Proposed Rule: Payment Resolution Policy for Medicaid Recipients

On November 28, 2016, the Illinois Department of Healthcare and Family Services (HFS) issued a proposed rule to assist in resolving payment denials related to inaccurate (or updated) enrollment information for Medicaid recipients. In summary, the proposed rule states that providers may receive payment from the “responsible” entity (HFS or Managed Care Organization (MCO)) when a payment is originally denied due to inaccurate benefit information reported on the dates of service billed as long as the provider meets the following requirements:

• The provider must show proof to the responsible entity that a prior authorization was approved by the previous entity identified in the eligibility verification for the dates of services in question.
• If the there are no prior authorization requirements for the services being provided, then the provider must retain proof that no authorization was needed by the previous entity to provide the services that are being billed to the responsible entity.
• The provider must retain a copy of the claim denial from the previous entity and provide a copy of the denial to the responsible entity.
• The responsible entity must be billed within the appropriate timely filing requirements, which begins on the date the remittance advice informs the provider that the claim is denied or rejected.

Payment from the responsible entity with be the fee-for-service rate in effect on the date of service, or when applicable the payer’s contracted rate.

Should this rule go into effect, providers will need to be diligent in verifying benefits appropriately utilizing the Medical Electronic Data Interchange (MEDI) or another state approved eligibility vendor on an ongoing basis and retaining these records to support the date it was run and the identified payer for the dates of service that are rendered.

Individuals who wish to comment on the proposed payment resolution policy may do so by submitting written comments by January 13, 2017 to:

Mollie K. Zito, General Counsel
Illinois Department of Healthcare and Family Services
201 South Grand Avenue East, 3rd Floor
Springfield, IL 62763-0002
Email: [email protected]

If you have any questions regarding the proposed rule or Illinois’ Medicaid enrollment or eligibility guidelines, please contact your Marcum LLP advisor at 847-282-6300.