We Answer Your Questions

Q: After we receive a letter from HDI identifying our claim for take back, we receive two Medicare RA-s: one, showing a zero payment and another showing a take back of the amount Medicare originally paid for the claim. Why is Medicare taking their money back so soon, before we ever get a chance to appeal?

A: Medicare is not taking their money at this point – this remittance advice that looks like a take-back (with code N432) is really a tag, or a place holder.

Q: We have been seeing a significant increase in the number of denials of Medi-Cal claims in the last six months. What is happening? What can we do about it?

A: What you are seeing are the effects of Hewlett Packard being phased out as the Department of Healthcare Services (DHCS) Fiscal Intermediary. Just make sure you do not get caught up in the re-billing cycle – remember, you can keep re-submitting your claim for processing within the first six months after the discharge date. After that, unless you have a valid late billing excuse, you will have your claims cut back by 25% and then 50% and after 1 year, you will just get a plain denial. Make sure your staff is aware they need to comply with the Medi-Cal administrative appeals process and that they submit their Claim Inquiry Form (CIF) and appeals in a timely manner.

Q: Medi-Cal is not paying for our expensive supplies. What can we do about it?

A: Make sure you comply with their invoice requirements – do not submit purchase orders, it is not the same thing.

Q: How do we go about having Medi-Cal reprocess an incorrectly paid claim?

A: It happens all the time – e.g., on an in-patient claim Medi-Cal deducts an incorrect part B Medicare amount or, processes claim with an incorrect patient id, deducts wrong share of cost… The fastest way to accomplish the reprocessing is to first do a CIF for take back and then promptly rebill (if you are still within the first 6 months after discharge) or, appeal once you receive the warrant showing that the take back was performed. To avoid having your CIF denied as untimely, make sure you mark the “overpayment” box.

Q: If a claim is the financial risk of another capitated hospital / IPA or medical group, can we still go after the health plans for payment?

A: Yes. Although hospitals are aware of the process of cap and deduct, very few hospitals actually take advantage of the process. Hospitals have to make sure that they bill the claim(s) to all parties and appeal to all parties within a timely manner. Those claims that were never billed to the health plans and appealed timely within the deadlines- regulatory or contractual deadlines are the claims difficult to recover payments. Hospitals should also look at their contracts to determine what sort of payment obligations a health plan has when a claim is capitated.

Q: Is a denial for no authorization the same as a denial for medical necessity?

A: No. Many people confuse the two. Denials for no authorization are a failure to follow an administrative procedure of obtaining pre-certification, whereas medical necessity is strictly a clinical denial. If a contract between the parties exists, that contract generally provides an outline on the administrative procedures that hospitals should follow when obtaining authorization for post stabilization care and/or elective procedures. Insurers also have copies of their policies that can be obtained through the provider’s online access. That said, for contracts that do not preclude retrospective reviews, those insurers should not deny a claim for lack of authorization.

Q: If we were to look at your main account inquiry, will we be able to tell at first glance if a Medi-Cal claim was paid?

A: It sounds simple enough – the hospital account inquiry is supposed to show all payments posted to a particular account. In a hypothetical case, if a patient stays in the hospital three days and he or she has exhausted Medi-Care part A benefits, Medi-Care part B is billed and because the patient is Medi-Cal eligible a TAR is obtained and the claim gets billed and paid. The account inquiry should show a part A denial (or, a note is entered that a Common Working File was run showing the patient exhausted part A benefits), part B payment, and then Medi-Cal payment for three days.

Things get complicated when a patient stays in the hospital long enough to start exhausting benefits from the various payors. The tracking of the several interim claims, self-paid payments for, e.g., share of cost or deductibles very quickly may become a challenge. The moment you start seeing notes from your billers they billed a claim but they don’t enter which portion of the extended stay they billed and then the poster starts posting without indicating which portion of the date of service paid, you are in trouble. We have seen it all too often that billers confuse themselves – they forget what portion of the stay they just billed and start submitting claims with overlapping dates of service, denials for duplicate start coming in, and again, are not separately tracked which creates a risk of missing appeal deadlines. It is easier to prevent the confusion before it happens than spend precious time unraveling the conundrum created by incomplete notes and account inquiries that do not tell the story of what happened.

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