Institutional Manual

Administrative Functions

Timely Filing of Claims

To be considered for payment, claims must be submitted within 365 days after the services are rendered for emergency room or outpatient care, OR 365 days from the date of discharge for inpatient care. In no circumstance should a member be billed for failure of a provider to bill CareFirst BlueCross BlueShield (CareFirst) or CareFirst®' BlueChoice, Inc. (CareFirst BlueChoice)within the timely filing limits.

Reconsideration
Claims submitted beyond the timely filing limits generally are rejected as not meeting these guidelines. If your claim is rejected, but you have proof that the claim was submitted to CareFirst or CareFirst BlueChoice within the guidelines, you may request processing reconsideration.

Timely filing reconsideration requests must be received within six months of the provider receiving the original rejection notification on the provider voucher or notice of payment. Requests received after six months will not be accepted and the charges may not be billed to the member.

Documentation necessary to prove the claim was submitted within the timely filing guidelines

For electronic claims: A confirmation from the vendor or clearinghouse that CareFirst successfully accepted the claim. Error records are not acceptable documentation.

For paper claims: A screen print from the provider's software indicating the original bill creation date along with a duplicate of the clean claim or a duplicate of the originally submitted clean claim with the signature date in field twelve (12), indicating the original bill creation date.

Billing Ancillary Services for Maryland, Non-DRG Hospitals

Ancillary services must be billed according to the authorization notes. For instance, if the nurse reviewer indicates a denied day on the inpatient admission, our clinical team will review the medical necessity of the ancillary services rendered on the denied day. If it is determined that ancillary services were not medically necessary, a “deny ancillaries” comment will be added to the authorization. When this happens, the inpatient claim must indicate those denied charges in the non-covered column (Field 48) of the UB04 or corresponding electronic field.
This also applies to denied room and board charges during the inpatient stay. These charges must also be properly indicated in the non-covered column (Field 48) of the UB04 or corresponding electronic field.

If CareFirst or CareFirst BlueChoice receives a claim where denied services are not indicated, the claim will be returned and you will be asked for a new UB04 indicating covered and non-covered charges in the appropriate columns. We will no longer ask for an itemized bill and manually split the charges for you.

* For DRG facilities, this only applies if there is a high cost outlier and CareFirst is reviewing for medical necessity.

Ancillary services associated with hospital inpatient days are subject to review for medical necessity.
Please review the instructions below that explain how to submit claims with denied charges. Complete the following Field Locators when submitting claims for admissions with denied days. Follow these instructions when submitting both electronic and paper claims. If you submit claims electronically, contact your vendor to determine correct format for this data.

Statement Covers Period
Covered Days (Cov D)
(Paper Form Locator 39,40 or 41 and value code 80) Days of care authorized for coverage (do not include non-covered days).

Non-Covered Days (N-C D.)
(Paper Form Locator 39, 40 or 41 and value code 81) Days of care denied for coverage

Total Charges
(Paper Form Locator 47) Total charges pertaining to the related revenue code for the current billing periods as entered in the Statement Covers Period.

Non-Covered Charges
(Paper Form Locator 48) To reflect non-covered charges for the primary payer pertaining to the related revenue code.

Any claims with denied days that are not submitted in this format will be rejected for resubmission.

Please note, however, that these changes do not apply to the Federal Employees Program (FEP). Please do not use this billing method when submitting claims for FEP members.

Electronic Claim Filing

Following a download of the hospital's claims and transfer to your clearinghouse, the Claims Receipt Report should be routinely checked to ensure that all claims have been received by CareFirst. If a claim encounters an error situation, correct the error and resubmit through your clearinghouse. Please remember that claims appearing on the report with an error condition, do not create a record on the CareFirst system. Unless the error is corrected and the claim is resubmitted, it has never been truly filed and may result in a timely filing rejection at a later date. If you have a problem resolving an error, contact your clearinghouse (see Important Telephone Numbers). Your clearinghouse may instruct you to contact the Electronic Representative at CareFirst for further assistance.

If you cannot locate the claim on the receipt report, it must be resubmitted. Start from the point of initial electronic filing to locate the claim and any potential transmission problems.

If we received a claim, but have not completed final processing (payment/rejection/return), check CareFirst Direct (click here for more information) for the status. To identify the problem, call the Provider Service line (see Important Telephone Numbers). If the claim is not showing on the system, a Claims Receipt Report should be forwarded to our EDI Team (see Important Telephone numbers) to recreate the claim. Claims can only be recreated within 6 weeks of the original transmission.

Claims Receipt Reports should be filed and kept for any appropriate period of time for follow-up and research activities. CareFirst does not keep copies of these reports.

Electronic Claim Submission Guidelines

Special Claims Submission Information

Observation Services
Observations services are necessary to evaluate an outpatient's condition or to determine the need for admission as an inpatient. These services are provided on a hospital's premises and include bed use and periodic monitoring by hospital nurses or other staff. These services are covered only when provided under the order of a physician or another individual authorized by state licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests. Diagnoses appropriate for observation services may include, but are not limited to:

• Abdominal and pelvic pain, undiagnosed
• Asthma
• Chest pain, undiagnosed after study
• Dehydration
• Dizziness, undiagnosed
• Gastroenteritis
• Nausea and vomiting
• False labor

Guidelines
Observation should be billed as 1 unit per every 24 hours. Bill professional physician services separately. Observation services provided for uncomplicated outpatient surgical care is not covered. Outpatient obsetrical observation requires a faculty authorization for BlueChoice members; no other types of Outpatient observations require Precertification.

Mother and Baby Claims
CareFirst and CareFirst BlueChoice, Inc. require the submission of the mother's delivery and the baby's routine newborn charges as a single request for payment. The routine newborn charges will be processed under the mother's name. Should the baby require special care and stay in the hospital longer than the mother, a separate request for payment will be required for these charges and will be processed under the baby's name. A separate authorization for the baby's stay would be required if the baby stays longer than the mother. Include an itemization to differentiate routine vs. non-routine charges.

Payment of Routine Delivery Charges for Mother and Baby (applies to DRG facilities only)

Charges for mother and baby for routine deliveries are reimbursed as a combined payment under the mother's name. We use a “hybrid DRG to indicate that the mother’s and the baby’s charges will be paid together. While the Medicare DRG grouper lists DRG’s 370-375 as the routine delivery groupers, oru DRG payment screen on FLEXX will indicate 970-975 as a combined payment. The hybrid DRG grouper numbers correspond to the Medicare grouper numbers as follows:

• 970/370 - Cesarean Section with CC
• 971/371 - Cesarean Section without CC
• 972/372 - Vaginal Delivery with Complicating Diagnosis
• 973/373 - Vaginal Delivery without Complicating Diagnosis
• 974/374 - Vaginal Delivery with Sterilization and/or D&C
• 975/375 - Vaginal Delivery O.R. Procedure Except Steril and/or D&C

To Calculate the Routine Delivery Payment

The payment follows the standard DRG payment, i.e., DRG weight x base rate for type of coverage.

The baby’s payment for a routine delivery is a per diem payment based on DRG 391 NORMAL NEWBORN. Follow the formula listed for a per diem (reimbursement description “D6”) substituting the number of nursery days paid on the claim for revenue code 170/171 for APPROVED DAYS in the calculation.

Add the mother’s DRG payment to the total of the per diem payments for the child and this is the combined payment for a routine delivery.

In order for the hospital to receive a separate payment for the baby based on a “sick” DRG:

• the baby must stay in-hospital longer than the mother:
• the hospital must have the baby’s stay authorized:
• the hospital must file a separate claim for the baby; and
• the primary diagnosis for the claim for a sick baby cannot be V30X – V39X (liveborn infant) but must be the sick diagnosis resulting in the extended stay

Claims for FEP Members with Medicare Part B Only - OBRA '90

OBRA ’90 Processing apply to Federal retirees who are not enrolled in Medicare Part A. In these situations, Carefirst is primary for Part A charges while Medicare is primary for Part B charges. In most cases the Part B claims will cross over electronically to CareFirst.  The Federal Employee Program requires that all charges related to an episode of care are paid as one claim.   Using the following guidelines will assist in processing these types of claims correctly.

1. Submit Part B charges to Medicare.
2. Once Medicare has processed, submit ALL charges as an inpatient claim (Type of Bill XXX7 is helpful) with the Medicare B Summary Notices, to FEP.
3. Any Part B services that were originally processed/paid by FEP will be voided (retracted) and ALL charges will be processed/reprocessed on the inpatient claim.
4. For D.C. and Virginia facilities only, a DRG payment is made (Medicare Part B payment is deducted from the full DRG amount and CareFirst pays the difference).

Network Claims Product
CareFirst jointly administers with third party administrators (TPAs), self-insured employers, and health and welfare funds of the Network Claims product. This process enables employers to access the CareFirst provider networks, design health benefits and share financial responsibilities because CareFirst shares administrative responsibilities. CareFirst is actively involved and responsible for collecting claims, pricing professional claims, training and maintenance of the provider network.

Patient Information
Patients enrolled in this program can be identified in several ways:

• A unique identification card bears the CareFirst logo and the logo of the customer.
• The prefix on the identification card is alpha/numeric and the alpha character is an "A."
• The identification cards, EOBs, checks and vouchers may have CareFirst's and the account's logo.

Claims Submission
Submit claims either to CareFirst (paper or electronic) or directly to the group (paper only). Claims submitted to CareFirst will be forwarded to the group for processing. The patient's alpha/numeric prefix and the CareFirst provider number must be submitted on all claims to ensure timely processing.

To obtain information about benefits, claim status, claim adjudication, deductibles or coinsurance, call the group's number on the back of the patient's identification card. It is important to record the telephone numbers and addresses that appear on the back of the membership card for future reference.

Medicare Supplemental Products
CareFirst offers a variety of Medicare supplemental policies to compliment Medicare benefits through group contracts as well as directly to individual subscribers.

TEFRA
The Tax Equity and Fiscal Responsibility Act (TEFRA) is legislation enacted by the federal government that states that an active employee age 65 and over, or the spouse age 65 and over of an active employee, may enroll in the same group coverage offered to younger employees and their spouses (the Deficit Reduction Act is an amendment to TEFRA which stipulates that spouses fall under TEFRA). If the employee or spouse has elected the group coverage, CareFirst is the primary carrier and Medicare is the secondary carrier. After CareFirst has processed the claim, you must forward the claim to Medicare.

Requirements for Itemization
CareFirst BlueChoice, Inc. specifically requests itemization in the following cases to determine if services are covered under the member's plan:

• Supplies (Revenue Code 270)
• Implants (Revenue Code 278)
• Pharmacy charges if related to blood services (Revenue Code 250)
• Durable medical equipment
• Blood processing and storage charges (Revenue Code 390 and 391)
• Private room charges
• Educational training
• Non-covered inpatient days

Note: This itemization is not required if the charges are paid at a DRG or "per diem" rate inclusive of all services provided.

Screening Mammography
Routine Mammograms are a covered service under the benefit programs. To determine the frequency for which the service is covered (e.g., every other year, etc.) please contact Provider Services.

FEP Coordination of Benefits
In order to comply with FEP requirements, ask your FEP patients as a part of the admission process, to complete the Coordination of Benefits Form. The form should be sent to CareFirst or CareFirst BlueChoice, Inc., prior to the bill to ensure timely processing.

Notification of Denial
When CareFirst and/or CareFirst BlueChoice, Inc. denies the certification of an admission or continued stay certification, and the facility or physician disagree, the facility or physician may appeal the adverse decision. However, the facility or physician may not issue a denial notification to the member and will hold the member harmless.

Non-DRG Reimbursement Cases (MD only)
A facility may only issue a denial notification to a CareFirst or CareFirst BlueChoice, Inc. member if:

• The facility, the attending physician, and CareFirst and/or CareFirst BlueChoice, Inc. agree and document that it is not medically necessary for the member to remain in the facility;
• An appropriate discharge plan has been developed; and
• The member or family member refuses discharge. However, the hospital is strongly encouraged to discuss the case with the attending physician and the patient and/or a member of the patient's family, to ensure that the patient and/or family member understands their financial responsibility before the written denial is issued.

DRG Reimbursement Cases (NCA only)
Under no circumstances may a hospital deny a continued inpatient stay as not medically necessary, due to placement delays or problems in securing alternative financial support needed to move a patient to a lower level of care. The facility may only issue a denial notification for a CareFirst or CareFirst BlueChoice, Inc. member if:

• the facility, the attending physician, and CareFirst and/or CareFirst BlueChoice, Inc. agree, and document that it is not medically necessary for the member to remain in the facility;
• an appropriate discharge plan has been developed; and
• the member or family member refuses discharge. However, the hospital is strongly encouraged to discuss the case with the attending physician, the patient, and/or a member of the patient's family to ensure that the patient and/or family member understands their financial responsibility before the written denial is issued.

A copy of the issued denial letter must be forwarded to CareFirst and/or CareFirst BlueChoice, Inc.

CareFirst Direct

CareFirst Direct allows registered users to make free, unlimited eligibility, benefit and claims status inquiries for our Maryland, National Capital Area (NCA) and Delaware members. This includes Federal Employee Program (FEP) and National Account (NASCO) members. Users may also obtain out-of-area claims and eligibility information for members from other Blue Cross and Blue Shield Plans.

CareFirst Direct is available to participating institutional and professional providers. Click here to register for CareFirst Direct.

iEXCHANGE™

iEXCHANGE™, a free internet service that gives institutional providers a two-way link to exchange care management data and certification status with CareFirst and CareFirst BlueChoice allows hospital staff to easily submit authorization transactions to CareFirst and CareFirst BlueChoice plans, access patient eligibility and inquire about the transaction's status post-submission. iEXCHANGE™ applies automated business rules to enhance approval processing and supports HIPAA compliance with audit trails, security, unique identifiers and code sets. The system permits authorization access to all CareFirst and CareFirst BlueChoice plans for inpatient and some outpatient procedures.

CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc. allow facilities to submit outpatient surgeries and labor and delivery checks using the procedure code 99215 to CareFirst via iEXCHANGE™. Outpatient authorization requests must be entered by selecting "Other Request" on the menu bar.

You may check the status of an authorization up to fourteen days prior to the current date, submitted via iEXCHANGE™, phone or fax by viewing the Treatment Update Search screen. Treatment updates will automatically appear for the following status changes:

• Status change to authorize
• Status change to denied
• Status change to pend
• Added comments and information requests from CareFirst

The following situations should be viewed as it relates to Medicare to determine if an authorization should be submitted to CareFirst:

• If Medicare is primary, do not enter inpatient cases for CareFirst Indemnity products, FEP PPO or CareFirst National Accounts into iExchange.
• If Medicare is primary, but Medicare benefits have been exhausted, enter inpatient cases for CareFirst Indemnity products, FEP, PPO or CareFirst National Accounts into iExchange.
• If the patient's primary coverage is not clear, enter inpatient cases for CareFirst Indemnity products, FEP, PPO or CareFirst National Accounts into iExchange with a notation in the additional insurance information field.

To set up a training session, please contact your Institutional Provider Representative, click here to obtain their information. If you have any questions, please forward them to iexchange.partner@carefirst.com.

Remittance

Remittance Schedule
This schedule contains the majority of claim payments for CareFirst or CareFirst BlueChoice, Inc.'s members. The schedule is used for FEP members, BlueChoice, BlueChoice Opt-Out, as well as BlueChoice Opt-Out Plus members and members of other Blue Cross and Blue Shield Plans whose claims are paid locally.

The Weekly Remittance Cycle
Participating institutional providers that submit claims on the FLEXX and NASCO systems are reimbursed every Friday, unless that Friday is a holiday. Participating institutional providers that submit claims on the CARE system are reimbursed every Tuesday, unless that Tuesday is a holiday. Participating professional providers that submit claims on the CARE system are reimbursed every Thursday, unless that Thursday is a holiday.

Remember: Claims are not processed on a holiday, so remittances reflecting a holiday will be lower in total amount(s) paid than may be normally expected.

Providers are paid by one of two means:

1. Automatic Clearinghouse (ACH), a wire transfer into the provider's account. Funds from the transfer are available to the provider on the Monday following the Friday voucher.
2. The provider may receive a CareFirst or CareFirst BlueChoice, Inc. check. The provider also receives by courier or pre-arranged pick-up, a paper or tape remittance listing all payments for the specific voucher period, from which accounts may be posted. There are two instances in which the provider may not receive a check with the remittance schedule:
   a. Voucher deductions eliminate the amount due the provider.
   b. The check is withheld until information/funds requested are received.

The type of remittance received will indicate either the type of member's health benefit plan and/or the provider network in which the hospital participates.

Provider Identification Information
In the upper right corner of the remittance, the provider's three-digit participating number appears. This number may be followed by a three-digit numeric suffix that indicates the provider network under which the listed claims are being considered. These suffixes are:

• Blank = payment being made under a participating provider agreement
• 001 = payment being made under CareFirst's Preferred Provider Organization (PPO) Network
• 002-014 = payment being made according to the old Preferred Provider Organization (PPO) Network Agreement
• 015 = payment being made according to the Select Preferred Provider Plan (SPPP) Network
• 052-053 = payment being made according to a Preferred Provider Organization (PPO) Network Agreement
• CC1-CC2 = payment being made under the CareFirst BlueChoice, Inc. Network
• HMS1 = payment being made under Health Management Strategie's mental health provider network

Member/Claims Specific Information
At the top of the remittance notice is a horizontal bar with specific headings that relate to the information appearing in the column. Headings with asterisks are defined on the back of the remittance schedule.

Note the following:
Patient Days -The number indicated in this column provides the number of days approved and considered for this claim. If the claim is an interim bill for an extended admission, only the days considered for the interim bill will appear in the PATIENT DAYS column. If an admission is only partially approved, the claim may be split into two separate claims to indicate approved days that will be paid, non-approved days that will only be partially paid, or for which no payment will be made.

Type of Coverage Code -This field describes the member's coverage that were in effect at the time services were rendered. The values are:

• 3-digits the FEP enrollment code
• 2-digits the Non-FEP expanded service code
• B - host bank (this Plan is "hosting" another Plan's member)
• C - centrally certified account member
• Blank FEP Enrollment - denied claim

Benefit Code -The values are:

• Blank covered charges represent regular benefits
• 1 covered charges represent reduced benefits due to Medicare or other insurance

LOB (Line of Business Code) - The LOB under which benefits were provided. The values are:

• B - basic
• M - major medical
• F - Federal Employee Program

Remark Code -This code relates to a specific narrative explaining why a charge or a portion of a charge was non-allowed. These comments are listed in alphabetical and numerical order at the end of the remittance schedule. Narratives for remark codes such as 9998 and 9999, which apply to specific claims, will be listed with the member's identification number and the claim number to which the remark applies. Narratives for the Remark Codes can also be viewed by using CareFirst Direct, or by looking at each bill line. Specific Remark Codes can also be used to identify how the payment was calculated. For example, three numbers followed by a "G" (999G) indicates that a DRG payment was made and the number present indicates which DRG grouper number was used for the calculation.

Note: Remark Code "P250" indicates a "per diem" payment for that bill line.

Non-Allowed Charges -This column can contain combined charges that are both Non-Covered under the member's Health Benefit Plan, and charges that are Non-Allowed under the provider's Master Agreement with the CareFirst and CareFirst BlueChoice, Inc. It is essential when posting, to refer to the code indicated in the Remark Code column to identify which services are not-covered and may be billed to the member, and those services that are non-allowed and may not be billed to the member.

For example, Remark Code "2000" indicates a duplicate claim, and these charges cannot be billed to the member; however Remark Code "S301" indicates a non-covered service which may be billed to the member. If you are unsure about the member's payment liability, retrieve the information from CareFirst Direct. If you do not have the electronic capability to obtain this information, contact Provider Services to determine the member's payment responsibility (see Important Telephone Numbers).

Rate of Pay (ROP) -This column provides the ROP codes as defined below. The following codes may appear frequently on the remittance schedule:

• 1 - inpatient, non-maternity
• 4 - outpatient
• 8 - Medicare complementary
• A - inpatient, maternity
• M - inpatient, major medical, comprehensive
• N - outpatient, major medical, comprehensive
• Q - inpatient, major medical, non-comprehensive
• R - outpatient, non-comprehensive
• 7M - inpatient, major medical, comprehensive, COB
• 7N - outpatient, major medical, comprehensive, COB
• 7Q - outpatient, major medical, non-comprehensive, COB
• 7R - outpatient, major medical, non-comprehensive

Underneath the informational columns in the body of the remittance, is a further classification indicating the Health Benefit Plan for the listed members.When combined with the Network information, this will indicate how the payment was calculated. These designations will be one of the following:

CAREFIRST Traditional - benefits were considered under the indemnity benefit level of this Member's Health Benefit Plan.

BlueChoice - the member has only HMO coverage, and benefits were considered under the Provider Network indicated by the "par" number suffix.

Blue Choice Advantage - It is a PPO plan using HMO providers for in-network benefits. No referrals needed to participating specialist and no PCP needs to be selected.

BlueChoice Opt-Out Plus Open Access - member has a dual or triple option, point-of-service benefit plan and the benefits were considered under the Provider Network indicated by the "par" number suffix.

BlueChoice Opt-Out Open Access - member has a dual option, point-of-service benefit plan and the benefits were considered under the Provider Network indicated by the "par" number suffix.

Medicare crossover - the listed payments are for persons with Medicare and CareFirst's complimentary payment provided on the schedule is based on the Medicare payment information "crossed over" to CareFirst by tape from the Fiscal Intermediary.

The final column of the remittance schedule indicates the Amount Paid. By subtracting this amount from the Covered Charges field, the provider can determine the "write-off" amount. This holds true regardless if the payment is calculated by taking a percentage of the covered charges or calculated using a per diem or per case fee. In addition, charges "non-allowed" under the provider agreement (e.g., services not medically necessary, non-authorized services under CareFirst BlueChoice, Inc.,) are also written-off by the provider. Remember that the master agreement and the provider network appendices attached to your master agreement, specify that the member is to be "held harmless". This means that the member can only be billed for deductibles, copayments, coinsurance, and "non-covered service," if applicable. Non-covered services are those services specifically excluded under the member's health benefit plan.

Each provider network portion of the remittance schedule is summarized providing a breakdown of covered charges and an accumulation of the paid amounts for that rate of pay.

Considered charges - will be the total amount billed minus any non-allowed charges. The calculation for determining the Member's coinsurance will be changed to subtract the provider discount from the considered charges.

The amount in the covered charges will equal the amount paid (net amount) plus the discount amount.

The figure in the amount paid column will still represent the net payment amount. You can calculate the provider discount by subtracting the amount paid from covered charges. The member is not to be billed for this amount.

NASCO Reimbursement
The National Account System Company (NASCO) is a BlueCross BlueShield Plan-wide system which administers enrollment and processes claims for national account groups which may have their members located at various geographic locations. One Plan acts as the "control plan", by negotiating benefits with the group. Other Plans "participate" by administering these negotiated benefits and processing claims for National Account group members residing in their service areas. CareFirst or CareFirst BlueChoice, Inc. has limited involvement as a control plan, but actively administers benefits and processes claims as a participating Plan on behalf of other control plans.

FEP Case Management Reimbursements
Case Management claims are processed by CareFirst's FEP case management claims processing unit, using the FEP National System. The claim's payments are documented on a Blue Cross and Blue Shield Federal Employee Program Explanation of Benefits (EOB) Form. Each claim processed generates a separate EOB and check, if applicable. Multiple claims for the same patient and/or claims for different patients will never appear on the same EOB.

Refunding Erroneous Payments
If an overpayment from CareFirst or CareFirst BlueChoice, Inc. is discovered, the provider should not return the check. This causes a delay in the payment due to the provider, and since the initial check must be voided, claims are reprocessed and a new check issued. In such a situation, the provider should call Provider Services (see Important Telephone Numbers) and alert the service representative that an adjustment is needed.

The service representative may initiate a voucher deduction or may instruct the provider to refund the amount of overpayment. If the amount payable cannot be fully recovered on the next remittance schedule, the balance due is carried forward. Deductions are listed and identified on the final summary page of the remittance as "PA&R Deductions". To determine the patient account(s) affected by the deduction, a provider must research prior remittance schedules to determine applicable patient(s) and claims(s) identified by a "CR" in the "Amount Paid" field, which relate to the current deduction.

Note: The paper remittance schedules should be kept on file by the provider for research purposes to account for PA&R deductions or to solve potential posting errors.

Methods of Reimbursement
CareFirst and CareFirst BlueChoice, Inc. provide several methods of hospital reimbursement: DRG (Diagnostic Related Group); combined per diem or case rate payments; predetermined per visit fees; percentage of charges (discounted); predetermined flat fees; and percentage of Medicare RBRVS fee schedule amounts. To determine the method(s) of payment for your facility and for the services in question, refer to your Financial Department for the payment information contained in the Appendix(es) to the Master Hospital Agreement.

CareFirst negotiates individual contracts with each of our participating hospitals. This contract will specify both the networks that the provider participates in (Participating, Preferred and/or CareFirst BlueChoice, Inc.) and the agreed upon financial terms of the contract. These arrangements are specific to each facility but generally follow the same method of payment for the type of service provided.

Participating Hospitals in Maryland
Maryland hospitals are reimbursed according to rate structures set by the State of Maryland-Health Services Cost Review Commission.

Diagnostic Related Group (DRG) Inpatient Payment Methodology
In general, participating hospitals which are not located in Maryland are reimbursed for approved inpatient services using a methodology similar to Medicare's DRG payment method. This method uses the Principal Diagnosis and up to eight additional diagnoses, the Principal Procedure and up to five additional procedures, in addition to the patient's age sex and discharge status to assign a DRG. The diagnoses and procedure codes submitted are valid ICD-9-CM designated codes. Each DRG is assigned a relative weight. Using: 1.) the DRG weight (for the grouper version in use at the time services were rendered); 2.) with the hospital's contracted base rate for the line of business and time period and; 3.) reimbursement description available on the remittance schedule or through CAREFIRST DIRECT, you can check individual payment calculations.

Outpatient Payment Methodology
Outpatient services billed on the UB-92 claim form are paid according to a schedule of fees and are priced using the CPT or HCPCS code that is filed in conjunction with the following revenue codes:

*Ambulatory Surgery Categories (ASC) Outpatient Payment Methodology

Claims for outpatient surgery are paid using a methodology similar to Medicare's ASC payment method. CPT-4 codes are categorized according to the HCFA ASC grouping list in which the code is defined as one of ten payment categories listed as 01-11. The rate for that category is defined in the Ambulatory Surgery Groupings section of the hospital's outpatient contractual financial information. Please remember that this information is based on the year the services were incurred, so please refer to the hospital financial information relevant to that time period.

Remittance Definitions
The following codes indicate how payment was calculated and appear in the AMOUNT PAID field on the Remittance. This code also appears on the DRG screen of CareFirst Direct, under the RD (Reimbursement Description Code) column. The definition and field values are as follows:

• Definition- Indicates how the reimbursement amounts were calculated for hospital payments when the subscriber shares the discount.
• Field Values
  • C1 Case rate - claim does not fall outside of outlier range
  • C2 Case rate - claim falls below a low outlier
  • C3 Case rate - claim falls above a high outlier
  • C4 Case rate - plus per diem for excess days
  • C5 Case rate- covered amount is less than case rate used to calculate reimbursement
  • D1 DRG - Standard DRG Payment
  • D2 DRG - Low outlier
  • D3 DRG - High outlier
  • D4 DRG - Transfer patient
  • D5 DRG - Claim does not fall outside of outlier range but covered amount is less than DRG; covered amount is used to determine reimbursement
  • D6 DRG - Paid on per diem basis
  • D7 DRG - Claim falls below low outlier but covered amount is less than DRG; covered amount is used to determine reimbursement.
  • D8 DRG - Claim falls above high outlier but covered amount is less than DRG; covered amount is used to determine reimbursement.
  • DP DRG - Paid on per diem basis but covered amount less than DRG, covered amount used to determine reimbursement.
  • DT DRG - Transfer patient but covered amount is less than DRG; covered amount is used to determine reimbursement.
  • P1 Per diem - one level
  • Per Diem DRG claims will never be paid as high cost outliers
  • P2 Per diem - sliding scale based on total confinement days
  • P3 Per diem - sliding scale days paid at multiple levels
  • P4 Per diem - covered amount exceeds threshold amount and percent of covered amount is used to determine reimbursement
  • P5 Per diem - covered amount less than per diem amount and covered amount is used to calculate reimbursement
• Remark Codes
  • PO21- Benefits for this service are included in the payment on previous claims for this admission. Since the provider is participating with our plan, the patient is not responsible for payment of this service. This remark code will appear for interim claims in the following scenarios:
• We paid the standard DRG on the original claim and no additional payment is made on the interim bill (i.e., the additional services on the interim bill did not cause the claim to be paid as an outlier).
• With the additional services on the interim bill, we owe the hospital on additional payment. This remark will advise the hospital that the overall payment for the admission includes the payment made on any previous claims and the current claim.
  • DRGG- This claim was priced according to the DRG code indicated by the remark code ending with 'G'. The first 3 positions will represent the DRG code used in the processing of the claim (for example, 014G).
  • DRGD- This remark will appear on Remittances when FEP OBRA DRG pricing was used to determine the payment on the claim. The remark will appear as a three digit DRG code followed by a 'D' (for example, 014D).

Miscellaneous Payment Provisions to the Master Agreement

Members to be Held Harmless
Payments shall be made to the hospital by CareFirst and CareFirst BlueChoice, Inc. only for covered inpatient and outpatient hospital services which are rendered to eligible members, and which are services determined by CareFirst and CareFirst BlueChoice, Inc. to be medically necessary.

Any services found by CareFirst and CareFirst BlueChoice, Inc. to have not been medically necessary, and ineligible for benefits, will not be charged to the member. Payment may not be sought from the member for any balances remaining after CareFirst and CareFirst BlueChoice, Inc.'s payment, unless it is to satisfy the deductible, copayment or coinsurance requirements for services not covered under the member's Health Benefit Plan. The hospital shall not charge, collect a deposit from, seek compensation, remuneration or reimbursement from or have any recourse against members or persons other than CareFirst or CareFirst BlueChoice, Inc. for covered services provided according to the Master Hospital Agreement.

Payment Period
CareFirst or CareFirst BlueChoice, Inc. will make its best effort to pay hospitals within the time period specified in the Provider Agreement and pursuant to the current law in the local jurisdiction.

The payment period may be extended if CareFirst or CareFirst BlueChoice, Inc. requires additional time to investigate whether it is responsible for payment of the billed services or to determine if the services were medically necessary.

Third Party Payments
The hospital will collect payment from third party payers following its customary collection procedures, whenever such payers have primary responsibility to provide or pay for covered services in accordance with the coordination of benefits (COB) and third party liability requirements of the member's Health Benefit Plan. If CareFirst or CareFirst BlueChoice, Inc. is required to pay a portion of the covered services not reimbursed by the primary payer, CareFirst or CareFirst BlueChoice, Inc. will only pay that amount which, when combined with the other payers, and the member's payment responsibility, would equal the amount that would have been paid according to the agreed allowances under the member's Health Benefit Plan up to the Medicare allowable charge. The hospital shall not bill or request any amounts in excess of the agreed upon allowances other than applicable deductibles, copayments, or coinsurance.

Adjustments
Either the hospital, CareFirst, or CareFirst BlueChoice, Inc. will be entitled to request an adjustment of a payment, if it informs the other party of an underpayment or an overpayment within six months following the date of the payment by reason of, but not limited to: duplicate payments for covered services; inappropriate denials of payment for covered services; or failure to pay the full amount due for the services. Except in situations involving third party payment, offset of overpayment, billing errors or incorrect information supplied to the Plan, all payments are final unless an adjustment is requested within six months of the payment date.

Offset of Overpayment
If an audit identifies overpayments, the hospital will refund CareFirst or CareFirst BlueChoice, Inc. the overpayment amount or will allow the deduction of the overpayment from future payments.

The hospital will refund to CareFirst or CareFirst BlueChoice, Inc., any amounts paid in error due to inaccurate or incomplete member information; amounts paid for service for which the member was not entitled; or for primary payments made by CareFirst or CareFirst BlueChoice, Inc. when a third party or another entity actually has the primary payment responsibility.

Utilization Review Program
The primary objectives of the Utilization Review (UR) program are to conduct billing audits for participating providers and reporting results through informational/educational programs. These programs include information on correct claims submission, benefit interpretation and other provider questions. Developed cooperatively with providers and their professional organizations, the programs encourage clear communication with the health care community in understanding CareFirst and CareFirst BlueChoice, Inc.'s policies and procedures.

The UR program is responsible for routinely analyzing paid claims data and Pro/FileSM information for all providers. The UR program also reviews and responds to individual member/provider issues and internal referrals related to utilization.

Reviews are conducted both on a prepayment and a postpayment basis. Prepayment reviews of medical records are conducted before final processing of claims is complete. A review of both individual complaints and pattern cases is performed after payment is made.

The UR program is administered by the Medical Affairs Division under the direction of the Senior Medical Director and is supported by graduate nurse reviewers (Senior Analysts).

A panel of practicing physicians serve as Professional Advisors (PA) to this program. Appeals of PA decisions are resolved by a peer review committee. Cases of fraudulent billing are pursued by the Internal Audit Division in cooperation with local, state or federal authorities.

Appeals Process

Central Appeals and Analysis Unit
The Central Appeals and Analysis (CAU) is responsible for review preparation, reconciliation and communication, reporting and analysis of all appeals for CareFirst and CareFirst BlueChoice. The CAU is the primary contact for appeals for internal and external auditing agencies.

Clinical Appeal* Checklist
CAU reviews and responds to clinical appeals. CareFirst and CareFirst BlueChoice have one internal level for the appeals process. Appeals must be submitted within 180 calendar days or 6 months, whichever is longer, from the date the adverse decision was received.

• Submit documentation that explains why the case is being appealed and the facility or physician's position on medical necessity.
• The documentation should include:
  • The complete inpatient medical record
  • A signed medical release form for the dates of service in question
  • A letter of medical necessity addressing specific related clinical information. If the appeal includes a request for review of ancillary services, the letter of medical necessity should specifically state the medical necessity of the ancillary services on the denied days.
• A licensed physicians who is a member of the hospital's staff or a nurse working in conjunction with the physician should write the letter of medical necessity.
  • A licensed physician who is a member of the hospital staff may include the attending, treating physician, UM Director or any physician knowledgeable about the case.
  • If a nurse writes the letter of medical necessity, it should indicate the physician(s) involvement in the appeal.

Administrative or Technical Appeals
CAU does not review or respond to administrative or technical appeals. Direct questions about claims that deny because of enrollment, co-pay/deductible, lack of preauthorization, claims payment and coverage exclusion should be forwarded to Provider Services. Any hospital representative may submit these appeals.

• When a claim is denied for "no authorization obtained," this indicates there is not a contractually required pre-certification on file.
• To submit a payment dispute for "no authorization," give a specific reason why pre-certification could not be obtained and include the complete medical record.
• We will return requests for reconsideration without the above information citing "denial of payment upheld," until the request is submitted with the information needed to complete the review.

Expedited or Emergency Appeals Process
You may request an expedited or emergency appeal after an adverse decision for preauthorization of a service, admission, continued length of stay or awaiting service or treatment.

• An expedited or emergency appeal is defined as one where a delay in receiving the health care service could seriously jeopardize the life or health of the member or the member's ability to function or cause the member to be a danger to self or others.
• We will answer an expedited or emergency appeal within 24 hours from the date the appeal is received.
• An expedited appeal may include, but is not limited to, a physician to physician or peer to peer review, when an adverse decision has been rendered regarding a concurrent inpatient length of stay.

Appeal Resolution
Once the internal appeal process is complete, you will receive a written decision that will include the following information:

• The specific reason for the appeal decision
• A reference to the specific benefit provision, guideline protocol, or other criteria on which the decision was based
• The next level of appeal, as appropriate.

Appeal Contact Information
Submit clinical appeals and grievances to the following address:

Central Appeals and Analysis
CareFirst BlueCross BlueShield
P.O. Box 17636
Baltimore, Maryland 21297-1636

For Expedited Appeals & Grievances:
Main Fax Number 410.528.7053
Phone Number 410.605.2460 or 1.877.259.4427

Other Party Liability

Subrogation
Subrogation refers to the right of CareFirst BlueCross BlueShield (CareFirst) and CareFirst®' BlueChoice, Inc. (CareFirst BlueChoice) to recover payments made on behalf of a member whose illness, condition, or injury was caused by the negligence or wrong-doing of another party. Such action will not affect the submission or processing of claims, and all provisions of the participating provider agreement will apply.

Personal Injury Protection (PIP) - No Fault Automobile Insurance
PIP is an automobile insurance provision that covers medical expenses and lost wages experienced by the insured or passengers as a result of an automobile accident, and may be required by automobile insurance laws to provide benefits for accident related expenses without determination of fault. While Maryland law requires this coverage for passengers and family members under the age of sixteen, many insured members choose to continue to carry other passengers under this provision in their automobile insurance contracts.

CareFirst contracts may contain a provision that requires coordination with PIP, and may only provide benefits for covered medical expenses not reimbursed by the automobile insurer. A copy of the record of payment from the automobile insurer must be attached to the claim form submitted to CareFirst for any additional payment due.

Workers' Compensation
Health benefit programs administered by CareFirst exclude benefits for services or supplies for injuries/illnesses arising out of or in the course of employment to the extent that the member obtained or could have obtained benefits under a Workers' Compensation Act, the Longshoreman's Act, or similar law. In the event that CareFirst benefits are inadvertently or mistakenly paid despite this exclusion, CareFirst will exercise its right to recover its payments.

Workers' compensation replaces health insurance. A participating provider cannot balance bill CareFirst or the subscriber for any amount not covered under workers' compensation unless it is determined that the charges are non-compensable under workers' compensation. If workers' compensation determines that the charges are non-compensable, attach a copy of the denial from the workers' compensation carrier to the claim.

Maryland's Workers' Compensation Act excludes sole proprietors, partners and officers of closed corporations from mandatory coverage under the act, giving them the option to elect coverage. Verification from the subscriber of this waiver may be required by CareFirst in order to process claims.

Quality Improvement

CareFirst BlueCross BlueShield (CareFirst) and CareFirst BlueChoice, Inc. (CareFirst BlueChoice) recognize the Quality Improvement (QI) Program as critical to all aspects of clinical care and service, including behavioral health, and fully support an environment to help providers improve the safety of their clinical practice. The QI Program provides a framework for the Plan to continuously improve the quality and safety of clinical and behavioral health care and the quality of service provided to Plan members.

Specific QI Program objectives are to:

• Promote, implement and maintain effective quality improvement processes throughout the organization;
• Maintain a high quality network of credentialed health care providers through a systematic selection and evaluation process;
• Use data to identify opportunities for improving the quality and safety of clinical care, including behavioral health care, and the quality of service;
• Develop interventions for improvement based on the analysis of root causes and barriers to improvement;
• Measure and evaluate the effectiveness of actions and interventions and apply the findings to future interventions;
• Establish standards for care and service and monitor and evaluate performance against standards, including recognized public health goals;
• Monitor and promote the use of preventive health services and implement interventions for improvement;*
• Collaborate in the development of disease management programs to promote the effective management of chronic conditions;
• Promote excellence in practitioner medical record documentation that chronicles effective patient care and permits quality review;*
• Evaluate and improve member and provider satisfaction;
• Monitor and evaluate functions formally delegated to contracted entities;
• Comply with regulatory requirements and mandates;
• Incorporate federal, state and local public health goals in the development of the QI program;
• Comply with specific quality, access, data and performance measurements adopted by the State and Federal agencies for treatment of members, especially those with special needs;
• Investigate and resolve member dissatisfaction related to clinical issues; and
• Monitor continuity and coordination of care.

*Does not apply to PPO

CareFirst and CareFirst BlueChoice communicate regularly with providers regarding their QI activities via BlueLink, Internet and special mailings. You may also call the Quality Improvement Department (see Important Phone Numbers).