Paperwork Requirements Affecting Physician Participation in Medicaid

You asked us to identify paperwork and other administrative requirements that may affect physicians' participation in the Medicaid program.

Low reimbursement rates are considered the principal reason why physicians do not participate in or drop out of Medicaid. Some physicians also identify administrative factors such as credentialing, prior authorization requirements, and claims processing in their decision. In Connecticut, Medicaid services are provided both through fee-for-service arrangements and managed care organizations (MCOs). Many physicians' complaints about Medicaid mirror their complaints about their dealings with MCOs in the private insurance market.

The Department of Social Services (DSS) is the state's Medicaid administrator. DSS contracts with Electronic Data Systems (EDS) to act as its fiscal agent for the fee-for-service portion of the program, enroll providers, and operate an automated client eligibility verification system. EDS has created telecommunications and computer-based systems designed to increase the speed with which physicians can access and submit information about clients and claims. These include:

1. a client verification system that allows providers to obtain information on payment cycles, diagnosis and procedure codes, coverage and restrictions, and claims status;

2. electronic point-of-sale card swipe devices that allow physicians to submit patient information;

3. electronic claims submission software;

4. a telephone help-line;

5. a website where physicians can access DSS' provider manual and other Medicaid information; and

6. a newsletter.

A health policy analyst at the National Conference of State Legislatures (NCSL) stated that Connecticut was a leader in streamlining physicians' Medicaid paperwork. She cited Arkansas' seven-day payment guarantee for physicians who submit electronic claims as a new approach. Others include Texas' common credentialing form and in several states' use of a common procedure code for dentists.

Medicaid is a federal-state health insurance program. The Centers for Medicare and Medicaid Services (CMS) sets broad program guidelines. Within those guidelines, each state establishes its specific program plan and operates it on a day-to-day basis. CMS monitors the states for compliance with federal guidelines and their program plans.

State Medicaid agencies (DSS in Connecticut) are responsible for administering the program on a day-to-day basis. In terms of its relationship to health care providers, the state Medicaid agency, like any other health insurer, must

1. determine what benefits it will cover in which settings;

2. determine how much it will pay for covered benefits and whether it will buy those services from fee-for-service providers and/or MCOs;

3. establish standards for the providers and MCOs from which it will purchase covered benefits and enroll (or contract with) those which meet the standards;

4. process and pay claims from fee-for-service providers and make capitation payments to MCOs;

5. monitor the quality of the services it purchases to ensure that beneficiaries are protected from, and that taxpayers are not subsidizing, substandard care;

6. ensure that state and federal funds are not spent improperly or diverted by fraudulent providers;

7. have a grievances process for applicants, beneficiaries, and providers; and

8. collect and report information necessary for effective administration and program accountability.

Connecticut provides Medicaid services through traditional fee-for-service arrangements and through contracts with MCOs. Most people who receive care through fee-for-service providers are in the “medically needy” category, which is composed mainly of seniors and people with disabilities. Adults and children who are “categorically needy,” that is families receiving and transitioning off of Temporary Family Assistance and other children and adults in the HUSKY A program, receive care through an MCO. DSS currently contracts with four MCOs (Anthem Blue Care, Health Net/Healthy Option, Community Health Network of Connecticut, and Preferred One). The first two MCOs also operate in the private commercial market; the latter two are almost exclusively Medicaid-oriented.

DSS contracts with Electronic Data Systems to act as its fiscal agent for Medicaid transactions. Most of its activities involve claim processing, financial refunds and recoupments, and provider relations for fee-for-service providers. It also handles enrollment for Medicaid managed care providers. EDS operates an automated eligibility verification system that allows providers to access the most current client eligibility information.

Nationally and in Connecticut, physicians' complaints about Medicaid focus on the Medicaid agency's role as an insurer, particularly when it works through MCOs. Ken Ferrucci, director of government relations for the Connecticut State Medical Society, agreed that his members' complaints about Medicaid revolve around the same issues as their complaints about MCOs, particularly:

1. credentialing (the process for determining whether a provider meets the standards for participating in the program),

2. prior authorization (obtaining permission to refer a patient to another provider or prescribe a particular medication), and

3. claims processing.

Mariette McCourt, staff person for the legislature's Medicaid Managed Care Council, amplified these concerns, noting specific problems in:

1. tracking claims and obtaining an explanation of benefits, that is, why a claim was denied;

2. the amount of time providers and their staff spend contacting an MCO for specialty services (a particular problem for behavioral health practitioners) and in keeping current with changes in an MCO's provider panel (the providers that participate in its plan); and

3. keeping track of MCOs' drug formularies (the list of drugs physicians can prescribe without prior authorization).

She agreed with Ferrucci that these complaints were not specific to Medicaid but reflected physicians' relationships to MCOs, generally.

Beyond Connecticut, the literature indicates other problem areas. Dentists have a particularly low rate of Medicaid participation. It is mainly ascribed to the combination of low reimbursement rates and high practice costs, particularly the high cost of equipment. But they also complain about administrative complexity, prior authorization requirements even for routine services, and slow payment.

Dentists also have a particular problem with Medicaid patient “no-shows. ” Many Medicaid patients are used to receiving medical care in a clinic where they do not need to schedule an appointment. And because of their personal circumstances, people on Medicaid often experience day care and transportation difficulties that prevent them from making scheduled appointments. In addition, many patients place dental hygiene and preventive dental care low on their list of priorities. Consequently, when they visit a dentist, it is for a serious problem. Missed appointments waste valuable time for dentists and result in lost revenue that cannot be replaced. Unlike family or general practice physicians, a great deal of care dentists provide Medicaid patients is surgical or rehabilitative, so they cannot simply fill the missed appointment with the next patient in the waiting room (National Conference of State Legislatures, Increasing Dentists Participation in Medicaid and SCHIP, 2001).

Laura Tobler, a health services program manager with the National Conference of State Legislatures, stated that Connecticut is among the nation's leaders in implementing administrative efficiencies in its Medicaid program. Among the efficiencies she cited are (1) enabling doctors to determine eligibility when a patient is in their offices, which assures them that they are eligible for payment before providing services; (2) removing requirements for doctors to collect additional information on Medicaid patients; (3) making information available on-line; and (4) providing a telephone hotline to answer doctors' questions.

DSS and EDS have taken several steps to address administrative problems that concern physicians, particularly those caring for fee-for-service Medicaid patients. These primarily involve increasing electronic communications and transactions.

DSS and EDS provide an automated eligibility verification system (AEVS) that allows physicians to obtain immediate responses on client eligibility, program restrictions, and private insurance information. Physicians most frequently access AEVS through the automated voice response system, a telephone tree that, in addition to client eligibility, allows them to obtain information about (1) payment cycles, (2) procedure code coverage and restrictions, (3) diagnosis codes, and (4) claims status. EDS also gives physicians the option of obtaining this information electronically through an OMNI point-of-sale device in their offices. This device is essentially like a credit card swipe machine. Providers with such a device can swipe a patient's plastic identification card or submit patient information using the device's keypad.

EDS provides physicians with software that permits them to submit electronically claims and patient eligibility requests, the latter singly or in batches.

EDS operates a provider assistance center that physicians can call for answers to their questions about client and provider eligibility, claim submission procedures, prior authorization, claims processing issues,

and provider enrollment. The number for Hartford-New Britain area physicians to call is 860-832-9259. All other in-state providers can dial 1-800-842-8440.

In 2001, EDS began a website, Connecticut Medical Assistance Program (http: //www. ctmedicalprogram. com/) where providers can access the DSS Medicaid Provider Manual and updates, fee schedules, claims forms, and codes to explain why a claim was denied. It also allows them to locate fee-for-service providers for referrals.

The website also contains newsletters about all state medical assistance programs. The newsletters indicate some of the paperwork changes that EDS has initiated to ease physicians' and other providers' burdens. Recent newsletters, for example,

● told providers that mailing claims to the correct “post box” speeds up processing and listed the boxes;

● informed them that EDS, by changing a claims form, could scan the information into a computer, thus speeding up the claims process, which can result in faster payment (it also told them that submitting an old form or a photocopy of the new form would result in its being sent back); and

● reminded them to submit verification with claims and how best to do it.

Fragmentation in the mental health system is a particular problem for providers in this area, including psychiatrists and clinical psychologists. The state's new behavioral health partnership, which involves DSS and the departments of Children and Families and Mental Health and Addiction Services, may ease some of their complaints. One way the partnership might help providers is by contracting with a single administrative services organization (ASO) for all behavioral health services. The ASO will be the single point of contact for all authorizations, payments, data management, and reporting for Medicaid, HUSKY A and B, and State Administered General Assistance. The state agencies are responsible for clinical management.

EDS also runs workshops for providers to inform them of new rules and program changes. Its latest series of workshops deal with the administrative requirements of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing regulations. The workshops deal mainly with HIPAA requirements for electronic claims and payment transactions and confidentiality rules. DSS' implementation of HIPAA requirements should mitigate some paperwork by creating a single set of transaction codes. This means all providers will be able to use the same format to bill insurers.

Common Credentialing. In Texas, Senate Bill 544 in 2001 directed the Texas Department of Insurance (TDI) to develop and implement a standardized application for physician credentialing. TDI has made the new Texas Standardized Credentialing Application mandatory for all HMO, PPO, and hospital credentialing and recredentialing of physicians as of Aug. 1, 2002. The common credentialing applies to HMOs that serve Medicaid patients.

Guaranteeing Fast Payment. NCSL's Tobler reports that Arkansas has introduced a system in which the state guarantees providers payment within seven days if they submit claims electronically using the patient's magnetized Medicaid enrollment card. These cards contain digitized information about the patient. Tobler's information and the fact that EDS is Arkansas' fiscal agent, suggests the system is similar to the OMNI point-of-sale device EDS provides in Connecticut.

Using a Single Billing Code. Several states have adopted the American Dental Association (ADA) procedure code for dental transactions in all state medical assistance programs (e. g. , Medicaid, children's health insurance, and state-funded health insurance). This reduces provider confusion and benefit denials. Georgia, Illinois, Iowa, Michigan, Montana, and North Carolina have adopted this approach. Arizona, Georgia, Michigan, and Missouri also allow dentists to use the ADA claims form for all transactions.

The Human Services Committee is considering a proposed bill (SB 212) this year concerning Medicaid administrative burdens on dentists. The bill requires DSS to revise its Medicaid provider manual to enhance and expedite the delivery of dental services. The revision must include measures: (1) simplifying the application process for providers; (2) creating a one-page renewal form for providers whose practice information has not changed in the previous two years; (3) eliminating the charge for dentists who file paper claims, provided they meet threshold requirements for the number of patients they treat; and (4) eliminating prior authorization for basic and routine services specifically covered under Medicaid. Some of these proposals may be applicable to physicians.


February 3, 2003		2003-R-0028
PAPERWORK REQUIREMENTS AFFECTING PHYSICIAN PARTICIPATION IN MEDICAID

By: Saul Spigel, Chief Analyst