Harbor s Payment to Providers Policy and Procedures is available on the Harbor website and will be updated annually or as changes are necessary.

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1 Original Approval Date: 01/31/2006 Page 1 of 10 I. SCOPE The scope of this policy involves all Harbor Health Plan, Inc. (Harbor) contracted and non-contracted Practitioners/Providers; Harbor s Contract and Credentialing Committee; Provider Services and Claims Department. II. POLICY Harbor maintains its Payment to Providers Policy and Procedures for processing all Practitioners/Providers claims for services provided to eligible Medicaid Members. Harbor shall make timely payments to all Providers for covered services rendered to eligible Members when submitted as a clean claim and is in compliance with established Uniform Billing and Michigan Department of Community Health (MDCH) submission requirements. Harbor shall meet HIPAA and MDCH guidelines and requirements for electronic capacity, including compliance with HIPAA Transactions and Code Sets Standards. Harbor s Payment to Providers Policy and Procedures is available on the Harbor website and will be updated annually or as changes are necessary. III. DEFINITIONS: A. Clean Claim: a claim that at a minimum identifies or describes all of the following: 1. The Patient s Identification number, name, address, and date of birth; 2. The day, month, and year the service was rendered; 3. A description of the rendered service using the Current Procedure Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), International Classification of Disease (ICD-9-CM) Page 1 of 10

2 Original Approval Date: 01/31/2006 Page 2 of 10 universal identifying procedure code, as designated Center for Medicare/Medicaid Services (CMS) and National Uniform Billing Committee (NUBC). 4. The Rendering Provider s Name and National Provider Identification number (NPI), the Billing Provider s Name, Tax Identification number, NPI number, and the location of the service; 5. Practitioners/Providers certification as required under MCL b(17) (that a claim for payment for services rendered to a medically indigent individual is true, accurate, prepared with the knowledge and consent of the Provider, and does not contain untrue, misleading, or deceptive information) and identifying information required by MCL b(21) (Practitioners/Providers must identify each attending, referring, or prescribing physician, dentist, or other practitioner by means of a program identification number on each claim or adjustment); 6. Substantiation of medical necessity and appropriateness of service; 7. An authorization number, if applicable; and 8. Any additional documentation required by Harbor, if applicable. B. HIPAA: The Health Insurance Portability and Accountability Act of 1996, Public Law C. Practitioner / Provider: a licensed professional, physician, nurse practitioner, hospital, group practice, nursing home, pharmacy, home health care agency, durable medical equipment agency, maternal infant health provider or any individual or group of individuals that provides a health care service. IV. PROCEDURE Delegated Responsibilty Page 2 of 10

3 Original Approval Date: 01/31/2006 Page 3 of 10 A. General Requirements 1. All Providers are responsible for knowing what services are covered under Medicaid. All professional services must be submitted on a CMS-1500 claim form. Facility claims must be submitted on a UB-04 claim form. 2. All claims must be submitted electronically or mailed to the Harbor address as instructed in the Provider Manual 3. Providers are responsible for verifying member s eligibility prior to rendering services. Harbor will not pay for any services rendered to a Medicaid recipient prior to his/her effective date except services for a newborn that is retroactively enrolled back to the date of birth. Payments will not be made for Members after the date of disenrollment except for an inpatient hospitalization that is concurrent with the date of disenrollment. 4. Providers are responsible for obtaining the required Prior Authorization/Referral prior to rendering services. Prior authorization policy and procedures are outlined in the Health Care Management / Utilization Management Program. 5. Harbor shall inform Providers of its prior authorization policy and procedures including elements needed to substantiate medical necessity of a claim. 6. Providers who are not contracted with Harbor must follow all Harbor guidelines and procedures for the filing of clean claims. 7. Claims submitted for Medicaid Members for which another known payment source is available are not considered to be clean claims until the Practitioners/Providers has exhausted all other sources of payment before billing Harbor. Page 3 of 10

4 Original Approval Date: 01/31/2006 Page 4 of Harbor or its Practitioners/Providers shall not require co-payments, patient-pay amounts, or other cost-sharing arrangements unless authorized by MDCH. Providers shall not bill Members for the difference between the Provider s charge and Harbor s payment for covered services. Providers will not seek or accept additional or supplemental payment from a Member, his/her family, or representative, in addition to the amount paid by Harbor even if the Member has signed an agreement to do so. These provisions also apply to out-of-network Providers. 9. Members shall not be held liable for any of the following provisions (consistent with 42 CFR and 42 CFR ): a. Harbor s debts, in case of insolvency; b. Covered services provided to the Member for which the State did not pay Harbor; c. Covered services provided to the Member for which the State or Harbor does not pay the Practitioners/Providers due to contractual, referral or other arrangement; or d. Payments for covered services furnished under a contract, referral or other arrangement, to the extent that those payments are in excess of the amount that the Member would owe if Harbor provided the services directly. 10. Harbor may use a pre and post-payment review methodology to assure claims have been paid appropriately. B. Claims Processing 1. Clean Claim received by Harbor will be stamped with the date received and entered into Harbor s Management Information System (MIS) within an appropriate time frame to ensure payment within 45 Page 4 of 10

5 Original Approval Date: 01/31/2006 Page 5 of 10 days of receipt. When the claim is entered into Harbor s MIS, a Claim Reference Number is assigned. This Claim Reference Number is used to track the claim. 2. Defect claims will be stamped with the date received and returned to the Practitioner/Provider with notification of the defect within 30 days of receipt. 3. New claims must be submitted to Harbor within 1 year (365 days) of the service date. New claims submitted past the filing limit must have supporting documentation that explains the reasons for late filing. 4. Replacement/Corrected claims that are over the filing limit must have continuous activity to be considered for payment; and must be submitted within 180 days of the original payment/rejection date. 5. Harbor grants exceptions to the claim submission filing requirement in the following circumstances: a. The Practitioners/Providers received erroneous written instructions from Harbor staff; b. Harbor staff failed to enter authorization; or issued an erroneous prior authorization; c. Other documented administrative errors by Harbor or its contractors; d. Eligibility was established retroactively; e. Processing of primary insurance was delayed; and f. Practitioners/Providers received incorrect billing information from the patient and billed the Medicaid program first. Page 5 of 10

6 Original Approval Date: 01/31/2006 Page 6 of All claims processed through Harbor s MIS undergo a pre-payment audit review prior to each check-run to verify the accuracy of patient demographic information; diagnoses; services (CPT/HCPCS); rendering and billing provider information; and also to ensure that current Medicaid Fee Schedules, and/or specific provider contract rates are paid appropriately. 7. Claim processing errors identified in the pre-payment audit review are corrected by the processor that made the error; and documented for quality assurance measurements for individual staff and departmental performance management. 8. Harbor generates and mails claim checks, along with explanations of benefits (remittance advice) to Providers biweekly. C. Provider Payments: Primary Care Physician 1. Harbor contracts Primary Care Physician s (PCP) under a capitation model of a set dollar amount per member per month (PMPM); or under a fee-for-service (FFS) model. a. PCP s contracted under the capitation agreement are reimbursed a set dollar amount PMPM for all services rendered to assigned patients except for Pay for Performance services, which are paid an incentive payment on a quarterly basis for specific CPT/HCPCS codes. b. PCP s contracted under the FFS model are reimbursed the Medicaid Fee Schedule published at the time the claim is processed for all covered services, and an additional incentive payment for Pay for Performance services rendered to assigned patients on a quarterly basis. Page 6 of 10

7 Original Approval Date: 01/31/2006 Page 7 of 10 c. The fee-for-service model is most appropriate when Harbor membership is insufficient or financial viability is threatened for either the Practitioners/Providers or the Plan if operated under a capitation reimbursement model. d. All PCP s whether FFS or Capitated must submit encounter data to Harbor in a timely manner using the CMS-1500 claim form or electronic claim submission. D. Provider Payments: Specialty Providers/Medical Clinics 1. Contracted Specialty Providers are paid Fee-For-Service based on the Michigan Medicaid Fee Schedule published at the time the claim is processed, or a fee negotiated by Harbor for each individual claim submitted to Harbor. 2. Non-Contracted Specialty Providers are paid Fee-For-Service based on the Michigan Medicaid Fee Schedule published at the time the claim is processed for each individual claim submitted to Harbor. E. Provider Payments: Outpatient Hospital 1. Outpatient Hospital Services are reimbursed Fee-For-Service according to the Ambulatory Payment Classification (APC) - Outpatient Perspective Payment System (OPPS) methodology for each individual claim submitted to Harbor. 2. Harbor utilizes the Ingenix Web.Strat software application to price Outpatient hospital claim submissions. Harbor maintains a service agreement with Ingenix to ensure timely updates to the Web.Strat software. 3. Harbor may reimburse a flat rate to contracted providers for specific services as defined in the hospitals contract terms. F. Provider Payments: Inpatient Hospital Page 7 of 10

8 Original Approval Date: 01/31/2006 Page 8 of Harbor shall reimburse contracted and non-contracted inpatient hospital claims at 100% of the Medicaid DRG payment methodology for authorized inpatient admissions, unless otherwise stated in the provider s contract. 2. Harbor may reimburse contracted providers up to 110% of the Medicaid DRG payment methodology as defined in the hospital contract terms. 3. All inpatient hospital professional services will be reimbursed Fee-For- Service based on the Michigan Medicaid Fee Schedule published at the time the claim is processed. G. Payment Procedures 1. Harbor shall pay all clean claims for contracted and non-contracted providers within 45 days of receipt using the Medicaid Fee Schedule in effect on the date of service or other negotiated rate. 2. When Harbor has received the claim, it has 30 days from that date to identify in writing to the Practitioners/Providers any defects in the claim. a. If the claim is defective due to failure to comply with any of the established Medicaid clean claim requirements, the claim does not qualify as a clean claim and the 45 day payment timeline for clean claims no longer applies. b. Harbor shall notify the Practitioners/Providers of the claim defect either electronically or on paper. c. The Practitioners/Providers has 30 days from the date of receipt of the notice of defective claim to correct the defect and resubmit the corrected claim to Harbor. Page 8 of 10

9 Original Approval Date: 01/31/2006 Page 9 of 10 d. If the corrected claim that is returned to Harbor is still defective for the same or another reason, Harbor shall notify the Practitioners/Providers of the remaining defect within 30 days from the date Harbor receives the corrected claim. e. Harbor will also notify the Insurance Commissioner of the defect on the required form. 3. Upon receipt of any claim, if Harbor determines that one or more covered services listed on a claim are payable, Harbor will pay for those services and will not deny the entire claim because one or more services listed are in dispute or not covered. 4. The Practitioners/Providers must allow Harbor at least 30 days to provide notice of any reason for not paying the claim. If a nonpayment notice has not been sent within 30 days, the Practitioners/Providers may assume payment will be made within 45 days from the date of receipt by Harbor. If Practitioners/Providers resubmit a claim before the 45 days have elapsed, it will not be considered a clean claim. 5. If the claim or a service listed on a claim form becomes the subject of an adverse determination on payment, Harbor maintains a Claims Payment Appeals process which the Practitioners/Providers may utilize (see Harbor s Practitioner/Provider Complaints and Appeals Process). 6. Alternately, the Practitioner/Provider may: a. Request an external review by the Insurance Commissioner within 30 days after the Practitioner/Provider receives notice of the adverse determination; or b. Request arbitration of the dispute. Page 9 of 10

10 Original Approval Date: 01/31/2006 Page 10 of 10 V. MATERIALS i. If the Practitioner/Provider requests arbitration, Harbor shall participate with the Practitioner/Provider in a binding arbitration process pursuant to a model arbitration agreement developed by DCH. ii. The party found to be at fault will be assessed the costs of the arbitrator. iii. If both parties are at fault, the cost of the arbitrator will be apportioned. iv. However, Practitioners/Provider may only choose either an external review by the Insurance Commissioner or arbitration, not both. 1. Claims and Encounter Data Process Flow Chart 2. Pre-Pay Out Audit Process Tool 3. DCH Model Arbitration Agreement 4. Harbor Provider Manual 5. OFIR Forms ( Defective Claim Notification ; Request for OFIR External Review ) VI. REPORTING/RECORDS 1. MDCH Monthly Claims Report 2. Pre Pay Out Edit Listing Report Page 10 of 10