GEORGIA FAMILIES PROGRAM REPORT 9: DENTAL CLAIMS GLOBAL ANALYSIS ANALYSES OF CLAIMS SUBMITTED BY DENTAL PROVIDERS TO GEORGIA CARE MANAGEMENT ORGANIZATIONS SEPTEMBER 4, 2009
TABLE OF CONTENTS Table of Contents... 2 Glossary... 3 Background... 6 Scope of Report... 8 Methodology... 9 Analytical Summaries and Findings... 12 Analysis I: Number of Days Required to Load Contract Terms 13 Analysis II: Number of Days Required to Complete Credentialing..16 Analysis III: Claims Adjudication 21 Analysis IV: Denied Claims Analysis 26 Analysis V: Prior Authorization Time 38 Analysis VI: Provider Retention.. 43 Analysis VII: Distribution of Dental Payments 46 Experiences of Georgia Families Enrolled Dental Providers... 52 Recommendations... 55 Exhibits... 58 Page 2
GLOSSARY The following terms are used throughout this document: Adjudicate A determination by the Care Management Organization of the outcome of a health care claim submitted by a health care provider. Claims may pay, deny, or in some cases have an alternative adjudication outcome. American Dental Association (ADA) Claim Form A billing claim form developed by the ADA as the standard billing form for dental services. Appeal A formal process whereby a health care provider requests that a payor review the outcome of a claim previously submitted to the payor for reimbursement. This term is typically reserved for claims that were originally denied for payment or paid at a lower amount by the payor, and the provider believes a payment should be made or paid at a higher amount. Avesis - The dental services subcontractor for Peach State Health Plan from June 1, 2006 through May 31, 2009. Capitation Claim - A per Medicaid and/or PeachCare for Kids TM member fixed payment amount made by DCH to a care management organization in return for the administration and provision of health care services rendered to the enrolled Medicaid and/or PeachCare for Kids TM member. Care Management Organization (CMO) A private organization that has entered into a risk-based contractual arrangement with DCH to obtain and finance care for enrolled Medicaid or PeachCare for Kids TM members. CMOs receive a per capita or capitation claim payment from DCH for each enrolled member. Claims Processing System A computer system or set of systems that determine the reimbursement amount for services billed by the health care provider. Clean Claim A claim received by the CMO for adjudication in a nationally accepted format in compliance with standard coding guidelines and which requires no further information, adjustment or alteration by the health care service provider in order to be processed and paid by the CMO. Per the DCH CMO model contract, the following exceptions apply: 1) A Claim for payment of expenses incurred during a Page 3
period of time for which premiums are delinquent; 2) A Claim for which Fraud is suspected; and 3) A Claim for which a Third Party Resource should be responsible. Credentialing is the process of establishing the qualifications of licensed health care providers, which may include the confirmation of their license, and confirmation of their education, and determining eligibility to participate in government health care programs. Denied Claim A claim submitted by a health care provider for reimbursement that is deemed by the payor to be ineligible for payment under the terms of the contract between the health care provider and payor. Doral Dental The dental services subcontractor for AMERIGROUP Community Care and WellCare of Georgia. Doral Dental became the dental services subcontractor for Peach State Health Plan for services on or after June 1, 2009. Explanation of Payment (EOP) A statement from a payor to a patient and/or health care provider that includes information detailing the pricing and adjudication of a fee-for-service claim and/or claim detail. May also be referred to as the Explanation of Benefits (EOB). Fee-For-Service (FFS) A health care delivery system in which a health care provider receives a specific reimbursement amount from the payor for each health care service provided to a patient. Fee-For-Service (FFS) Claim - A document, either paper or electronic, from a health care provider detailing health care services. Claims are submitted to a payor by a health care provider after a service has been provided to a patient covered by the payor. In some cases, the service must be authorized in advance. A FFS claim consists of one or more line items that detail all specific health care service(s) provided. Filing Time Limit The maximum amount of time a provider can utilize to submit a claim to a health plan. Georgia Families (GF) The risk-based managed care delivery program for Medicaid and PeachCare for Kids TM where the Department contracts with Care Management Organizations to manage the care of eligible members. Implementation For purposes of this report, the period of time from June 1, 2006 (or earlier, if applicable) through June 30, 2007. Page 4
Medicaid Management Information System (MMIS) Claims processing system used by the Department s fiscal agent claims processing vendor to process Georgia Medicaid and PeachCare for Kids TM FFS claims and capitation claims. Paid Claim A claim submitted by a health care provider for reimbursement that is deemed by the payor to be eligible for payment under the terms of the contract between the health care provider and payor. Payor An entity that reimburses a health care provider a portion or the entire health care expenses of a patient for whom the entity is financially responsible. PeachCare for Kids TM Program (PeachCare) The Georgia DCH s State Children s Health Insurance Program (SCHIP) funded by Title XXI of the Social Security Act, as amended. Post-Implementation For purposes of this report, the period of time beginning July 1, 2007 and continuing with dates of service through November 30, 2008. Prior Authorization (Authorization, PA, or Pre-Certification) An approval given by a health care payor to a health care provider before a health care service is performed, that allows the provider to perform a specific health care service for a patient who is the financial responsibility of the payor with the understanding that the payor will reimburse the provider for the service. Provider Number (or Provider Billing Number) An alphanumeric code utilized by health care payors to identify providers for billing, payment, and reporting purposes. Page 5
BACKGROUND Since implementation of the Georgia Families care management program in June 2006, the Department of Community Health (DCH) has been engaged in ongoing efforts to ensure the efficient operations and provision of health care services to the program s more than one million Georgia Medicaid and PeachCare for Kids TM members. The goal of this risk-based managed care program is to bring together private health plans, health care providers, and patients to work proactively to improve the health status of the program s members. DCH contracted with AMERIGROUP Community Care (AMGP), Peach State Health Plan (PSHP) and WellCare of Georgia (WellCare), (hereinafter referenced as CMOs ) to provide health care services under the Georgia Families care management program. DCH s initial contract with the CMOs, and its subsequent amendments, set forth the minimum requirements to which each CMO must adhere. The key provisions of the contract and amendments are summarized below. The covered benefits and services that must be provided to the Medicaid and PeachCare for Kids TM members. The provider network and service requirements for the CMOs. Medicaid and PeachCare for Kids TM enrollment and disenrollment requirements. Allowed and disallowed marketing activities. General provider contracting provisions. Quality improvement guidance. Reporting requirements and other areas of responsibility. In return for the CMOs satisfying the terms of the contract, the Department pays each CMO a monthly capitation payment for each enrolled Medicaid and PeachCare for Kids TM member, and certain one-time payments for newborns. Page 6
The table below illustrates the participation of the three CMOs by coverage region. Table 1: CMO Participation by Coverage Region Region AMGP PSHP WellCare Atlanta Central East North Southeast Southwest The Department of Community Health engaged Myers and Stauffer LC to study and report on specific aspects of the GF program, including certain issues presented by providers, selected claims paid or denied by CMOs, and selected GF policies and procedures. The initial phase of the engagement focused on hospital and physician provider subjects. Previously issued reports, available online at http://dch.georgia.gov, assessed payment and denial trends of hospital and physician claims, as well as certain CMO policies and procedures. This report addresses the payment, prior authorization, and denial trends of dental claims, as well as details on the length of time required to complete contract loading and credentialing during the implementation and post implementation periods. Subsequent phases of the engagement will likely include similar analyses related to other provider categories. The analyses included in this report include dental claims paid or denied by the CMOs dental subcontractors, Doral Dental, representing AMGP and WellCare, and Avesis, representing PSHP, with dates of service from June 1, 2006 through November 30, 2008. It should be acknowledged that this period includes the implementation period of June 1, 2006 through June 30, 2007. Trends and issues identified during this period may vary significantly from the same analyses performed on data from the post implementation periods. When sufficient data was available, we attempted to analyze and compare the implementation and post implementation periods to identify trends, improvements, or other changes that may have been experienced by members and providers in the post implementation period. Page 7
SCOPE OF REPORT The scope of this report includes analyses of the Georgia Families program dental claims experience and supporting processes such as the length of time required to load contract terms into the dental subcontractor s claims adjudication systems and to complete provider credentialing. Following meetings with the Georgia Dental Society and the Georgia Dental Association in February 2009, we sent to the Department a list of recommended global analyses. The list of analyses was developed considering the experiences and concerns raised by the provider industry. With some additions to our list, the Department approved the global analyses on March 20, 2009. In addition to the findings related to the global claims analyses, we also provide within this report an overview of the issues and concerns with the Georgia Families program, as expressed by dental providers in the February 2009 meetings with association groups and individual providers.. Page 8
METHODOLOGY The Department of Community Health requested that we analyze and report our findings by care management organization. We analyzed claims with incurred dates of service from June 1, 2006 through November 30, 2008. The analyses included dental claims billed on the ADA claim form. On December 16, 2008, Myers and Stauffer LC requested from each CMO and dental subcontractor claims data and related documentation needed for this engagement. We requested paid and denied claims, prior authorization files, fee schedules, provider information, copies of dental contracts, lists of explanations of benefit, and other supporting documentation. The due date of this request was January 30, 2009. AMGP/Doral submitted the substantial portion (i.e., that permitted us to begin analysis of the data) of their data by March 26, 2009 and responses to follow-up requests on June 19, 2009. PSHP/Avesis submitted the substantial portion of their data by March 16, 2009 and responses to follow-up requests on July 6, 2009. WellCare/Doral submitted the substantial portion of their data by April 6, 2009 and responses to followup requests on June 17, 2009. Following receipt of the requested information, we worked closely with the CMOs to address questions regarding the requested data, as well as to obtain clarification and additional information required to complete the analyses. In consultation with the Department, we established a cut-off date to receive data of June 30, 2009. Any information submitted after this date was not considered for purposes of the report. Although Myers and Stauffer requested all paid and denied claims with incurred dates of service from June 1, 2006 through November 30, 2008, analysis of the data appears to indicate that Avesis actually provided only those claims which were adjudicated during that time period. Therefore, the trends identified and results of analyses performed may be different than what the results would be if all paid and denied claims with dates of service during that time period had been provided. In consultation with the Department of Community Health, we analyzed the data and documentation received from the CMOs, and we did not independently validate or verify the information. Each CMO attested and warranted that the information they provided was accurate, complete, and truthful, and consistent with the ethics statements and policies of DCH. Page 9
A summary of findings from the following analyses are included in this report: Analysis I: Analysis II: Analysis III: Analysis IV: Analysis V: Analysis VI: Analysis VII: Length of Time Required to Load Contract Terms We analyzed the number of days required to load the contractual payment terms for each participating provider. Length of Time Required to Complete Credentialing of Providers We analyzed the number of days required to complete provider credentialing. Claims Adjudication Trends We performed various analyses of the claims data to determine the average number of days required to adjudicate claims. Denied Claims Analysis We performed analyses of the claims data to identify claim denial rates and reasons. Prior Authorization Time We analyzed the number of days between an authorization request and the date the authorization was approved or denied. Provider Retention We analyzed the claims data and provider network information to determine whether any trends or potential provider retention concerns might exist for the Georgia Families program. Distribution of Dental Payments We analyzed the frequency and distribution of payments by general dentist or specialist, by service category, and by members served. For reference, the following claim counts for each CMO/subcontractor were received and utilized in our analyses. These claims include dental service claims from general, pediatric, and other dental specialists with incurred dates of service from June 1, 2006 through November 30, 2008 billed on the ADA claim form. It should be noted that the claim counts and paid amounts cited herein may vary based on the whether the counts and paid amounts are from the claim header fields or claim detail fields. In some situations, there may be multiple EOP codes that are applicable to a single claim detail, which can cause minor variances in the counts and summaries. Minor differences may also be observed due to rounding. Page 10
Table 2: Paid and Denied Claims by CMO, Based on Final Payment Status AMGP PSHP WellCare Total Number of Paid Claims 2,250,873 3,070,291 4,497,391 9,818,555 Percent of Total Claims 81.4% 90.7% 81.4% 84.1% Number of Denied Claims 516,004 314,020 1,026,600 1,856,624 Percent of Total Claims 18.6% 9.3% 18.6% 15.9% Total Claims 2,766,877 3,384,311 5,523,991 11,675,179 Percent 100% 100% 100% 100% Page 11
ANALYTICAL SUMMARIES AND FINDINGS In addition to the findings by analysis type described below, please also refer to the findings summary presented at the end of this section. We have included additional detail of our analyses in the Exhibits to this report. Unless otherwise noted, the analyses below are based on paid and denied claims submitted by the CMOs and/or their subcontractor vendors, with dates of service from June 1, 2006 through November 2008, which is reflective of the inventory of claims as of the date the CMO extracted and submitted the information for our analysis. Page 12
ANALYSIS I: NUMBER OF DAYS REQUIRED TO LOAD CONTRACT TERMS To complete the analysis of the number of days required to load contract terms, we requested from the CMOs and/or their vendors the date the dental subcontractor entered the contract terms into their claims processing system as a participating provider and the effective date of the provider. However, because most dental providers have the same contractual reimbursement terms, this analysis measured the length of time required to establish a provider as a participating provider. Please also refer to Exhibit 1 for more information regarding this analysis. DCH Contract with the CMOs: We were unable to locate in either the original contract (effective June 1, 2006) or the current amended contract (effective July 1, 2008) between DCH and the CMOs a contractual requirement regarding the timeframe in which provider contracts must be loaded into the CMOs respective claims processing systems. AMERIGROUP Community Care (AMGP) Doral Dental, the dental subcontractor for AMGP, was not able to provide the date that dental contracts were loaded into their claims processing system. Therefore, we were unable to complete this analysis on AMGP/Doral Dental contracts. We were informed by Doral that they do not maintain the requested information. Peach State Health Plan (PSHP) For PSHP, the dental subcontractor Avesis provided the date that dental contracts were loaded into their claims processing system. We received information on 1,137 contracts. Certain providers within the provider file appeared to have been updated since the original date their contract terms were loaded, and therefore these providers (152) were excluded from further analysis since the date that their first contract was loaded was not available from the health plan. The analysis of the days required to load the contracts into Avesis claims processing system was based on the remaining 985 providers. Approximately 42 percent of the 985 dental contracts were loaded prior to their effective date. The 58 percent of contracts that were entered after their effective date had an average of 73 days between the effective date of the contract and the date the contract was loaded into the claims system. The range was between one day and 538 days. There were six contracts or approximately 0.6 percent that required more than a year to load into Avesis claims processing system. As indicated above, there were 152 contracts that were excluded from the analysis. The tables below include the summary statistics for PSHP/Avesis contracts. Page 13
Table 3: Number of Days Required to Load Dental Provider Contracts, June 1, 2006 through November 30, 2008 Number of Days After Effective Date of Participating Status to Date Provider Contract Was Loaded Providers PSHP/Avesis Percent Loaded Prior to Effective Date 416 42.2% 30 Days 187 19.0% 31 to 60 Days 121 12.3% 61 to 90 Days 94 9.5% 91 to 120 Days 63 6.4% 121 to 180 Days 62 6.3% 181 to 365 Days 36 3.7% >365 Days 6.6% Total Contracts Analyzed 985 100% Contracts Excluded 152 Total Contracts Loaded 1,137 In the figure below, we illustrate the average number of days, by period, to load dental contracts. The average days calculation excludes contracts that were loaded prior to the provider s participation effective date as well as the 152 contracts that appear to have been updated. As used throughout this report, we used the period June 1, 2006 through June 30, 2007 as the implementation period. As indicated in Figure 1, PSHP/Avesis has made improvements in the time required to load contract terms subsequent to the implementation period. They have significantly reduced the time required to load contract terms by 64 days, an 84 percent reduction. It should be noted, however, that Avesis contract with PSHP terminated on May 31, 2009. Beginning with services on or after June 1, 2009, Doral Dental will be the dental services subcontractor for PSHP. Dental providers who enroll with Doral may have different experiences than those providers who enrolled with Avesis. Page 14
Figure 1: Average Number of Days to Load PSHP/Avesis Dental Contracts, by Period 80 60 40 76 63 20 0 12 Implementation (6/1/06 to 6/30/07) Post Implementation (7/1/07 to 6/30/08) Post Implementation (7/1/08 to 11/30/08) WellCare of Georgia (WellCare) Doral Dental, the dental subcontractor for AMGP, was not able to provide the date that dental contracts were loaded into their claims processing system. Therefore, we were unable to complete this analysis for WellCare/Doral Dental contracts. We were informed by Doral that they do not maintain the requested information. Page 15
ANALYSIS II: DCH Contract with the CMOs: NUMBER OF DAYS REQUIRED TO COMPLETE CREDENTIALING The original model contract (effective June 1, 2006) between DCH and the CMOs did not include a specific contractual requirement listing a timeframe in which the credentialing process must be completed. DCH has since amended the model contract (effective July 1, 2008) by adding to section 4.8.15.1 the following statement The Contractor shall Credential all completed application packets within 120 calendar days of receipt. NOTE: The data analyzed in these claims analyses includes claims incurred prior to the contract amendment. To complete the analysis of the number of days required to complete credentialing, we requested from the CMOs and/or their dental subcontractors the date of the application, the date credentialing was completed, and the effective date of the provider. In most cases, the date of the application was not provided by the CMO or dental subcontractor. We were informed that they do not maintain the requested information. Therefore, to complete this analysis we used the number of days between the effective date of the provider s in-network status and the date that credentialing was completed. It should be noted, however, that this method likely results in a lower than actual number of days to complete credentialing since the effective date could be considerably different from the date of the application. The results below are based on the analysis completed using the effective date of the provider. Please also refer to Exhibit 2 for more information regarding this analysis. AMERIGROUP Community Care (AMGP) Approximately 85.6 percent of dentists for which credentialing dates were provided were credentialed prior to the effective date of the contract. The credentialing date was not provided for 78 contracts and were excluded from further analysis. For the 14.4 percent of dentists credentialed after the effective date, the average number of days between the effective date and credentialing date was 82 days. The range was between one day and 719 days. There were five contracts or approximately 0.6 percent that required more than a year to complete credentialing. Page 16
Table 4: Number of Days Required for Credentialing of Dental Providers, June 1, 2006 through November 30, 2008 AMGP/Doral Number of Days from Effective Date as Participating Provider to Credentialing Date Providers Percent Credentialed Prior to Effective Date 882 85.6% 30 Days of Effective Date 54 5.2% 31 to 60 Days After Effective Date 29 2.8% 61 to 90 Days After Effective Date 19 1.8% 91 to 120 Days After Effective Date 15 1.5% 121 to 180 Days After Effective Date 18 1.7% 181 to 365 Days After Effective Date 8 0.8% > 365 Days After Effective Date 5 0.6% Total Credentialing Dates Analyzed 1,030 100% Credentialing Date Not Provided 78 Total Contracts Entered 1,108 As indicated in Figure 2, AMGP/Doral made improvements in the time required to credential providers subsequent to the implementation period. For providers credentialed after their effective date, AMGP/Doral has reduced the time required to complete credentialing by 51 days, a 60 percent reduction. Figure 2: Average Number of Days to Credential AMGP/Doral Contracts, by Period 100 80 60 40 20 0 85 54 34 Implementation (6/1/06 to 6/30/07) Post Implementation (7/1/07 to 6/30/08) Post Implementation (7/1/08 to 11/30/08) Page 17
Peach State Health Plan (PSHP) Approximately 46.4 percent of dentists were credentialed prior to the effective date of the provider s in-network status. For the 53.6 percent of dentists credentialed after the effective date, the average number of days between the effective date and credentialing date was 80 days. The range was between one day and 846 days. There were five contracts or approximately 0.4 percent that required more than a year to complete credentialing. The credentialing date was provided for 100 percent of the contracts. Table 5: Number of Days Required for Credentialing of Dental Providers, June 1, 2006 through November 30, 2008 PSHP/Avesis Number of Days from Effective Date as Participating Provider to Credentialing Date Providers Percent Credentialed Prior to Effective Date 528 46.4% 30 Days of Effective Date 176 15.5% 31 to 60 Days After Effective Date 121 10.6% 61 to 90 Days After Effective Date 101 8.9% 91 to 120 Days After Effective Date 72 6.3% 121 to 180 Days After Effective Date 87 7.7% 181 to 365 Days After Effective Date 47 4.2% > 365 Days After Effective Date 5 0.4% Total Credentialing Dates Analyzed 1,137 100% Credentialing Date Not Provided 0 Total Contracts Entered 1,137 As indicated in Figure 3, PSHP/Avesis made improvements in the time required to credential providers subsequent to the implementation period. For providers credentialed after their effective date, PSHP/Avesis reduced the time required to complete credentialing by 69 days, an 82 percent reduction. Page 18
Figure 3: Average Number of Days to Credential PSHP/Avesis Contracts, by Period 100 80 60 40 20 0 84 59 15 Implementation (6/1/06 to 6/30/07) Post Implementation (7/1/07 to 6/30/08) Post Implementation (7/1/08 to 11/30/08) WellCare of Georgia (WellCare) Approximately 99.4 percent of dentists for which credentialing dates were provided were credentialed prior to the effective date of the provider s in-network status. The credentialing date was not provided for 78 contracts, and these contracts were excluded from further analysis. For the 0.6 percent of dentists credentialed after the effective date, the average number of days between the effective date and credentialing date was 111 days. The range was between 41 days and 219 days. There were no contracts that required more than a year to complete credentialing. Table 6: Number of Days Required for Credentialing of Dental Providers, June 1, 2006 through November 30, 2008 WellCare/Doral Number of Days from Effective Date as Participating Provider to Credentialing Date Providers Percent Credentialed Prior to Effective Date 1,065 99.4% 30 Days of Effective Date 0 0.0% 31 to 60 Days After Effective Date 3 0.3% 61 to 90 Days After Effective Date 0 0.0% 91 to 120 Days After Effective Date 0 0.0% 121 to 180 Days After Effective Date 2 0.2% 181 to 365 Days After Effective Date 1 0.1% > 365 Days After Effective Date 0 0.0% Total Credentialing Dates Analyzed 1,071 100% Credentialing Date Not Provided 78 Total Contracts Entered 1,149 Page 19
Because WellCare/Doral completed nearly all credentialing prior to the effective date of the provider s in-network status, there was no identifiable pattern on the number of days required to complete credentialing between the implementation period and the post implementation periods. Page 20
ANALYSIS III: CLAIMS ADJUDICATION The DCH Contract with the CMOs: The amended contract (effective July 1, 2008) between DCH and the CMOs contains the following language regarding the adjudication of claims. 4.16.1.1 The Contractor shall utilize the same time frames and deadlines for submission, processing, payment, denial, adjudication, and appeal of Medicaid claims as the time frames and deadlines that the Department of Community Health uses on claims its pays directly. The Contractor shall administer an effective, accurate and efficient Claims processing function that adjudicates and settles Provider Claims for Covered Services that are filed within the time frames specified by the Department of Community Health (see Part I. Policy and Procedures for Medicaid/PeachCare for Kids Manual) and in compliance with all applicable State and federal laws, rules and regulations. The original contract (effective June 1, 2006) contained only the second sentence of that contract requirement. Section 4.16.1.8 of both the original and amended contract states: Not later than the fifteenth (15 th) business day after the receipt of a Provider Claim that does not meet Clean Claim requirements, the Contractor shall suspend the Claim and request in writing (notification via e-mail, the CMO plan Web Site/Provider Portal or an interim Explanation of Benefits satisfies this requirement) all outstanding information such that the Claim can be deemed clean. Upon receipt of all the requested information from the Provider, the CMO plan shall complete processing of the Claim within fifteen (15) Business Days. In addition, as described in Analysis III, the amended contract between the CMOs and DCH now includes the following: 4.9.7.5.4 For all claims that are initially denied or underpaid by a care management organization but eventually determined or agreed to have been owed by the care management organization to a provider of health care services, the care management organization shall pay, in addition to the amount determined to be owed, interest of 20 percent per annum, calculated from 15 days after the date the claim was submitted. A care management organization shall pay all interest required to be paid under this provision or Code Section 33-24-59.5 automatically and simultaneously whenever payment is made for the claim giving rise to the interest payment. NOTE: The data analyzed in these claims analyses includes claims incurred prior to the contract amendment. Page 21
To complete the analysis of the time required to adjudicate claims, we requested from the CMOs and/or their subcontractors all dental claims paid or denied with service dates from June 1, 2006 through November 30, 2008. We used the date the claim was submitted to the health plan, as well as the adjudication date of the claim to determine the number of days. For purposes of this analysis, we assumed that all claims provided by the CMOs were clean claims. Suspended claims, if provided by the CMOs, are not included in the analysis. We analyzed the claims by period, considering the implementation period as June 1, 2006 through June 30, 2007 and the post implementation periods as SFY 2008, and SFY 2009 with dates of service through November 30, 2008. This analysis relied on the final adjudication status of the claim. Therefore, the results of this analysis may differ from other analyses that use all denied claims, regardless of whether they were reprocessed or adjusted at a later date. Please also refer to Exhibit 3 for more information regarding this analysis. AMERIGROUP Community Care (AMGP) AMGP/Doral adjudicated nearly 2.8 million claims from implementation through November 30, 2008. Of these claims, 98.6 percent were adjudicated in less than 15 days. AMGP/Doral reported paying $109,600 in interest to providers for claims not paid or denied in less than 15 days or claims incorrectly denied. Seventy-two (72) percent of the interest was paid to providers during the implementation period. Table 7: Claim Adjudication Statistics for AMGP/Doral, by Period Implementation Post Implementation Post Implementation AMGP/Doral (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Claims Paid 948,346 891,604 410,923 2,250,873 Percent Paid 79.2% 83.3% 82.4% 81.4% Claims Denied 249,772 178,652 87,580 516,004 Percent Denied 20.8% 16.7% 17.6% 18.6% Total Claims 1,198,118 1,070,256 498,503 2,766,877 Claims Adjudicated < 15 Days 1,196,010 1,042,142 490,675 2,728,827 Percent Adjudicated < 15 Days 99.8% 97.4% 98.4% 98.6% Claims Adjudicated 15 Days 2,108 28,114 7,828 38,050 Percent Adjudicated 15 Days 0.2% 2.6% 1.6% 1.4% Interest Paid $78,954 $19,522 $11,124 $109,600 In the figure below, we illustrate the percent of claims adjudicated in less than 15 days by period. After the implementation period, the adjudication rate decreased from 99.8 percent to 97.4 percent in SFY 2008. For claims through November 30, 2008, the adjudication rate has increased to 98.4 percent. Page 22
Figure 4: Percent of Claims Adjudicated < 15 Days, by Period, for AMGP/Doral 100.0% 99.8% 99.0% 98.0% 97.0% 96.0% 97.4% 98.4% Implementation (6/1/06-6/30/07) Post Implementation (7/1/07-6/30/08) Post Implementation (7/1/08 to 11/30/08) Peach State Health Plan (PSHP) PSHP/Avesis adjudicated nearly 3.4 million claims from implementation through November 30, 2008. Of these claims, 91.7 percent were adjudicated in less than 15 days. PSHP/Avesis reported paying $11,662 in interest to providers for claims not paid or denied in less than 15 days or claims incorrectly denied. Approximately 84.5 percent of the interest was paid to providers during the implementation period. Table 8: Claim Adjudication Statistics for PSHP/Avesis by Period Implementation Post Implementation Post Implementation PSHP/Avesis (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Claims Paid 1,353,960 1,179,440 536,891 3,070,291 Percent Paid 89.6% 91.1% 92.8% 90.7% Claims Denied 157,729 114,936 41,355 314,020 Percent Denied 10.4% 8.9% 7.2% 9.3% Total Claims 1,511,689 1,294,376 578,246 3,384,311 Claims Adjudicated < 15 Days 1,312,001 1,229,676 561,703 3,103,380 Percent Adjudicated < 15 Days 86.8% 95.0% 97.1% 91.7% Claims Adjudicated 15 Days 199,688 64,700 16,543 280,931 Percent Adjudicated 15 Days 13.2% 5.0% 2.9% 8.3% Interest Paid $9,856 $1,806 $0 $11,662 In the figure below, we illustrate the percent of claims adjudicated in less than 15 days by period. After the implementation period, the adjudication rate increased from 86.8 percent to 95.0 percent in SFY 2008. For claims through November 30, 2008, the adjudication rate has further increased to 97.1 percent. However, although there were Page 23
over 16,500 SFY 2009 claims that were not adjudicated in less than 15 days, PSHP/Avesis did not report paying interest on those claims. Figure 5: Percent of Claims Adjudicated < 15 Days, by Period, for PSHP/Avesis 100.0% 95.0% 90.0% 85.0% 80.0% 86.8% 95.0% 97.1% Implementation (6/1/06-6/30/07) Post Implementation (7/1/07-6/30/08) Post Implementation (7/1/08 to 11/30/08) WellCare of Georgia (WellCare) WellCare/Doral adjudicated over 5.5 million claims from implementation through November 30, 2008. Of these claims, 99.8 percent were adjudicated in less than 15 days. WellCare/Doral reported paying $132,166 in interest to providers for claims not paid or denied in less than 15 days or claims incorrectly denied. Eighty-eight (88) percent of the interest was paid to providers during the implementation period. Table 9: Claim Adjudication Statistics for WellCare/Doral Implementation Post Implementation Post Implementation WellCare/Doral (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Claims Paid 1,847,306 1,794,161 855,924 4,497,391 Percent Paid 79.0% 83.8% 82.1% 81.4% Claims Denied 492,063 347,769 186,768 1,026,600 Percent Denied 21.0% 16.2% 17.9% 18.6% Total Claims 2,339,369 2,141,930 1,042,692 5,523,991 Claims Adjudicated < 15 Days 2,339,230 2,133,778 1,042,575 5,515,583 Percent Adjudicated < 15 Days 99.99% 99.6% 99.98% 99.8% Claims Adjudicated 15 Days 139 8,152 117 8,408 Percent Adjudicated 15 Days 0.01% 0.4% 0.02% 0.2% Interest Paid $116,807 $14,507 $852 $132,166 Page 24
Because WellCare/Doral adjudicated nearly all claims in less than 15 days, there was no identifiable trend between the implementation period and the post implementation periods. Page 25
ANALYSIS IV: DENIED CLAIMS ANALYSIS The DCH Contract with the CMOs: The most recent contract (effective July 1, 2008) between the CMOs and DCH addresses claims that are inappropriately denied or underpaid: 4.9.7.5.4 For all claims that are initially denied or underpaid by a care management organization but eventually determined or agreed to have been owed by the care management organization to a provider of health care services, the care management organization shall pay, in addition to the amount determined to be owed, interest of 20 percent per annum, calculated from 15 days after the date the claim was submitted. A care management organization shall pay all interest required to be paid under this provision or Code Section 33-24-59.5 automatically and simultaneously whenever payment is made for the claim giving rise to the interest payment. NOTE: The data analyzed in these claims analyses includes claims incurred prior to the contract amendment. To complete the analysis of denied claims, we requested from the CMOs and/or their subcontractors all dental claims paid or denied with service dates from June 1, 2006 through November 30, 2008. We analyzed and tabulated the denied claims by reason code listed on the claim. When applicable, we analyzed whether denied claims were later paid, and whether those payments included interest. We further analyzed the claims by period, considering the implementation period as June 1, 2006 through June 30, 2007 and the post implementation periods as SFY 2008, and SFY 2009 with dates of service through November 30, 2008. This analysis was completed using all denied claims, regardless of whether they were reprocessed or adjusted at a later date. Therefore, the results from this analysis may differ from other analyses that use only the final adjudication status of the claim. Please also refer to Exhibit 4 for more information regarding this analysis. AMERIGROUP Community Care (AMGP) AMGP/Doral processed over 2.8 million dental claim detail lines with dates of service from June 1, 2006 through November 30, 2008. Approximately 20 percent of these claim detail lines were denied. In the table and figure below, we illustrate the variability of denied claim detail lines by period. During implementation, 23.4 percent of dental claim detail lines were denied. In the post implementation periods, 17.8 percent of claim detail lines denied, respectively. Page 26
Table 10: Claim Line Denial Statistics, by Period for AMGP/Doral AMGP/Doral Implementation (6/1/06 6/30/07) Post Implementation (7/1/07 6/30/08) Post Implementation (7/1/08 11/30/08) Total Paid Detail Lines 948,346 891,666 410,990 2,251,002 Denied Detail Lines 289,418 193,326 89,302 572,046 Total Detail Lines 1,237,764 1,084,992 500,292 2,823,048 Percent Denied 23.4% 17.8% 17.8% 20.3% The percentage of denied AMGP/Doral claim detail lines peaked in August 2006 at 33.6 percent, and other than December 2006, declined to the lowest level of 12.3 percent in February 2008. Since its lowest point in February 2008, the percentage of denied claim detail lines has increased and, on average, remains at approximately 17.2 percent. Figure 6: Percent of Claim Detail Lines Denied, by Month for AMGP/Doral 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Of the 572,046 claim detail line denials, AMGP/Doral reversed and later paid 52,894, or 9.2 percent with an average of 50 days between the date of the denial and the payment. AMGP/Doral reported paying $736 in interest related to these claims. The figure below illustrates the percentage of claim detail line denials that were later paid, by month. The claims data suggests an improving trend in the need to reprocess previously denied claim detail lines. Page 27
Figure 7: AMGP/Doral Percentage of Denied Claim Detail Lines Later Paid, By Month 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 In the table below, we present the number of denials by reason code category. For purposes of this analysis and for ease of reference, we developed the categories, mapping each denial reason code into a specific category. Of the eleven categories, only one ( Non-Covered Benefit or Service ) appears to be significantly increasing in the number of denials, from 27.5 percent during implementation to 51.8 percent during SFY 2009. The category Provider Issue has decreased significantly from 17.5 percent during implementation to 4.8 percent in SFY 2009. Table 11: AMGP/Doral Claim Detail Line Denials by Reason Categories by Period AMGP/Doral Implementation (6/1/06-6/30/07) Post Implementation (7/1/07-6/30/08) Post Implementation (7/1/08-11/30/08) Denial Reason Category Denials Percent Denials Percent Denials Percent Payment Issue 1,060 0.4% 967 0.5% 322 0.4% Duplicate Submission 69,851 24.0% 50,152 26.3% 22,874 25.3% Non-Covered Benefit or Service 80,024 27.5% 82,145 42.9% 46,751 51.7% Eligibility Issue 25,809 8.9% 17,981 9.4% 6,145 6.8% Incorrect/Invalid Information 2,523 0.9% 1,796 0.9% 689 0.8% Provider Issue 51,014 17.5% 8,423 4.4% 4,294 4.8% Time Filing Limit 21,403 7.3% 12,061 6.3% 2,595 2.9% Procedure Code/Tooth/Surface Issue 33,853 11.6% 13,642 7.1% 5,117 5.7% Processing Issue 37 0.0% 3 0.0% 7 0.0% Page 28
AMGP/Doral Implementation (6/1/06-6/30/07) Post Implementation (7/1/07-6/30/08) Post Implementation (7/1/08-11/30/08) Authorization Issue 5,608 1.9% 4,174 2.2% 1,423 1.6% No Denial Reason 18 0.0% 0 0.0% 0 0.0% TOTAL 291,200 100% 191,344 100% 90,217 100% In the table below, we illustrate the percent of claim detail lines that denied by provider. The data are presented based on the range of denied claim detail lines. For example, the range 50% - 74.99% represents the number of providers that had between 50 percent and 74.9 percent of their claim detail lines denied. The last column of the table illustrates the average percentage of denied claim detail lines for providers within the range. Seventy (70) percent of AMGP/Doral providers had 25 percent or less of their claim detail lines denied, while 29.9 percent of providers had 25 percent or more of their claim detail lines denied. Of this group, eight providers had more than 75 percent of their claim detail lines denied. Table 12: Range of Denied Claim Detail Lines for AMGP/Doral Providers with At Least 50 Claim Detail Lines Range Providers Percent Paid Claims Denied Total Avg. % Providers Claims Claims Denied 75% 8 0.8% 1,747 6,573 8,320 83.6% 50% - 74.99% 40 4.2% 29,399 48,286 77,685 59.1% 25% - 49.99% 239 24.9% 313,679 167,995 481,674 34.3% < 25% 672 70.1% 1,904,695 348,269 2,252,964 15.5% Total 959 100% 2,249,520 571,123 2,820,643 22.6% In the table below, we illustrate by period the number of claim detail lines that were denied for member eligibility. There is a decreasing trend in the number of claim detail lines denied for member eligibility, from 25,809 during implementation to 17,981 in the first post implementation period. There were 6,145 denied claim detail lines for member eligibility in the second post implementation period, which is a partial year. Of the total 49,935 claim detail line denials for member eligibility, 4,821 (9.7 percent) appeared to be eligible according to the ACS lock-in file. While there appears to be a decreasing trend in the overall number of denials related to member eligibility, the data indicates that a greater portion of them appear as eligible in the ACS lock-in file. Page 29
Table 13: AMGP/Doral Claim Detail Lines Denied for Member Eligibility Implementation Post Implementation Post Implementation AMGP/Doral (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Denied Claim Detail Lines For Member Eligibility 25,809 17,981 6,145 49,935 Claim Detail Lines for Members Eligible per Lock-in File 518 3,050 1,253 4,821 Percent Claim Detail Lines for Members Eligible 2.0% 17.0% 20.4% 9.7% AMGP/Doral had 11,205 claim lines, or 2.0 percent, that were denied for reasons related to prior authorization. During implementation, 1.9 percent of claims denied, and this figure increased to 2.2 percent during the first post implementation period. For SFY 2009 through November 2008, this amount has decreased to 1.6 percent. Table 14: AMGP/Doral Claim Detail Lines Denied for Prior Authorization Implementation Post Implementation Post Implementation AMGP/Doral (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Denied Claim Detail Lines 289,418 193,326 89,302 572,046 Claim Detail Lines Denied for Authorization Reasons 5,608 4,174 1,423 11,205 Percent Denied for Authorization 1.9% 2.2% 1.6% 2.0% Peach State Health Plan (PSHP) PSHP/Avesis processed 3.4 million claim detail lines with dates of service from June 1, 2006 through November 30, 2008. Nine percent of these claim detail lines were denied. It should be noted that the claim status indicator for the detail claim lines in the data provided by PSHP/Avesis appears to reflect the status for the entire claim (header status) versus the status of the individual detail line. For example, the header status may indicate the claim paid yet there may be one or more detail lines on that claim that were, in fact, denied. The detail line status was requested from PSHP/Avesis but we were informed that this information is not available. Therefore, it is likely that the denial rates for the PSHP/Avesis dental claims are understated. In the table and figure below, we illustrate the variability of denied claim detail lines by period. During implementation, 10.4 percent of dental claim detail lines were denied. In the post implementation periods, 8.9 percent and 7.1 percent of claim detail lines denied, respectively. Page 30
Table 15: Claim Line Denial Statistics, by Period for PSHP/Avesis PSHP/Avesis Implementation (6/1/06 6/30/07) Post Implementation (7/1/07 6/30/08) Post Implementation (7/1/08 11/30/08) Total Paid Detail Lines 1,364,183 1,183,141 539,741 3,087,065 Denied Detail Lines 158,144 115,013 41,511 314,668 Total Detail Lines 1,522,327 1,298,154 581,252 3,401,733 Percent Denied 10.4% 8.9% 7.1% 9.3% The percentage of denied PSHP/Avesis claim detail lines peaked in August 2006 at 26.8 percent, and other than October 2007, declined to its lowest level of 5.7 percent in July 2007. Since its lowest point in July 2007, the percentage of denied claim detail lines increased and, on average, remains at approximately 8.5 percent. Figure 8: Percent of Claim Detail Lines Denied, by Month for PSHP/Avesis 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Of the 314,668 claim detail line denials, PSHP/Avesis reversed and later paid 16,152 or 5.1 percent with an average of 41 days between the date of the denial and the payment. PSHP/Avesis reported paying $97 in interest related to these claims. The figure below illustrates the percentage of claim detail line denials that were later paid, by month. The claims data suggests an improving trend in the need to reprocess previously denied claim detail lines. Page 31
Figure 9: PSHP/Avesis Percentage of Denied Claim Detail Lines Later Paid, By Month 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Because PSHP/Avesis did not provide explanation of payment codes with their denied claims, we are not able to analyze the causes of denied claim detail lines for the implementation period in comparison to the post implementation periods. Table 16: PSHP/Avesis Claim Detail Line Denials by Reason Categories by Period PSHP/Avesis Implementation (6/1/06-6/30/07) Post Implementation (7/1/07-6/30/08) Post Implementation (7/1/08-11/30/08) Denial Reason Category Denials Percent Denials Percent Denials Percent Payment Issue Duplicate Submission Non-Covered Benefit or Service Eligibility Issue Incorrect/Invalid Information Provider Issue Time Filing Limit Procedure Code/Tooth/Surface Issue Processing Issue Authorization Issue No Denial Reason TOTAL Page 32
In the table below, we illustrate that 92.7 percent of providers had 25 percent or less of their claim detail lines denied, while 7.2 percent of providers had 25 percent or more of their claim detail lines denied. Two providers had more than 50 percent of their claim detail lines denied. Table 17: Range of Denied Claim Detail Lines for PSHP/Avesis Providers with At Least 50 Claim Lines Range Providers Percent Providers Paid Claims Denied Claims Total Claims Avg. % Denied 75% 0 0.0% 0 0 0 N/A 50% - 74.99% 2 0.2% 105 134 239 59.4% 25% - 49.99% 61 7.1% 103,103 49,306 152,409 33.1% < 25% 804 92.7% 2,981,903 264,575 3,246,478 9.2% Total 867 100% 3,085,111 314,015 3,399,126 11.0% Because PSHP/Avesis did not provide explanation of payment codes, we are unable to report on the trends related to member eligibility related denials. Table 18: PSHP/Avesis Claim Detail Lines Denied for Member Eligibility Implementation Post Implementation Post Implementation PSHP/Avesis (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Denied Claim Detail Lines For Member Eligibility Claim Detail Lines for Members Eligible per Lock-in File Percent Claim Detail Lines for Members Eligible Because PSHP/Avesis did not provide explanation of payment codes, we are unable to report on the trends related to prior authorization related denials. Page 33
Table 19: PSHP/Avesis Claim Detail Lines Denied for Prior Authorization Implementation Post Implementation Post Implementation PSHP/Avesis (6/1/06-6/30/07) (7/1/07-6/30/08) (7/1/08-11/30/08) Total Denied Claim Detail Lines Claim Detail Lines Denied for Authorization Reasons Percent Denied for Authorization WellCare of Georgia (WellCare) WellCare/Doral processed 5.6 million claim detail Lines with dates of service from June 1, 2006 through November 30, 2008. Twenty (20) percent of these claim detail lines were denied. In the table and figure below, we illustrate the variability of denied claim detail lines by period. During implementation, 23.7 percent of dental claim detail lines were denied. In the post implementation periods, 17.3 percent and 18.2 percent of claim detail lines denied, respectively. It is noteworthy that both Doral plans from AMGP and WellCare have similar claim detail line denial trends with AMGP/Doral at 20.3 percent and WellCare/Doral at 20.2 percent, with each plan having similar trends between the implementation and post implementation periods. Table 20: Claim Detail Line Denial Statistics, by Period for WellCare/Doral WellCare/Doral Implementation (6/1/06 6/30/07) Post Implementation (7/1/07 6/30/08) Post Implementation (7/1/08 11/30/08) Total Paid Detail Lines 1,847,309 1,794,170 855,925 4,497,404 Denied Detail Lines 575,135 374,702 190,816 1,140,653 Total Detail Lines 2,422,444 2,168,872 1,046,741 5,638,057 Percent Denied 23.7% 17.3% 18.2% 20.2% The percentage of denied WellCare/Doral claim detail lines peaked in December 2006 at 32 percent, and other than May and August 2006, declined to its lowest level of 14.4 percent in February 2008. Since its lowest point in February 2008, the percentage of denied claim detail lines increased and, on average, remains at 17.4 percent. Page 34