ORDERS:
FINAL ORDER
In
the above-captioned matter, Ambu-Star appeals the South Carolina Department of
Health and Human Services’ (Department or HHS) determination refusing payment
on several claims.
PROCEDURAL POSTURE & FACTS
Ambu-Star
submitted 647 claims totaling $75,514 for ambulance services rendered from July
14, 2005, through February 7, 2006. However, Ambu-Star incorrectly submitted the
provider number as ABO222, rather than AB0222. That is, the provider number
contained an “O” rather than a numeric zero. Electronic Data Interchange (EDI),
which processes Medicaid claims for the Department, verified acceptance for
processing by a Form 997. Usually, errors or deficiencies in the claims will
generate an Edit Correction Form (ECF). However, because of the nature of the
provider error, the claims sat in electronic limbo, neither being paid nor
being kicked out for correction. Ambu-Star resubmitted the forms
electronically four times at HHS’ recommendation. It was only when a person at
EDI manually reviewed the claims in response to Ambu-Star’s queries as to why
the claims had not been paid that she identified the typographical error. Ambu-Star
then resubmitted the claims with the correct provider number, but it was well
beyond the one-year deadline. The hearing officer affirmed the Department’s
refusal of payment on the ground that it is the provider’s responsibility to
timely insure claims are “clean” to be processed.
DISCUSSION
Ambu-Star
argues that payment should be authorized because its claims were submitted
within a reasonable time, usually within a week of when services were rendered,
and it initiated follow-up in a timely manner in part because it never received
ECFs. In support of its argument that its claims should be considered as
timely filed, Ambu-Star relies on the testimony of Shirley Carrington of HHS that
providers have a year to fix what’s wrong on the edit correction sheet.
Ambu-Star argues that it had one year from the time the ECF was issued in
January 2007 to resubmit or to contact HHS to find out why claims remained
unpaid. It is undisputed that Ambu-Star contacted HHS within one year of the
initial filing to figure out why the claims were not being paid. However,
Ambu-Star points to no legal authority and makes no legal argument to support
its theory that the claims should be paid. Rather, federal regulations are
clear that HHS properly denied payment of the claims as untimely because the
claims submitted were not “clean”.
Only
clean claims can be processed.
Clean claim means a
claim that has no defect or impropriety (including any lack of required
substantiating documentation) or particular circumstance requiring special
treatment that prevents timely payment from being made on the claim under title
XVIII within the time periods specified in sections 1816(c) and 1842(c) of the
Act.
42 C.F.R. §
405.902 (eff. May 1, 2005). Under “Timely claims payment,” the regulations
clarify:
Clean claim means
one that can be processed without obtaining additional information from the
provider of the service or from a third party. It includes a claim with errors
originating in a State’s claims system.
42 C.F.R. §
447.45(b). Here, the claim could not be processed because additional
information in the form of the correct provider number was needed from the
provider of the service. Ambu-Star does not dispute that the claim was not
“clean”. While Ambu-Star correctly argues that there is no applicable Medicaid
Provider manual for Ambulances because the prior version is undergoing
revision, other provider manuals are instructive and closely track the federal
regulations. The Home Health Services Provider Manual at 1-22 provides:
In accordance with
federal and state laws and regulations, it is required that only “clean” claims
and related ECF’s received and entered into the claims processing system within
one year from the date of service (or date of discharge for hospital claims) be
considered for payment. A “clean” claim is error-free and can be processed
without obtaining additional information from the provider or from another
third party. This time limit will not be extended on the basis of third-party
liability requirements.
In a similar
vein, the Physician’s Provider Manual states: “It is the provider’s
responsibility to follow up on all claims in a timely manner to ensure that all
claims and ECF’s are filed and corrected within Medicaid policy limits.”
By
federal regulation, HHS “must require providers to submit all claims no later
than 12 months from the date of service.” 42 C.F.R. § 447.45(d)(1). If the
claim is untimely submitted, it cannot be paid. This is not only for the
benefit of providers to ensure prompt payment by the agency but also for the
benefit of the agency and the federal Medicaid funding that HHS in turn relies
on to ensure that old claims will not create an administrative backlog.
Further, items (3) and (4) of 42 C.F.R. § 447.45 (d) require the following:
The agency must pay
99 percent of all clean claims from practitioners, who are in individual or
group practice or who practice in shared health facilities, within 90 days of
the date of receipt.
The agency must pay
all other claims within 12 months of the date of receipt, except in [limited]
circumstances. . . .
42 C.F.R. §
447.45(d)(3) & (4). That section goes on to provide that the federal
Medicaid Administrator may waive the time limits of subsection (3), although
not of subsection (4), upon showing of a high volume of unclean claims and due
diligence to process them. Thus, the one-year time limit for payment is not
waivable. HHS’ failure to comply with the one-year deadline for payment of
claims would be serious, as it would jeopardize the state’s federal Medicaid
funding.
This
court’s research disclosed only one case on point, which was not officially
reported, indicating the law is well settled in this area that agencies may not
pay claims outside the one-year deadline. In St. Therese Medical Center v.
Illinois, the court held that a provider’s clean claim able to be processed
must be received no later than twelve months from the date services were
provided to be eligible for payment, whether it be an initial or resubmitted
claim following prior rejection. 45 Ill. Ct. Cl. 370, 1992 WL 121477753 (Ill.
Ct. Cl. 1992). “Respondent risks its entitlement to Federal Medicaid funding .
. . if compliance with this one-year deadline is not routinely enforced.” Id. at 2. “Accordingly, this Court has consistently determined that a
vendor-claimant’s claim does not merit an award, if the vendor has failed to
submit a ‘clean claim’ invoice. . . . within one year following the date on
which the charged services were rendered.” Id. at 2.
It
is clearly the provider’s duty pursuant to federal regulations to ensure clean
claims are submitted within twelve months of the date of service, regardless of
whether the usual ECF issued. Ambu-Star does not dispute that the clean claims
were resubmitted over one year from the dates of service. Thus, HHS properly
denied payment.
ORDER
IT
IS THEREFORE ORDERED that the Department’s decision is affirmed.
AND
IT IS SO ORDERED.
______________________________
April 15, 2008 JOHN
D. GEATHERS
Columbia, South
Carolina Administrative Law Judge
1205
Pendleton Street, Suite 224
Columbia,
South Carolina 29201-3731
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