Coventry receives claims in two ways:

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1 Coventry receives claims in two ways: Paper Claims Providers send claims to the specific Coventry PO Box, which are keyed by our vendor and sent via an EDI file for upload into IDX. Electronic Claims - Providers submit claims electronically to Coventry instead of printing the claim on paper and mailing it. Electronic claims, called EDI claims, are sent to an electronic mailbox called a payor number. Claims Terms and Definitions: Accepted Claim a. a non-electronic claim on a HCFA 1500 form or Uniform Billing Form 92 (UB92), properly completed according to Medicare guidelines. b. an electronic claim in an 837 (ASC X12N 837) format or its successor adopted by the United States Department of Health and Human Services or its successor, in compliance with the provisions of the Health Insurance Portability and Accountability Act that includes all of the following: 1. Data that is required to the United States Department of Health and Human Services standards for electronic transactions. 2. Data that becomes required due to the situation according to the United States Department of Health and Human Services standards for electronic transactions. 3. Data that is required according to notice by the health insurance issuer or its agent to the health care provider or its agent. Such data shall be as described in the Payer's Companion Guide in accordance with the United States Department of Health and Human Services standards for electronic transactions. Claim - a request by a health care provider for payment from a health insurance issuer. Clean Claim - an accepted claim that has no defect or impropriety including any lack of required substantiating documentation or other particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this Part. Clearinghouse - A vendor that receives from providers or billing services electronic claims. The clearinghouse accepts the claims in a variety of formats and then reformats them to meet specific requirements. Correct claims address - the address appearing on an enrollee's or insured's current identification card issued by the health insurance issuer as the current address at which claims are received, or, if no address appears on the identification card, the current address for receipt of claims provided by the health insurance issuer to the department. Electronic claim - a claim submitted by a health care provider or its agent to a health insurance issuer in compliance with the provisions of the Health Insurance Portability and Accountability Act and in a format currently adopted by the United States Department of Health and Human Services or its successor. Enrollee or Insured - an individual who is enrolled or insured by a health insurance issuer or health insurance coverage.

2 Exception report - an electronic communication related to an electronic claim submission of each electronic claim transaction in that submission that is not deemed an accepted claim. Such communication is sent by a health insurance issuer or a health care clearinghouse to a health care provider or a health care clearinghouse from which the electronic claim transaction was received. Health care clearinghouse - a public or private entity that does either of the following.. Processes or facilitates the processing of information from another entity in a nonstandard format or containing nonstandard data content into standard data elements or a standard transaction. a. Receives a standard transaction from another entity and processes or facilitates the processing of information into a nonstandard format or nonstandard data content for a receiving entity. Health care provider or provider -. A physician or other health care practitioner licensed, certified, registered or otherwise authorized to perform specified health care services consistent with state law. a. A facility or institution providing health care services, including by not limited to a hospital or other licensed inpatient center, ambulatory surgical or treatment center, skilled nursing facility, inpatient hospice facility, residential treatment center, diagnostic, laboratory, or imaging center, or rehabilitation or other therapeutic health setting. Health care services - services, items, supplies, or drugs for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury or disease. Health insurance coverage or coverage - benefits consisting of health care services provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as health care services under any hospital or medical service policy or certificate, hospital or medical service plan contract, preferred provider organization agreement, or health maintenance organization contract offered by a health insurance issuer. However, health insurance coverage or coverage shall not include benefits due under Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950 or limited benefit and supplemental health insurance policies, benefits provided under a separate policy, certificate, or contract of insurance for accidents, disability income, limited scope dental or vision benefits, or benefits for long-term care, nursing home care, home health care, or specific diseases or illnesses. Health insurance issuer or issuer - any entity that offers health insurance coverage through a policy, contract, or certificate of insurance subject to state law that regulated the business of insurance. For purposes of this Part, a "health insurance issuer" or "issuer" shall include but not be limited to a health maintenance organization as defined and licensed pursuant to Part XII of this Title. A "health insurance issuer" or "issuer" shall not include any entity preempted as an employee benefit plan under the Employee Retirement Income Security Act of Health insurance issuer liability - the contractual liability of a health insurance issuer for covered health care services pursuant to the plan or policy provisions between the enrollee or insured and the health insurance issuer.

3 Network of providers or network - an entity, including but not limited to a preferred provider organization as defined in R.S. 40:2202(5) and (6), other than a health insurance issuer that, throughout contracts with health care providers, provides or arranges for access by individuals or groups of individuals eligible for health insurance coverage to health care services by health care providers who are not otherwise or individually contracted directly with the health insurance issuer. Nonelectronic claim - a claim submitted by a health care provider or its agent to a health insurance issuer or its agent using a HCFA 1500 form or a Uniform Billing Form 92 (UB92), as appropriate, or a successor to either of these forms adopted by the National Uniform Billing Committee or its successor. NPI - NPI stands for National Provider Identification number, which is a new number that each provider will obtain during By the end of 1st quarter 2007, Coventry will only be able to require the NPI number instead of the PIN #'s we are requiring today. Paid - the transfer by the health insurance issuer or its agent of the amount of the health insurance issuer liability on either of the following dates:. The date of mailing of a check via the United States Postal Service or a commercial carrier to the correct address. a. The date of electronic transfer of funds. PIN/UPIN - Unique provider identification number. A PIN can be any number and in fact Coventry does not have a standard approach. The unique number is used during the upload process (along with the tax ID number) to identify the specific provider submitting the claims. We can assign a "PIN" or use the provider's Medicare UPIN. Received or receipt - For a non-electronic claim: 1. For a claim mailed via the United States Postal Service for which no return receipt is requested, the physical receipt of the claim by the health insurance issuer or its agent designated for the receipt of claims at the correct claims address, as documented in accordance with claims filing procedures filed by the health insurance issuer with the department. 2. For a claim sent via a commercial carrier or via the United States Postal Service for which return receipt is requested, the date the delivery receipt is signed by the health insurance issuer or its agent designated for the receipt of claims at the correct claims address, as documented in accordance with claims filing procedures filed by the health insurance issuer with the department. a. For an electronic claim, either of the following: 1. For a claim submitted by a health care provider directly to the health insurance issuer or its agent designated for receipt of claims, the date of an electronic receipt issued by the health insurance issuer or its agent to the provider for the electronic claim or a batch of claims that includes the claim, unless the claim appears on a related exception report or was included in a batch of claims for which a batch rejection report was issued. 2. For a claim submitted by a health care provider to a health care clearinghouse, the date of an electronic receipt issued by the health

4 insurance issuer or its agent to the health care clearinghouse for the electronic claim or a batch of claims that includes the claim, unless the claim appears on a related exception report or was included in a batch of claims for which a batch rejection report was issued. Reject - A claim that cannot be accepted by the entity to which it is being submitted. The entity could be the clearinghouse. Emdeon/Envoy, or Coventry. Rejected claims are not loaded into the claims payment system so the reason is not returned on an EOB. Remittance advice - a written or electronic communication explaining the issuer's action on each claim adjudicated by the issuer. Such communication is sent by a health insurance issuer or its agent to a health care provider or its agent. Rural hospital - shall mean either. A hospital with sixty or fewer beds located either: 1. A parish with a population of less than fifty thousand according to the most recent federal decennial census. 2. A municipality with a population of less than twenty thousand according to the most recent federal decennial census. a. A hospital classified as a sole community hospital pursuant to 42 CFR Timely Filing Coventry must accept a claim within its timely filing limit or it will be denied for untimely filing. If you are not receiving the described clearinghouse and payer reports on a regular basis, please contact your clearinghouse or Emdeon/Envoy. A provider can avoid timely filing issues through understanding and regular monitoring of EDI Reports. This process will help to ensure all rejected claims are re-filed timely and electronically. Prompt Payment Procedure Plan for Non-Electronic Claim All of Coventry paper claims are sent to a PO Box in London, KY which the providers are instructed to mail all medical claims for that plan. A third party vendor, Affiliated Computer Services, Inc., ACS, is responsible for receiving, scanning and data entry for all paper claims. Step 1 - ACS Receives and Sorts the Mail The Mailroom prepping, sorting and scanning processes hold the key to getting the various types of claims into the system. Certified mail is picked up at the Post Office and processed as a unit by P.O. Box. The claims are sorted by classification. The standard sorts are: Single HCFA 1500's Single UB's Multiple HCFA 1500's Multiple UB's Non-standards Returns (Checks, photos, x-rays, etc.)

5 Note: Multiples are generally the claim form with some type of attachments. Step 2 - Scanning ACS Scans all documents both standard and nonstandard forms into Stored Image Retrieval (SIR) system. During the scanning process a ten digit document control number (DCN) is assigned. This DCN number is used as the claim number in the claims payment system. DCN is comprised of the following parts: 1st character type of entry Bar-coded claim keyed claim EDI claim (not used by ACS) 4. 3 back end scanned claim nonstandard keyed claim 2nd character year code -- 5 for 2005 and 4 for rd thru 5th character Julian date for the date the claim was received at ACS. This is the date used as the claim receive date. 6th thru 10th sequence number for each claim Example: would be the first claim keyed on 2/1/05 ACS stores all paper documents in a secured warehouse on the ACS grounds in London, KY for 2 months prior to being shredded. Images of claims are stored on optical disks for long term storage. Step 3 Keying the claim in the off-line program Claims are data captured by OCR or a data entry operator. OCR means Optical Character Recognition, which is an automated process for reading printed documents. OCR is sometimes referred to as Intelligent Character Recognition, or ICR. OCR software automatically extracts data from scanned images and makes that data available for electronic processing. ACS receives from Coventry weekly file downloads of valid service codes, modifiers, diagnosis codes. These files are used in ACS's off line program to validate the data elements keyed from the claims. Coventry has designated defaults for ACS to use if the provider submits invalid codes. At times, ACS keyers may not be able to enter a claim during off line claim entry due to missing data or hard to read images. ACS will reject claims back to the provider or to the claims department for processing. ACS performs a double check on critical fields in their off-line program by keying the data a second time. If there is a discrepancy in the data, the claim must be reviewed again.

6 Step 4 - ACS Reviews Rejects ACS keyers can reject claims during the process for a variety of reasons. These claims plus any that kick out due to programmed edits in the off-line entry process are reviewed by a special research team at ACS. Some of the items that go to this research team are as follows: Reject Reason Letter from ACS Reject Sent To Patient Name Missing Yes provider Provider Name Missing in Box 33 (name) Yes provider No Date of Service on claim Yes provider Any Detail line with Negative Charge No Forward to Claims Dept. Fed Tax ID missing/illegible Yes provider Type of Bill Missing/Illegible Yes provider Negative Dollar Amount No Forward to Claims Dept. No Rev or CPT codes Yes provider HCFA claim with more than 50 Detail Lines No Forward to Claims Dept. Any claim for more than $999,999 No Forward to Claims Dept. Anesthesia claim with no time No Forward to Claims Dept. Member Not Found returns from Coventry ACS will receive back a reject report for members not found for each file that is submitted to Coventry. ACS researches each member reject by logging on to multiple Coventry claims systems to locate the member. If found, ACS keys/rescans claim. If not found, ACS rejects claim to provider. Step 5 -- ACS Submits EDI file of keyed claims Twice a day, ACS extracts all claims that have been keyed since the last file, binds and sorts the claims by claim type and provider data to produce Addenda EDI files. ACS sends the files at 11:00am and 6:00 pm each day. Coventry s Provider e-services department is responsible for receiving and processing these files. Quality Controls A daily inventory tracking log generated by ACS is delivered to several Coventry employees; including, all Front End Operations staff, the Mangers of Service Operations, The Directors of Service Operations and the Vice Presidents of Service Operations. The inventory tracking logs

7 include claims scanned (received), keyed, rejected to the claims department, rejected to the provider, and any non-standard forms received. Each week, the inventory reports are summarized by ACS and delivered to the claims department. Prompt Payment Procedures Plan for Electronic EDI Claims EDI Claims Providers submit claims electronically to Coventry instead of printing the claim on paper and mailing it. Electronic claims, called EDI claims, are sent to an "electronic mailbox" called a payor number. Emdeon/Envoy is our primary EDI partner. Step 1 - EDI Claims submitted to Emdeon Providers submit electronic claims directly to Emdeon indirectly by using a claim clearinghouse. The clearinghouse will sort the claims and file them with different payers according to preset criteria. Coventry also checks the claims for accuracy against predefined edits during the upload process to the claims payment system. Key Hand Off Points At each hand off point, there is the possibility of a reject. Rejects and acceptance messages are passed back through the same channels as the originally submitted claims. Provider offices and clearinghouses must diligently review daily reject and status reports in order to manage their claims effectively. Provider to Clearinghouse: Provider offices typically print a report of all claims submitted to the Clearinghouse (called a transmission report). This report simply shows that the provider initially filed the claim. Not all clearinghouses edit the data submitted. They may or may not reject claims separately from Emdeon. Clearinghouse (or provider if no clearinghouse) to Emdeon: Emdeon performs edit checks and will always publish a report of all accepted and rejected claims. The clearinghouse must make sure that this information is passed back to the provider. Emdeon to Coventry: Coventry will validate claims against HIPAA compliance and against our claims payment system dictionary. During this process, any claim that has a data element that it cannot handle will be rejected or placed in a fatal edit status for the claims department to review. After the claims department reviews and processes these fatal edit claims, Coventry sends back to Emdeon a file of all accepted and rejected claims. Both pass the reject information along to the clearinghouse, which in turn must pass it along to the provider. EDI Submission Requirements Emdeon will verify that all EDI claims contain the required data - for example, a billed amount, a code on each line, tax id number, etc. Additionally, Emdeon allows us to specify additional electronic criteria prior to the claims being forwarded to us.

8 External EDI Requirements (in place at Envoy/Emdeon) These claim types cannot be accepted electronically. They will be rejected back by Emdeon to the provider/submitter. HCFA claims with more than 50 lines and UB claims with more than 999 claim lines Claims older than 365 days Time-based Anesthesia Claims that do not contain minutes. Step 2 - Emdeon Initially Processes the Claim File Regardless of the exact report, the provider must review a report that tells them the claims, which were initially rejected and a follow-up report that tells them any rejects from payers. Emdeon - Provider Daily Statistics Report (R022) This report contains statistics, by claim batch, for each provider. Emdeon rejected claims are listed with detail error explanations. It is important to review this report after each transmission to prevent "lost" claims. Emdeon/Envoy processes claim files overnight. This report is available to the submitter early the next morning. Key Fields on the Report: Header Information 1. Submitter Id - Emdeon/Envoy assigned number 2. Provider - unique provider's claim batch number 3. Date Received 4. Time Received 5. Claims Input - number and value of claims in the claim batch 6. Claims accepted - number and value of claims accepted in the claim batch 7. Claims rejected - number and value of claims rejected in the claim batch Detail Information 1. Patient Control Number 2. Patient Name 3. Field Name 4. Data in Error - The incorrect data supplied to Emdeon/Envoy 5. Error Description Note: Providers also have available to them a transmission report. This report is printed out of their practice management system and only indicates that they submitted the claim to their clearinghouse or to Emdeon/Envoy. Step 3 - Coventry receives the claims and checks them for HIPAA validation Coventry receives and validates 837 inbound professional and institutional EDI files in a 4010 A1 format from our trading partners. Coventry has an established process that will separate rejected claims from the full file instead of

9 holding up the full Emdeon EDI file. Clean claims and rejected claims will be separated from the file and processed accordingly. Step 4 - Coventry receives the file into our claims payment system All EDI files are loaded into the claims payment system through a file upload program which contains programs for the following: 1. member matching 2. provider matching 3. place of service derivation for UB's 4. CPT/Revenue Code selection for UB's 5. "quick pick" referral selection 6. other claims payment mapping logic When an EDI submission gets to a field that cannot identify or match the information that was provided electronically, the claims payment system will halt the process and place that claim aside. This is what is referred to as a "fatal edit". Any claim that is given a "Fatal Edit" status will not be accepted into the CHC claims payment system and will be identified on an R059 report. For EDI claims, the date the file is received at Coventry is the date used as the claim receive date. Fatal Edits There are several types of fatal edits that are generated during this process. Claims that cannot be worked are rejected back to the provider electronically. Step 5 - Coventry Rejects are communicated back to Providers/Submitters Coventry produces acknowledgment files on a daily basis which are sent back to Emdeon. From these files, Emdeon produces an R059, or an Unprocessed Claim Report. These reports inform the provider that the claims included are unable to be processed and also identifies corrective action that should be taken. Emdeon R059 Report - Key fields on this report: 1. Unprocessed claim message - reason claim cannot be processed 2. Patient Name 3. Patient control number 4. From and through date of service 5. Total Charges 6. Submitter process date 7. Envoy production date 8. Action - the suggested action by the payer to take on the claim 9. Carrier - payer responsible for providing this reject Pended Claims To identify any claims that have been pended, Coventry will provide written notice or the provider can access directprovider.com or Emdeon Office to identify any claims that have been pended.