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Clean Claims

What is a clean claim?
A “clean claim” means a claim that does all of the following:
(i) Identifies the health professional, health facility, home health care provider, or durable medical equipment provider that provided service sufficiently to verify, if necessary, affiliation status and includes any identifying numbers.
(ii) Sufficiently identifies the patient and health plan subscriber.
(iii) Lists the date and place of service.
(iv) Is a claim for covered services for an eligible individual.
(v) If necessary, substantiates the medical necessity and appropriateness of the service provided.
(vi) If prior authorization is required for certain patient services, contains information sufficient to establish that prior authorization was obtained.
(vii) Identifies the service rendered using a generally accepted system of procedure or service coding.
(viii) Includes additional documentation based upon services rendered as reasonably required by the health plan.

How many days does a health plan have to pay a clean claim?
A clean claim must be paid within 45 days after receipt of the claim by the “health plan.”

A health plan must notify the health professional, health facility, home health care provider, or durable medical equipment provider within 30 days after receipt of the claim by the health plan of all known reasons that prevent the claim from being a clean claim.

A health professional, health facility, home health care provider, and durable medical equipment provider have 45 days, and any additional time the health plan permits, after receipt of a notice to correct all known defects. The 45-day time period is tolled from the date of receipt of a notice to a health professional, health facility, home health care provider, or durable medical equipment provider to the date of the health plan’s receipt of a response from the health professional, health facility, home health care provider, or durable medical equipment provider.

If a health professional’s, health facility’s, home health care provider’s, or durable medical equipment provider’s response makes the claim a clean claim, the health plan shall pay the health professional, health facility, home health care provider, or durable medical equipment provider within the 45-day time period, excluding any time period tolled.

If a health professional’s, health facility’s, home health care provider’s, or durable medical equipment provider’s response does not make the claim a clean claim, the health plan shall notify the health professional, health facility, home health care provider, or durable medical equipment provider of an adverse claim determination and of the reasons for the adverse claim determination within the 45-day time period.

A health professional, health facility, home health care provider, or durable medical equipment provider shall not resubmit the same claim to the health plan unless the 45 day time frame has passed.

What are the penalties for a late payment?
A clean claim that is not paid within 45 days shall bear simple interest at a rate of 12% per annum. The Commissioner may also impose a civil fine of not more than $1,000.00 for each violation not to exceed $10,000.00 in the aggregate for multiple violations.
A health care corporation (Blue Cross Blue Shield of Michigan) is subject only to the civil penalties listed above and penalties listed in Section 402 of the Nonprofit Health Care Corporation Reform Act, 1980 PA 350, MCL 550.1402.

Who can file a clean claim complaint with the Office of Financial and Insurance Regulation?
A “health facility”, a “health professional”, a home health care provider, and a durable medical equipment provider can file a clean claim complaint.

Can an individual or policyholder file a clean claim complaint?
No.

What is a definition of a health plan?
Health plan means all of the following:
(i) An insurer providing benefits under an expense-incurred hospital, medical, surgical, vision, or dental policy or certificate, including any policy or certificate that provides coverage for specific diseases or accidents only, or any hospital indemnity, Medicare supplement, long-term care, or 1-time limited duration policy or certificate, but not to payments made to an administrative services only or cost-plus arrangement.
(ii) A MEWA regulated under Chapter 70 that provides hospital, medical, surgical, vision, dental, and sick care benefits.
(iii) A health maintenance organization licensed or issued a certificate of authority in this state.
(iv) A health care corporation for benefits provided under a certificate issued under the Nonprofit Health Care Corporation Reform Act, 1980 PA 350, MCL 550.1101 to 550.1704, but not to payments made pursuant to an administrative services only or cost-plus arrangement.

What is the definition of a health facility?
Health facility means a health facility or agency licensed under Article 17 of the Public Health Code, 1978 PA 368, MCL 333.20101 to 333.22260.

What is the definition of a health professional?
Health professional means a health professional licensed or registered under Article 15 of the Public Health Code, 1978 PA 368, MCL 333.16101 to 333.18838.

What types of claims are excluded?
The provisions of Section 2006 of the Insurance Code do not apply to claims arising from pharmacies, claims arising out of Sections 3101 to 3177 of the Insurance Code (No Fault Auto claims), an entity regulated under the Worker’s Disability Compensation Act of 1969, 1969 PA 317, MCL 418.101 to 418.941, the processing and paying of Medicaid claims that are covered under Section 111i of the Social Welfare Act, 1939 PA 280, MCL 400.111i.

Where is the clean claim language found in statute?
Subsection 6 of Section 2006 of the Insurance Code. MCL 500.2006
http://www.legislature.mi.gov/mileg.asp?page=getObject&objName=mcl-500-2006

Section 403 of the Nonprofit Health Care Corporation Reform Act, MCL 550.1403
http://www.legislature.mi.gov/mileg.asp?page=getObject&objName=mcl-550-1403

What happens if a health plan fails to timely pay a clean claim?
A health professional, health facility, home health care provider, durable medical equipment provider, or health plan alleging that a timely processing or payment procedure has been violated may file a complaint with the Commissioner on Form FIS 0284 and has a right to a determination of the matter by the Commissioner or his or her designee.

A health professional, health facility, home health care provider, durable medical equipment provider, or health plan may also seek court action.

Is there a require form?
Yes. FIS 0284, Clean Claim Report, must be filed with the Office of Financial and Insurance Regulation for each claim that a health plan has not timely paid.
http://www.michigan.gov/documents/cis_ofis_fis_0284_50170_7.pdf

Is there a time-period for submitting a claim to a health plan?
Yes. A health professional, health facility, home health care provider, or durable medical equipment provider shall bill a health plan within 1 year after the date of service or the date of discharge from the health facility in order for a claim to be a clean claim.

Does the clean claim language require electronic submission of claims or notices to and from a health plan?
No. The initial submission of the claims and all other notices required may be made in writing or electronically.

Can a health plan deny an entire claim if one or more services are payable, but one or more services are defective or non-payable?
No. If a health plan determines that 1 or more services listed on a claim are payable, the health plan shall pay for those services and shall not deny the entire claim because 1 or more other services listed on the claim are defective.

Section 2006 of the Insurance Code does not apply if a health plan and health professional, health facility, home health care provider, or durable medical equipment provider have an overriding contractual reimbursement arrangement.

Can a health plan discriminate against a health professional, health facility, home health care provider, or durable medical equipment provider for filing a clean claim report?
No. A health plan shall not terminate the affiliation status or the participation of a health professional, health facility, home health care provider, or durable medical equipment provider with a health maintenance organization provider panel or otherwise discriminate against a health professional, health facility, home health care provider, or durable medical equipment provider because the health professional, health facility, home health care provider, or durable medical equipment provider claims that a health plan has violated Section 2006(7) to (10) of the Insurance Code.

Does the information on clean claims apply to Medicaid HMO providers?
Not entirely. For example, clean claims for a Medicaid HMO provider have a separate form, FIS 278. Clean claims for Medicaid HMO providers is discussed in Chapter 4 under HMO’s

Disability Income Insurance

What is Disability Income Insurance?
Disability income policies are designed to pay you and cover your continuing living expenses during a period of disability. The benefits are specific and paid on a periodic basis. There are two types of disability income policies offered in Michigan: Short Term Disability Income and Long Term Disability Income. Some companies may offer both Short Term and Long Term benefits under one policy. Short Term Disability Income policies only provide disability benefits for a short period of time, i.e. 180 days. Long Term Disability Income policies are intended for longer periods of disability.

What is the definition of disability?
There is no statutory definition of disability, but most policies will define disability as a sickness or injury not excluded under the terms of the contract. During a period of disability, the insured must be under the regular care of a licensed physician.

What is the difference between “Own Occupation” and “Any Occupation”?
Own occupation means you are unable to perform the important duties of your regular occupation. Any occupation means you are unable to perform any gainful occupation for which you are reasonably suited by training, education or experience. Many policies are sold with a combination of the Own Occupation and Any Occupation definition. For example: during the first two years you are considered disabled if you are unable to perform the important duties of your regular occupation. If, after the first two years of disability, you cannot perform the duties of any gainful occupation for which you are reasonably suited, then you will be considered totally disabled.

What is a Waiver of Premium?
Most disability policies issued today will include a waiver of premium provision whereby the insurance company will waive premiums during a period of total disability. The insured may be required to remain totally disabled for a stated period of time before this provision will take effect (i.e. a waiting period of 90 days.) Some waiver of premium provisions will also include a provision for the return of premium paid during the waiting period.

What is an Elimination Period?
An Elimination Period is that period of time the insured must remain totally disabled in order to be eligible for a disability income benefit. It is much like a deductible that has to be met under a health insurance policy. Most insurance companies offer Elimination Periods ranging from 7 days up to 365 days and benefits are not payable until this period of time has been satisfied and the insured remains totally disabled.

Can my Disability Income benefits be reduced by other wages or income?
Yes. Most disability income policies will provide for an offset for any state or federal benefits you are eligible to receive during your period of disability. Some policies may also provide for an offset for Wage Loss benefits under a Michigan No-Fault Automobile policy. It is wise to review your policy thoroughly to be familiar with the Other Types of Income your insurance company may consider when offsetting your monthly disability income benefit. Also keep in mind that a retroactive benefit you receive from other sources of income may create an overpayment in Disability Income benefits. The insurance company may ask you to repay any Disability Income benefits that have been overpaid.

For example: John Doe became totally disabled in August 2003 and began receiving Disability Income benefits on a monthly basis from ABC Insurance Company. In June 2004, John Doe was awarded Social Security Disability Income benefits retroactive to the start of his disability in August 2003. John Doe then receives a lump sum payment from Social Security for benefits going back to August 2003. Even though the award was not paid until June 2004, ABC Insurance Company will offset John Doe’s disability income benefit by the Social Security Disability award going back to August 2003. This effectively creates an overpayment of disability income benefits by ABC Insurance Company. ABC Insurance Company would be allowed to recover any overpayment from John Doe.

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