Relates to claims for payment furnished by providers under the medical assistance program

Section 2 provides for an immediate effective date with retroactive effect for all medical assistance dates of service on or after October 1, 2014 so that the law applies to claims currently in dispute that were delayed by unforeseeable systems malfunction.

Existing law

The Department of Health regulates billing and claim submission requirements for providers in the medical assistance program (Medicaid) under. 18 NYCRR 540.6. These requirements do not exist in statute. DOH relies on statutory authority from various sections of the social services law related to payment under the Medicaid program, including section 367-b.

The regulation at 540.6(a)(1) requires that provider claims for payment of medical care, services, or supplies must be initially submitted within 90 days of the date the medical care, services or supplies were furnished to be valid and enforceable, unless the provider's submission of the claim is delayed beyond 90 days due to "circumstances outside of the control of the provider". The regulation currently provides that this term includes, but is not limited to, "attempts to recover from a third-party insurer, legal proceedings against a responsible third-party or the recipient of the medical care, services or supplies, or delays in the determination of client eligibility by the social services district." The Department of Health maintains a list of permissible delay excuses. However, this list does not include delays caused by unforeseen technical or electronic errors, and despite the open-ended language of the regulation, the Department will not approve delays that may have been due to circumstances outside of the control of the provider that are not on its list of acceptable delays. These acceptable delays are: (1) proof of eligibility unknown or unavailable; (2) litigation; (3) authorization delays; (4) delay in certifying provider; (5) delay in supplying bill forms; (6) delay in delivery of custom-made appliances; (7) third party processing delay (only for claims submitted to Medicare); (8) delay in eligibility determination; (9) original claim rejected or denied due to a reason unrelated to the billing limitation rules; (10) administrative delay in the prior approval process; (11) "other"- (a)adjustment/recoupment of paid claim, (b) audit directed replacement of a voided claim, (c) provider initiated replacement of a

voided claim, (d) interrupted maternity care, and (e) IPRO denial/reversal; and (15) natural disaster.

If a provider's delay is due to reasons other than these delay excuses, the provider will not receive reimbursement for their services.

Justification

This bill would correct an injustice and ensure that providers who provide services to our State's poor and elderly under the Medicaid program are not denied payment because they were unable to submit payments due to technical systems malfunctions that occurred outside of their control. State and Federal health care policy initiatives continue to place significant emphasis on the adoption of electronic and technical systems to improve the quality of health care and the patient experience. Providers have been mandated to incorporate electronic prescribing systems, connect to regional health information organizations (RHIOs), and incorporate electronic health records and billing processes into their day-to-day operations to reduce fraud, waste and abuse, increase efficiency, and augment data collection and reporting. The need for these capabilities has progressed from best practice to industry necessity. In most instances, providers now require electronic systems to bill the State and Medicaid managed care plans, and the success of the DSRIP and managed care depend on providers being able to develop electronic capabilities to function in the modern landscape.

Yet, for all of the emphasis being placed on adopting electronic systems, State Medicaid regulations afford no leeway for late payments that are due to technical malfunctions outside of the provider's control. These often arise when new technologies are first implemented, and can be particularly problematic as errors may not be discovered until after the 90 day submission deadline has elapsed. Because the Department. has elected to interpret the Medicaid billing regulation narrowly, and only allows delayed claim submissions for certain specific excuses, valid claims are being denied despite the fact that the delay was not the fault of the provider, leaving providers on the hook for significant losses. This is both patently unfair and deleterious to the State's long term health care goals, and for providers without the cash flow to sustain weeks or months of lost late payment, this can be disastrous.

Medicaid providers should not have to lose out on months of payment because of a systems malfunction they could not have prevented. This bill would prevent this injustice from occurring and ensure Medicaid providers are not unfairly penalized for technical systems errors that were due to circumstances beyond their control.

Prior legislative history

Passed Senate in 2015

Fiscal implications

None.

Effective date

This act shall take effect immediately and shall apply to all provider claims that accrued on or after January 1 2017.