Getting Around the Clean Claims Cop-out: Appealing Claim Deficiency Denials

Are your payers getting around prompt payment requirements using the clean claim cop-out? Although prompt payment is not tightly regulated on state and federal levels, many carriers avoid prompt payment by requiring claim detail above and beyond the standard identifying information.

Particularly troublesome are carriers that drop “unclean claims” from their system without any notification to the provider of a claim deficiency. Such tactics can result in timely filing denials and large write-offs.

When reviewing clean claim rejections, keep in mind that most claims involving group health will fall under ERISA jurisdiction. ERISA does not allow carriers to avoid rendering an initial benefit determination based on claim deficiencies. Instead, carriers must follow strict time frames for providing initial benefit determinations by issuing notification within 30 days. A one-time extension for requesting information is allowed as long as proper notification is sent. However, the initial benefit determination must be issued in accordance with Title 29 of the United States Code of Federal Regulations, Section 2560.503-1(f)(4), “Calculating time periods,” which states the following:

For purposes of paragraph (f) of this section, the period of time within which a benefit determination is required to be made shall begin at the time a claim is filed in accordance with the reasonable procedures of a plan, without regard to whether all the information necessary to make a benefit determination accompanies the filing. In the event that a period of time is extended as permitted pursuant to paragraph (f)(2)(iii) or (f)(3) of this section due to a claimant’s failure to submit information necessary to decide a claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is set to the claimant until the date on which the claimant responds to the request for additional information.

Further, managed care contract terms which do not comply with the ERISA Claims Procedure Regulation are likely unenforceable. Therefore, this regulation should be cited in situations where ERISA claims are pended for more than 30 days with no notification or extension request. Even if a request for information is unanswered, the carrier is required to move forward with an initial determination within 45 days of receipt of the claim.

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