Early Start Program Working with Health Plans A Guide for Early Start Providers

Transcription

1 Early Start Program Working with Health Plans A Guide for Early Start Providers

2 REGIONAL CENTER OF THE EAST BAY Main Office Creekside Plaza Concord Office 500 Davis Street, Suite 100 Salvio Pacheco Square San Leandro, CA Salvio Street, Suite or (main) (main) (Early Intervention Referral Line) This Provider Guide is made possible by a grant from First 5 of Alameda County. Compiled and written by Janie Tyre, Health Policy and Communications Consultant, in consultation with the staff of the RCEB Infant and Young Children Services Department, May 2011 Working with Health Plans: A Guide for Early Start Providers

3 WORKING WITH HEALTH PLANS: A GUIDE FOR EARLY START PROVIDERS TABLE OF CONTENTS 1 Health Insurance Fundamentals... 1 Insurance Companies and Products... 1 Health Insurance Regulation... 2 Provider Reimbursement Provider Networks... 3 HMO Health Maintenance Organization... 3 Medical Groups... 3 Kaiser... 3 PPO Preferred Provider Organization... 3 POS Point of Service Plans... 4 Therapist Provider Networks Benefits and Coverage... 5 Occupational, Physical, and Speech/Language Therapy... 5 Services For Autism, ASD And Pervasive Developmental Disorder... 5 Evaluation... 5 Applied Behavioral Analysis (ABA)... 5 Mental Health Parity law and autism diagnosis... 5 Medi- Cal- Covered Services Obtaining Authorizations for Services... 7 Health Plan Criteria for Authorizing Services... 7 The Treatment Plan... 7 Health Plan Medical Policy... 8 Limits on the number of treatments Medi- Cal and Medical Necessity Standing Referrals Regulation Affecting Authorizations Denials and Appeals Denials Appeals Appealing to the Health Plan The Appeal Letter Appealing Beyond the Health Plan Independent Medical Review (IMR) State Hearing (aka State Fair Hearing) Self- Insured Plans Billing and Getting Paid Fee Schedules Medi- Cal fee Schedule Standardized Billing for Health Plans Member Financial Responsibility Billing and Payment Timing Rules Provider Appeals and Provider Dispute Resolution... 18

4 7 Member Rights Grievance Rights HIPAA Privacy Rule Language Assistance Program Interpreters Translation Medi- Cal Managed Care Contracting with Plans Contracting Process: Example from Alameda Alliance for health Contracting Tips Researching the health plan Be prepared to market yourself Look for contract provisions that make your life easier It might help to know Credentialing: Health Plan Rules and Standards Negotiating Rates on a Case- by- Case Basis Medi- Cal, CCS, CHDP, and Healthy Families Medi- Cal Enrollment in Alameda and Contra Costa counties Financing Eligibility Determination and Service Delivery Medi- Cal Managed Care Plans California Children s Services Program (CCS) Providers Eligibility and Covered Services CCS Medical Therapy Program Healthy Families Program* Child Health and Disability Prevention Program (CHDP) Health Plan Organization Plan Departments and Common Responsibilities Medical Department Provider Services Department Claims Department Member Services Department Policies and Procedures (P & Ps) Appendix 1: Resources Appeals/Medical Necessity Letters Billing and Reimbursement Appendix 2 Resources for Parents Appendix 3: Suggestions from EI Providers Appendix 4: Children s Insurance Status Working with Health Plans: A Guide for Early Start Providers 2

5 INTRODUCTION Changes made in 2009 to the California Early Intervention Services, the law that governs the Early Start program of the Regional Centers of California, affected how infants and toddlers with developmental delays or who are at risk for development delays receive care. The changes require parents to request medical services through their child s health plan. The Regional Center can provide for these services only if the child s health plan does not cover the services. The law applies to medical services that are part of the Early Start program. These services include: speech and language therapy, physical therapy, occupational therapy and applied behavioral analysis. This guide, written in response to these changes, is intended to assist and support Regional Center Early Intervention (EI) vendors in Working with Early Start program families to navigate the health insurance system to obtain needed services for their children, and Working with health plans to obtain authorizations and reimbursement for services provided to children in the Early Start program It is based in part on RCEB EI Provider Discussion Groups, Survey, and Interviews as well as interviews with health plans and focus groups with Early Start clients and staff, June 2010 through November Working with Health Plans: A Guide for Early Start Providers 3

6 1 HEALTH INSURANCE FUNDAMENTALS INSURANCE COMPANIES AND INSURANCE PRODUCTS Large insurance companies offer a multitude of health insurance products. For example, Anthem Blue Cross offers more than 40 different plans for employees of small groups that is employers with 2 to 50 employees. Anthem offers some similar but not identical products and others to large groups (employers with more than 50 employees), and yet a different set of plans to individuals and families. Self-insured businesses and organizations, including large companies, public entities and non-profits may offer self-designed plans or plans identical to those offered by health insurers to other employers. It is common for selfinsured plans to turn over the administration of their health plans to a Third Party Administrator (TPA). Often the employer will contract with a health plan to act as a TPA for all health care claims. The two broad classifications of health insurance products are: indemnity or fee-for-service plans and managed care plans. Indemnity plans are traditionally open-choice plans in terms of members provider selection, while the hallmark of managed care plans is a closed network. However, in response to client demand, managed care plans have been structuring options that offer members less restrictive networks. Managed care plans are designed to monitor and control costs and, at the same time achieve certain access, service and outcome goals. Over time, a number of managed care cost-containment strategies have been adopted by indemnity plans, blurring the line between indemnity/fee-for-service and managed care. The most common managed care products are: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Point of Service plans (POS). Another product offering, Health Savings Accounts (HSA) (also called Consumer Directed Plan) are usually combined with a PPO or indemnity plan that has a high deductible. An HSA is a tax-free savings account into which the covered employee or the employer deposits tax-free funds. The member then uses these funds to pay for health care services. Once the plan deductible is met, the plan begins to pay. Medi-Cal, California s Medicaid program for lower income people, also has two broad classifications of service delivery and financing: Medi-Cal Managed Care Plans--which are HMOs and Medi-Cal fee-for-service, which operates much like a private indemnity plan. In addition to qualifying for health insurance coverage, children in the Early Start program may be eligible for services from other health programs: notably, California Children s Services and EPSDT/CHDP. Working with Health Plans: A Guide for Early Start Providers 1 1

7 HEALTH INSURANCE REGULATION Which state or federal agency oversees a health plan depends on the type of plan. This is important to know because this is the agency you or your patient may contact if you have a complaint about the plan. Regulatory Agency DMHC --California Department of Managed Health Care CDI -- California Department of Insurance, also referred to as DOI DOL-EBSA -- U.S. Department of Labor, Employee Benefits Security Administration. Most self-insured health plans are governed by ERISA, a federal law that is overseen by the DOL-EBSA. Members contact the DOL-EBSA for help. No Agency -- Self-insured plans not under ERISA.. Members must file a complaint with the employer or plan directly or go through a court of law. Type of Plan HMO, Blue Shield PPO, and Anthem/Blue Cross PPO, Medi- Cal Managed Care plan PPO (other than Blue Shield or Anthem/Blue Cross) and all Indemnity plans. Self-insured health plan governed by the Employee Retirement Income Security Act (ERISA): health plan is through an employer or a union. Self-insured plans not under ERISA: these can be self-insured health plan through a school district, local government, or religious organization PROVIDER REIMBURSEMENT Capitation is a payment method often used by HMOs; under capitation the provider is paid a per-member-per month fee to provide all services for which the provider is contracted. Most medical groups, and many primary care physicians are capitated under their HMO contracts. Capitated rates are derived from the amount that the insurer s actuarial analysis determines is the cost of services. Primary care providers are expected to coordinate care, as well as provide services, for their capitated members. It is possible but not common for a therapy provider to be capitated. It is usually impractical because the average amount of capitation would be extremely low. The therapist would need to be assigned a large number of members to make this method work. Provider payment for therapists is usually based on a fee schedule. If the patient has co-payments (a per-visit fee) or coinsurance (a payment equal to a percentage of the total fee), the health plan deducts that amount from the provider payment. See Billing and Getting Paid below for more information on fee schedules. In addition, if the patient s plan includes a deductible, the plan pays nothing until the deductible is met. As discussed in the next section, health plans use significant financial incentives to prevent members from utilizing services out-of-network. The range of incentive runs from paying nothing for non-participating providers to having the member pay a percentage of the fee schedule, plus any charges over the fee schedule amount. Working with Health Plans: A Guide for Early Start Providers 2 2

8 2 PROVIDER NETWORKS *Definitions and rules vary by plan; descriptions are general rules only. HMO HEALTH MAINTENANCE ORGANIZATION The defining characteristic of an HMO is a closed network. Members must receive all care from network providers except in emergencies or for preapproved services that cannot be provided in-network. Many health plans are loosening their network rules in response to consumer demand. For example, in some HMO products, the member may not be required to choose a PCP, or may not need a PCP referral to see a specialist. However, the member is still required to use only network providers. MEDICAL GROUPS Most of the large HMOs in Alameda and Contra Costa counties contract with medical groups, for example: Palo Alto Medical Foundation, Hill Physicians, Community Health Center Network. When the member chooses a PCP, the member is also choosing the medical group and all other providers, The Medical Group is usually capitated for most professional services, so it is the Medical Group not the HMO that is responsible for covering the cost of those services and thus for authorizing the services. KAISER Kaiser is an integrated health system comprised of Kaiser Permanente Medical Group, Kaiser Foundation Health Plan and Kaiser Hospitals. KPMG clinicians at Kaiser facilities provide almost all care for Kaiser members. However, if Kaiser does not have an appropriate provider, they will contract out for services. Kaiser strongly prefers to keep services within the Kaiser system, and if using outside providers is necessary, Kaiser prefers to contract with just a few providers. That way they can retain control over quality and cost, and the contracted providers will receive a significant number of referrals. PPO PREFERRED PROVIDER ORGANIZATION PPOs are also based on provider networks. Contracted providers are paid based on a fee schedule. PPO members may go to any provider in the PPO network. There is no requirement to select a Primary Care Provider. If a member chooses to go to an out-of-network provider, the member will usually be required to pay the full amount at least until the deductible is met. Members usually pay a yearly deductible before the PPO starts to pay some or all of the bills. Once the deductible is met the member pays a co-insurance or co-pay when receiving covered service. The PPO pays the rest. Co-insurance percentages, co-pays and deductibles vary depending on the specific plan Working with Health Plans: A Guide for Early Start Providers 3 3

9 In a PPO, the cost to the member for out of-network services is considerably greater than the cost of in-network services. For example in one Anthem Blue Cross plan for small employers, the deductible for the family is $4800 innetwork and $5500 out-of-network. After the deductible is met, the member pays 20% of Anthem negotiated fees in-network, and 50% of the negotiated fee plus 100% of excess charges if receiving services from a non-network provider. In other PPOs, the member is financially responsible for the total cost of out of-network services. Some PPO plans provide a limited amount of first dollar coverage; for example, the plan may pay for the first $750 of services (often preventive care) before the member starts to pay the deductible. POS POINT OF SERVICE PLANS In a POS plan, members have a choice at the point of service of using the HMO network or not. Members choose a PCP and get most services from HMO network providers. When a member opts to see non-hmo network provider, the cost is higher; often the member is required to pay the full cost of care until the deductible is met. Once the deductible is met, the member pays a coinsurance for the non-hmo provider. Some POS plans have three tiers of providers: the HMO network costs the member the least, providers in the PPO network more, and out-of-network providers have the highest cost. Most plans require the member to go through the primary care physician before seeing an out-of-network specialist. If the member self-refers to an out-of-network doctor, the POS plan pays less or may pay nothing. THERAPIST PROVIDER NETWORKS Preferred Therapy Providers, and PTPN are examples of provider networks for therapists. Instead of contracting directly with individual therapists, the health plans contract with the provider network. The provider network is then responsible for selecting and credentialing the providers. The number of providers selected may be limited based on the number of health plan members in a certain area. Providers generally pay an annual fee, and agree to accept the network fee schedule. The provider is responsible for billing and providing certain information to the network. The advantage to the provider is access to members of many health plans. To be part of a health plan network or to be paid by Medi-Cal fee-for-service, a provider must apply and be credentialed. See Contracting with Health Plans below. Working with Health Plans: A Guide for Early Start Providers 4 4

10 3 BENEFITS AND COVERAGE OCCUPATIONAL, PHYSICAL, AND SPEECH/LANGUAGE THERAPY In California, HMOs and PPOs regulated by the Department of Managed Health Care (DMHC) are required to cover basic health care services. The definition of basic health services includes speech therapy (ST), occupational therapy (OT), and physical therapy (PT). Even though not required, more than 80% of the PPOs and indemnity plans regulated by the California Department of Insurance (CDI) cover ST, OT and PT. Self-insured plans are not subject to these rules but most cover ST, OT and PT. A few plans specify that PT, OT and ST are covered for developmental delays, and a few specifically exclude services for developmental delay. For example, one health insurer notes in its coverage policy for speech therapy that their plans may have: Specific coverage exclusions for rehabilitative services for learning disabilities, developmental delays, autism, mental retardation and/or for treatments which are not restorative in nature (CIGNA 2010). However, these policies seem to be changing in California; as another insurer noted, DMHC has begun to prohibit plans from excluding services based solely on the fact that they are non-restorative in nature, and require health plans to base coverage decisions on whether the services are medically necessary. SERVICES FOR AUTISM, AUTISM SPECTRUM DISORDER AND PERVASIVE DEVELOPMENTAL DISORDER Evaluation Health plans are required to cover evaluation for autism if indicated. In a managed care plan, the child s doctor will make the referral for evaluation. Applied Behavioral Analysis (ABA) Currently, ABA and other intensive behavioral therapies are usually not covered by health plans. Health plans take the position that ABA is not medically necessary for many children with autism or pervasive developmental disorder. Also, health plans do not pay for services provided by unlicensed individuals. Lastly, health plans often regard ABA as an educational not a medical service. There are some health plans that may cover ABA: TRICARE (for active military), a few selfinsured plans, and others. Some parents have been successful in appealing a health plan denial for ABA services. (See Section 4 and Section 5.) Mental Health Parity law and autism diagnosis In 2000, California passed Assembly Bill 88, the Mental Health Parity law. AB 88 requires private health plans to provide the same level of benefits for severe mental illness as for other medical conditions. Working with Health Plans: A Guide for Early Start Providers 5 5

11 These severe mental health conditions are listed in the law and include: autistic disorder, Rett s disorder, childhood disintegrative disorder, Asperger s disorder, and pervasive developmental disorder, not otherwise specified. Equal benefits encompass visit limits, deductibles, copayments, and lifetime and annual limits. The mental health parity law applies to plans regulated by the DMHC and by the CDI. [Health and Safety Code Section (d)(1)-(9) and Insurance Code Section (d)(1)-(9)]. It states: (a) Every health care service plan contract issued, amended, or renewed on or after July 1, 2000, that provides hospital, medical, or surgical coverage shall provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and of serious emotional disturbances of a child, as specified in subdivisions (d) and (e), under the same terms and conditions applied to other medical conditions, as specified in subdivision (c). (b) These benefits shall include the following: (1) Outpatient services (2) Inpatient hospital services (3) Partial hospital services Plans are not required to provide otherwise-covered services if the services are determined not medically necessary. Plans do also deny ABA services on the basis that the ABA provider is unlicensed. In regard to providers, the mental health parity law states: (b) A plan shall provide coverage for the diagnosis and medically necessary treatment of conditions set forth in Health and Safety Code section through health care providers within the meaning of Health and Safety Code section 1345(i) who are: (1) acting within the scope of their licensure, and (2) acting within their scope of competence, established by education, training and experience, to diagnose, and treat conditions set forth in Health and Safety Code section Parents have been successful in obtaining health approval for mental health services, PT, OT and ST for their autistic children. Having strong support from the primary care provider as well as specialists and therapists is key to this success. Often it is necessary to go through the appeal process with the plan s regulatory agency. Some plans offer care managers to help families with autistic children to navigate the health plan s system, help coordinate services and act as a liaison between the family and the plan. Members may inquire about a care manager through the plan s Member Services Department. MEDI-CAL-COVERED SERVICES Medi-Cal benefit rules state that ST, PT, OT and ABA are covered services when ordered by a Medi-Cal provider. If the child has fee-for-service or regular Medi-Cal, the provider must submit a Treatment Authorization Request (TAR) to Medi-Cal. (See also Section 4: Medi-Cal and Medical Necessity. ) Working with Health Plans: A Guide for Early Start Providers 6 6

12 4 OBTAINING AUTHORIZATIONS FOR SERVICES Once a child has been evaluated through the health plan process, the primary care provider (PCP) is usually responsible for obtaining health plan authorization for needed services and for coordinating care. Often the evaluation itself will include other physician specialists and one or more therapists. Some health plans allow the PCP to refer the child directly to an in-network provider to begin treatments without further approvals. However, if the evaluation and diagnoses call for treatment on a long-term basis, (long term may be defined as anything over a few visits), most health plans will require that the ongoing services are pre-authorized. (See Treatment Plan below.) Pre-authorization may be done through the health plan, or, in the case of most HMOs, through the medical group. HEALTH PLAN CRITERIA FOR AUTHORIZING SERVICES Are the services medically necessary? The health plan pays for treatments, and equipment and supplies when they are covered benefits and are medically necessary. Health plans may differ in how they define and interpret medical necessity. Generally, medical necessity means that the plan s medical directors agree that a treatment is needed and expected to be effective. To be medically necessary means: The treatment is expected to cause significant improvement within a specified timeframe. The improvement would not happen without the treatment. In deciding whether the requested services are medically necessary, the health plan will look at: The unique clinical history and condition of the child, The proposed treatments and treatment plan, Any relevant laws or regulations, and Scientific studies, evidence and expert recommendations, including recommendations of any federal agencies, such as the National Institutes of Health, and any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services. THE TREATMENT PLAN Before most health plans will approve services that are expected to continue over a longer period of time, the plan will require that providers submit a treatment plan. The treatment plan must include: Working with Health Plans: A Guide for Early Start Providers 7 7

13 The exact behavior or function that is targeted The types of services that will be provided How often the service will be provided, and for how long The treatment goals: these should be specific and tied to dates. How will the child s progress be measured? How will you know if the treatment is working? The health plan will review the child s progress to see if treatment goals are being met. The health plan may decide to stop paying for a treatment (and/or suggest a change in treatment) if goals have been met or if there is not sufficient progress toward the goals. It is critical that the provider(s) and the health plan or medical group have a shared understanding of the elements of the treatment plan, and of how progress will be monitored and measured. HEALTH PLAN MEDICAL POLICY The larger national health insurers have posted clinical criteria for coverage (coverage policies) on their websites. These documents provide detailed information, from the medical directors point of view, about how medical necessity is determined, including which diagnoses are covered and what documentation is required. For some insurers, access to the information requires a login and is limited to contracted providers. The determination of coverage ultimately depends on the specific plan product under which the member is insured. The following excerpts from plan medical policy documents are examples of how health plans might approach the determination of coverage. (1) Description of medical necessity from CIGNA s 15-page document on Medical Coverage Policy for Speech/Language Therapy (2010): CIGNA covers as medically necessary EITHER of the following: a prescribed course of speech therapy by an appropriate healthcare provider for the treatment of a severe impairment of speech/language and an evaluation has been completed by a certified speech/language pathologist that includes age-appropriate standardized tests that measure the extent of the impairment, performance deviation, and language and pragmatic skills assessment levels. a prescribed course of voice therapy by an appropriate healthcare provider for a significant voice disorder that is the result of anatomic abnormality, neurological condition, or injury (e.g., vocal nodules or polyps, vocal cord paresis or paralysis, post-operative vocal cord surgery). When ALL of the following criteria are met: The treatment being recommended has the support of the treating physician. Working with Health Plans: A Guide for Early Start Providers 8 8

14 The therapy being ordered requires the one-to-one intervention and supervision of a speech-language pathologist. The therapy plan includes specific tests and measures that will be used to document significant progress every two weeks. Meaningful improvement is expected from the therapy. The treatment includes a transition from one-to-one supervision to an individual or caregiver provided maintenance program upon discharge. (2) Blue Shield of California, requirements for eligibility verification, right of the plan to review the claim and deny payment for any excluded services, and clinical documentation necessary for prior authorization. Also note the specific requirement for a diagnosed medical condition. (Source: Blue Shield Medical Policy, Speech Therapy, Effective January 2010): Prior Authorization Requirements Clinical Evidence is required to determine medical necessity. Within five days before the actual date of service, the Provider MUST confirm with Blue Shield that the member's health plan coverage is still in effect. Blue Shield reserves the right to revoke an authorization prior to services being rendered based on cancellation of the member's eligibility. Final determination of benefits will be made after review of the claim for limitations or exclusions. Documentation Required for Clinical Review Initial authorization of speech therapy requires: Physician prescription for speech services which includes a diagnosed medical condition for which services are being requested Standardized Test assessment ranking Treatment plan with the following: Frequency and duration of treatment plan (e.g. 2 times per week x 6 months) Functional, measurable, objective, and time bound longterm and short-term goals, based on evaluation and current baseline functioning Specific treatment techniques and/or activities to be used in treatment sessions Authorization for continuation of speech therapy requires: Progress report after six months of therapy demonstrating progress made towards established goals; or Standardized test reassessment rank after one year of therapy, and progress made towards established goals; and New or revised treatment plan Daily progress notes for the last three months of therapy Working with Health Plans: A Guide for Early Start Providers 9 9

15 LIMITS ON THE NUMBER OF TREATMENTS If a service is medically necessary, an HMO health plan cannot place arbitrary restrictions on the number of sessions that will be covered. This means that the number of services authorized must be based solely on medical necessity. MEDI-CAL AND MEDICAL NECESSITY Medi-Cal s definition of medical necessity is the Medicaid federal definition: it is very broad. For children, it includes all services needed to correct or ameliorate defects, physical and mental illnesses and conditions discovered by the screening services, whether or not such services were covered under the Medicaid State Plan. This means that Medi-Cal is intended to cover medical services, such as physical, occupational and speech therapy that a covered child needs. STANDING REFERRALS Patients should not always have to get approval or a referral for every visit. Health plans must have a "standing referral procedure." A standing referral allows the member to get "continuing care from a specialist or specialty care center" without a referral or approval from the health plan or from the child s PCP for each appointment. A standing referral may not necessarily apply to an individual therapist. The criteria for a specialty center include accreditation or designation by a federal or state agency or recognition by a voluntary national health organization. Specialist is usually interpreted to mean physician specialist. This rule applies to members with "life-threatening, degenerative or disabling" medical conditions that require "specialized medical care over a long time. The plan may limit the number of visits allow without re-authorization and the period of time for which the visits are authorized, and may also require regular reports from the specialist. REGULATION AFFECTING AUTHORIZATIONS For which providers will the health plan pay? A plan must meet its members needs by having an adequate network. If a member needs a particular type of specialist and the plan does not have this type of provider in its network, the plan must help to find one and pay for medically necessary care. How long should members wait for an appointment? On January 17, 2011, the California DMHC established standards regarding the time a patient has to wait to see a plan provider. For example, health plans must ensure that there are enough providers in the network so that members can get an appointment for non-urgent specialty care within 15 Working with Health Plans: A Guide for Early Start Providers 10 10

16 days and appointments for non-urgent primary care or mental health care within 10 days. (California Code of Regulations, Title 28, Section ) How far should members have to go to see a provider? All plans must have primary care providers and mental health professionals (if the plan covers mental health services) within 30 minutes or 15 miles, and specialists within 60 minutes or 30 miles, of where a member lives or works. (California Code of Regulations, Title 10, (c). and Title H (i)) Medi-Cal fee-for-service vs Medi-Cal managed care plans A child who is covered by Medi-Cal may have difficulty finding a provider that accepts Medi-Cal payment rates. The providers who do accept Medi-Cal rates are often booked months in advance. However, if the child belongs to a Medi- Cal managed care plan, parents may call the plan s Member Services department for help in obtaining a timely appointment. Medi-Cal plans are regulated by DMHC and are required to provide non-urgent services within the time limits described above. Will the health plan pay for services at home? Most health plans will not approve services delivered to a child in the home. Reasons are often based on cost. Health plans are required to provide services in the home only if it is not possible or not safe for the member to leave home. The section of the law [Health and Safety Code ) that requires plans to provide home care services is very specific and its intent is to cover home care so as to avoid or substitute for inpatient care. How long does the health plan have to make a decision? Generally, health plans are required to respond to requests for services within five business days. A decision to approve, deny, delay or modify the doctor s request must be communicated to providers within 24 hours of the decision (by fax or ) and to the member within two days (in writing). However, the plan may ask for additional information and thus start the clock again. If a child is already receiving approved care, and the health plan decides to deny continuation, the care to the child cannot be stopped until the treating provider agrees to an appropriate care plan. (See California Health & Safety Code and Insurance Code ) Note: this rule is usually applied to inpatient care, but the law includes outpatient care, including mental health services. However, the care must be in progress and already approved. Working with Health Plans: A Guide for Early Start Providers 11 11

17 5 DENIALS AND APPEALS DENIALS A health plan may deny, delay or modify a request for a service, or refuse to pay a provider s bill for services. A health plan may deny services for several reasons, including: The service is not covered in the member s specific health plan contract, including services by non-licensed providers, or by providers providing services outside the scope of practice for which they are licensed. The service was obtained from a non-network provider without prior authorization. The service is not medically necessary, meaning: It is considered experimental and/or unproven, There is no medical indication for the service, There is not enough clinical data to prove it is effective, or There is not enough clinical data to support the diagnosis. The person at the health plan who denies the request must be a health care provider who is knowledgeable about the specific clinical issues involved. The health plan or medical group will periodically assess the child s progress in the treatment plan. If a health plan decides that the treatments have not helped the child make significant progress, and the goals of the treatment plan are not being met, then the plan may deny additional treatments. If you and the member believe differently, you may appeal the decision (see below: Appeals ). The health plan will send a denial letter to the member and to the provider. The letter must give: A clear, concise explanation of the reasons for the decision, A description of the criteria or guidelines used, A reference to the member s EOC/Member Handbook, The clinical reasons for the decisions regarding medical necessity, and Instructions for how to file an appeal with the health plan, a state agency, or through the courts and what the appeal rules are. The letter from the plan to the doctor or treating therapist must include the name and the direct telephone number of the health care professional responsible for the denial, delay or modification. If the child has Medi-Cal fee-for-service (is not in a Medi-Cal managed care plan), Medi-Cal must send an approval or denial of the treatment authorization request (TAR). This is called a Notice of Action (NOA). If the TAR is denied, the NOA must explain: Working with Health Plans: A Guide for Early Start Providers 12 12

18 Which services or supplies are being denied, The regulation or law on which the denial is based, and How to file an appeal. If the child is already receiving services, Medi-Cal must give 10 days notice before it stops paying for those services. If the parents appeal this decision by requesting a state hearing with the California Department of Social Services (DSS), the child s service must be continued at least until the hearing. On the back of the NOA is a Request for Fair Hearing. (See Requesting a State Hearing below.) NOTE: If the parents request a State Hearing, they will be unable to later request an Independent Medical Review (IMR) through the DMHC or the CDI. However IMRs are available only to health plan members. (See Appealing Beyond the Health Plan below.) By going through the IMR process first, they can request a State Hearing if they are unhappy with the IMR decision. APPEALS To appeal a health plan decision, follow the directions and timelines on the denial letter. Appeal to the health plan first, and if the health plan s decision to deny, delay or change the service is unacceptable, the parents may appeal the decision to a regulatory agency. APPEALING TO THE HEALTH PLAN Health plans have a formal process for plan members and providers to disagree with a decision and ask that the decision be changed. For member appeals (or providers appealing on behalf of the member), this process may be called an appeal, reconsideration or grievance. Parents should be prepared for the likelihood that the process will take longer than expected and is often tedious and intimidating for the parent. The appeal process for providers relates to payment issues and is usually referred to as a Provider Appeal or Dispute Resolution Process. (See Billing and Getting Paid below.) Generally, the health plan is required to allow 90 days from the date on the denial letter for appeal to the health plan. Most health plans must offer more than one level of appeal. The health plan will send the second appeal to appropriate professionals who were not involved in the previous denial. The member may call the health plan s Member Services or Customer Services department or go through the plan s web site to start the process, and should follow up with a detailed written document. Working with Health Plans: A Guide for Early Start Providers 13 13

19 THE APPEAL LETTER If the health plan is denying services on the basis that the treatment or equipment is not a covered benefit, the appeal letter should refer to plan materials (Evidence of Coverage, Member Handbook, information from plan website, etc.). Show that the services are listed as covered benefits, or, at least, are not listed as excluded services. If the health plan says that the services are not covered, and you believe, by law, they should be, state that fact, and your reasons, in the letter. If the denial is due to lack of medical necessity, the appeal letter should describe the services the child needs and why. The most effective letters of medical necessity could include: Objective information about the child s medical history and current condition Documentation of medical need; how will service benefit the child; what will happen if the child does not receive the requested treatments References to current medical literature and practice that support the request (including the request for a specific type of provider), and How providing this service could avoid future medical expenses. See Appendix 1: Resources for writing a letter of appeal and documenting medical necessity. For virtually all parents, getting help and support from the child s providers is critical in pursuing an appeal. The child s Regional Center case manager can also help. The health plan must relay its decision within 30 days, or within three days if the request is urgent. Working with Health Plans: A Guide for Early Start Providers 14 14

20 APPEALING BEYOND THE HEALTH PLAN Which agency to contact depends on the type of health plan the child has. Health Plan Type HMO, Blue Cross PPO, Blue Shield PPO Other PPOs and Indemnity Plans Medi-Cal Managed Care Plan Regulatory Agency HMO Help Center (DMHC) California Department of Insurance (CDI) HMO Help Center (DMHC) Medi-Cal Managed Care Ombudsman What the Agency will do Help members with problems they have with plan. Process complaints. Provide forms & instructions. Help with and process IMR request. Process complaints. Provide forms & instructions. Process the IMR. Help members with problems they have with health plan. Help file a complaint. Provide forms & instructions. Help with an IMR request. * Help members with a problem with a Medi-Cal Managed Care plan Phone & Website (voice) (TDD) (voice) (TDD) (voice) (TDD) (voice) (TDD) Medi-Cal: regular or fee-forservice Medi-Cal mental health Self-Insured Plan California Department of Social Services California Department of Social Services, Department of Mental Health Ombudsman Employer, union or U.S. Department of Labor, Security Benefits Administration *Help and process a State Hearing request. (State Hearing Division, P.O. Box , MS19-37 Sacramento, CA 94244) Help and process a state hearing request. (State Hearing Division, P.O. Box , MS19-37, Sacramento, CA 94244) Help with Medi-Cal mental health care problems Information & help with self-insured health plans *If a family has Medi-Cal, it is often better to request an IMR before requesting a state hearing. Once the member is in the State Hearing process, an IMR is not an option (voice) (TDD) (voice) (TDD) (voice) (voice) Working with Health Plans: A Guide for Early Start Providers 15 15

21 INDEPENDENT MEDICAL REVIEW (IMR) Most appeals beyond the health plan will be requests to the DMHC or CDI for an Independent Medical Review (IMR). Members have 180 days from the date of the health plan denial to initiate this appeal. There is no cost to the member. An IMR is a review of the case by one or more health care professionals who are not health plan providers and who understand the child s condition and the recommended services. The child s case may qualify for an IMR, if the health plan: Denies, changes, or delays a service or treatment because the plan says it is not medically necessary, or Denies an experimental treatment for a serious condition, (If this happens, the member should apply for an IMR immediately, and is not required to file a complaint with the health plan first.), or Will not pay for emergency or urgent care that the child has already received. STATE HEARING (AKA STATE FAIR HEARING) If a child is covered by Medi-Cal, either through a health plan or directly from the state, the family may also appeal by filing a request for a state hearing. The family has 90 days from the date on the NOA or denial letter to request a state fair hearing. SELF-INSURED PLANS If the child is covered by a self-insured plan, appeals will not be handled by the state agencies. Parents should check their health plan materials, or contact their employer, union, or plan to find out how to appeal the health plan s denial. The U.S Department of Labor, Security Benefits Information may be able to provide information. Working with Health Plans: A Guide for Early Start Providers 16 16

22 6. BILLING AND GETTING PAID FEE SCHEDULES Insurance companies create and modify fee schedules based on usual and customary rates, practice costs geographically, level of complexity of service, and skill/training level of clinician. Private insurers often follow changes in Medicare fee structure, and are likely to use Medicare payments as a benchmark for determining fee levels. Fee schedules are proprietary, but the insurer is required to make fee schedules clear and available to providers before they sign a contract. Fees are based on units of services. Units can be time-based or servicebased. If service-based, often health plans will not pay for more than one unit per day. Speech and language therapy were previously billed in time units. Medicare and Medicaid have changed to service-based rates, and most private insurers now are doing the same unless you can negotiate differently. Use of the correct and most up-to-date diagnosis codes (ICD-9 or ICD-10) and procedure codes (CPT) are essential to getting paid. MEDI-CAL FEE SCHEDULE The Medi-Cal fee schedule is public information and is in the Medi-Cal Provider Manual at Individual services and codes may be looked up separately. This schedule is applicable to fee-for-service Medi-Cal. Medi-Cal health plans such as Alameda Alliance for Health and Contra Costa Health Plan may use this schedule as the basis for their plan fee structures and payment amounts. For non-physician services, including medical supplies, Medi-Cal requires the use of HCPCs rather than CPT codes. The Provider Manual states: The Healthcare Common Procedure Coding System (HCPCS) is a national, uniform coding structure developed by the Centers for Medicare & Medicaid Services (CMS) to standardize the coding systems used to process Medicare and Medicaid (Medi-Cal) claims on a national basis. The codes are available on the CMS web site. HCPCS is a three-level coding system that incorporates Physicians Current Procedural Terminology (CPT-4), National and Local codes. Medi-Cal implemented CPT-4 coding (Level I) for physician services in November HCPCS National Level II codes (formerly SMA codes; non-physician procedures and services) and HCPCS Local Level III codes (California-only) were implemented for services provided on or after October 1, Almost all Medi-Cal services may be billed electronically and require that the provider use a CMS 1500 form, the standard for the health insurance industry. Working with Health Plans: A Guide for Early Start Providers 17 17

23 STANDARDIZED BILLING FOR HEALTH PLANS Private insurers almost invariably require the use of the CMS 1500 form. A copy of the latest form and instructions on how to complete it can be found on the CMS web site: If you choose to have your patient bill the insurance company directly, you will need to supply a superbill or like information. (See Appendix 1: Resources, for a sample superbill.) MEMBER FINANCIAL RESPONSIBILITY Payment rates include the patient responsibility amount. For instance, if the payable fee is $100, and the member co-pay amount is $20, the insurer will pay $80. In-network providers are prohibited from balance billing HMO or PPO members: this means that providers may not bill members for the difference between the agreed-upon fee schedule and their usual and customary charges. As a network provider, you may bill a member only under certain circumstances: if you are providing services that the plan has said it would not cover when you requested a pre-authorization, and if the member has signed a written statement, prior to the service being provided, agreeing to pay for services; the plan may require the signed statement to include the fact that the plan determined the service was not covered and the reason given by the plan for not authorizing the services. In this case, the member cannot be held financially responsible for more than the agreed-upon fee schedule amount. Plan policy may also permit the provider to bill the member if the member is a no-show, and if the provider has advised the member in advance of this policy. In the case of a bill for a no-show, the amount billed by contracted providers may be restricted to no more than the contracted fee schedule amount. BILLING AND PAYMENT TIMING RULES Health plans must give contracted providers at least 90 days from date of service to bill the plan, and non-contracted providers at least 180 days. This time period may be extended if the provider gives good reason for the delay. The health plan must reimburse the provider within 30 days of receiving a clean and undisputed claim, or, if the plan is an HMO, 45 days. If the provider is not reimbursed within these timeframes, the plan must pay interest on the claim (15% per annum) (Health and Safety Code Section 1371). PROVIDER APPEALS AND PROVIDER DISPUTE RESOLUTION Appeals to Health Plans As of 2008, every health plan regulated by the DMHC or the CDI is required to offer a dispute resolution process for both contracting and non-contracting providers [CCR Title 28 Section ]. If a provider Working with Health Plans: A Guide for Early Start Providers 18 18

24 disputes the plan s payment amount, lack of payment, or experiences a lack of response from the plan, the provider has 365 days from the denial or lack of decision to submit an appeal, and plans must resolve the dispute within 45 days of receiving the appeal. If the provider has received an Explanation of Benefits (EOB), it will contain information about the plan s appeals process. In addition, every health plan is required to let providers know which telephone number to call for provider disputes, inquiries and filing information. See for a complete description of the required Provider Dispute Resolution process, including sample documents and forms. Appeals to a Regulatory Agency If the plan resolution is unsatisfactory, providers may appeal to the DMHC Provider Complaints Unit or the CDI. Each agency has its complaint form and telephone numbers online. Examples of the types of problems that you may submit to the agencies (source: CDI: Improper denial or delay in payment of a claim Other claims handling issues Dispute Resolution Mechanism difficulties Misconduct of the health insurer Both DMHC and CDI investigate and resolve individual provider complaints and identify, track and address any systemic issues, including potential unfair claims practices of health plans. Professional Resources for billing and other insurance issues: Speech and Language Therapists, and Audiologists: American Speech-Language Association web site ( or the California Speech Language Hearing Associate website ( Specifically for billing, coding, coverage, appeals, and other information, see Physical Therapists: American Physical Therapy Association at provides much of the same information and support as CSHA, but information is available on their web site for members only. APTA has a pediatrics section with an Early Intervention interest group. California chapter: Occupational Therapists: American Occupational Therapy Association at The California Occupational Therapy Association is at Working with Health Plans: A Guide for Early Start Providers 19 19