of the specific and/or aggregate coverage, these refund checks rightfully belong to the Stop loss Carrier and should be sent to HCC Life Insurance Company. L. Dental, Vision, Weekly Income & Drug Card Charges Stop loss contracts are written to suit the individual needs of each Employer Group (Policyholder). Therefore, not all contracts include the same types of coverage. In order to know exactly which coverage options the Policyholder has elected, please review the Policyholder s Application for complete detail. Specific Coverage: Eligible Medical expenses are covered Prescription Drug Card expenses (excluding administration fees) are covered only if the Policyholder elected this option and it is listed in their signed Application. Dental, Vision, and Weekly Income are not covered Aggregate Coverage: Eligible Medical expenses are covered Prescription Drug Card expenses (excluding administration fees), Dental, Vision, and Weekly Income are covered only if the Policyholder elected this option and it is listed in their signed Application. M. Disclosure Our underwriters evaluate a risk based on the underwriting and claim information provided them by the Policyholder and TPA at the time of underwriting. Individuals who are at risk for high dollar claims because of certain diagnoses (refer to Trigger Diagnosis List), claimants who have reached or have the potential to reach 50% of the Specific Stop Loss Deductible and participants who are disabled (employees, dependents and/or COBRA participants) should all be disclosed. Both the Employer Group (Policyholder) and the TPA should understand the important role Disclosure plays in the issuance of the Stop loss policy. The HCC Life Insurance Company Disclosure Statement must be filled out completely and accurately on New Business, as incomplete disclosure could result in a case being re-underwritten or possibly rescinded. The employer should not cancel Carrier coverage until the disclosure form has been reviewed and approved by HCC Life Insurance Company. While HCC Life Insurance Company does not require the HCC Life Insurance Company Disclosure Statement Form on renewal cases, the required disclosure information for the review process is the same. HCC Life Insurance Company 24