Senate Bill S7765

                                 BILL NUMBER:  S7765

 TITLE OF BILL :

An act to amend the social services law, in relation to claims for
payment furnished by providers under the medical assistance program

 PURPOSE OR GENERAL IDEA OF BILL :

This bill would allow providers who are unable to submit timely claims
for Medicaid payment due to unforeseeable technical issues or computer
systems malfunctions to be able to receive payment for their services,
instead of having to forfeit the reimbursement regardless of the
amount, which occurs today.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1 codifies in statute Department of Health regulations
governing timely billing requirements under the Medicaid program.
This section also adds that for purposes of determining when Medicaid
claim submission delays may be excused based on the fact that they
were due to "circumstances outside of the control of a provider", this
excuse would include unforeseeable electronic, technical, or other
computer or systems malfunction.

Section 2 provides for an immediate effective date with retroactive
              

effect for all medical assistance dates of service on or after October
1, 2014 so that the law applies to claims currently in dispute that
were delayed by unforeseeable systems malfunction.

 EXISTING LAW :

The Department of Health regulates billing and claim submission
requirements for providers in the medical assistance program
(Medicaid) under. 18 NYCRR 540.6. These requirements do not exist in
statute. DOH relies on statutory authority from various sections of
the social services law related to payment under the Medicaid program,
including section 367-b.

The regulation at 540.6(a)(1) requires that provider claims for
payment of medical care, services, or supplies must be initially
submitted within 90 days of the date the medical care, services or
supplies were furnished to be valid and enforceable, unless the
provider's submission of the claim is delayed beyond 90 days due to
"circumstances outside of the control of the provider". The regulation
currently provides that this term includes, but is not limited to,
"attempts to recover from a third-party insurer, legal proceedings
against a responsible third-party or the recipient of the medical
care, services or supplies, or delays in the determination of client
eligibility by the social services district." The Department of Health
maintains a list of permissible delay excuses. However, this list does
not include delays caused by unforeseen technical or electronic
errors, and despite the open-ended language of the regulation, the
Department will not approve delays that may have been due to
circumstances outside of the control of the provider that are not on
its list of acceptable delays. These acceptable delays are: (1) proof
of eligibility unknown or unavailable; (2) litigation; (3)
authorization delays; (4) delay in certifying provider; (5) delay in
supplying bill forms; (6) delay in delivery of custom-made appliances;
(7) third party processing delay (only for claims submitted to
Medicare); (8) delay in eligibility determination; (9) original claim
rejected or denied due to a reason unrelated to the billing limitation
rules; (10) administrative delay in the prior approval process; (11)
"other"- (a)adjustment/recoupment of paid claim, (b) audit directed
replacement of a voided claim, (c) provider initiated replacement of a

voided claim, (d) interrupted maternity care, and (e) IPRO
denial/reversal; and (15) natural disaster.

If a provider's delay is due to reasons other than these delay
excuses, the provider will not receive reimbursement for their
services.

 JUSTIFICATION :

This bill would correct an injustice and ensure that providers who
provide services to our State's poor and elderly under the Medicaid
program are not denied payment because they were unable to submit
payments due to technical systems malfunctions that occurred outside
of their control. State and Federal health care policy initiatives
continue to place significant emphasis on the adoption of electronic
and technical systems to improve the quality of health care and the
patient experience. Providers have been mandated to incorporate
electronic prescribing systems, connect to regional health information
organizations (RHIOs), and incorporate electronic health records and
billing processes into their day-to-day operations to reduce fraud,
waste and abuse, increase efficiency, and augment data collection and
reporting. The need for these capabilities has progressed from best
practice to industry necessity. In most instances, providers now
require electronic systems to bill the State and Medicaid managed care
plans, and the success of the DSRIP and managed care depend on
providers being able to develop electronic capabilities to function in
the modern landscape.

Yet, for all of the emphasis being placed on adopting electronic
systems, State Medicaid regulations afford no leeway for late payments
that are due to technical malfunctions outside of the provider's
control. These often arise when new technologies are first
implemented, and can be particularly problematic as errors may not be
discovered until after the 90 day submission deadline has elapsed.
Because the Department. has elected to interpret the Medicaid billing
regulation narrowly, and only allows delayed claim submissions for
certain specific excuses, valid claims are being denied despite the
fact that the delay was not the fault of the provider, leaving
providers on the hook for significant losses. This is both patently
unfair and deleterious to the State's long term health care goals, and
for providers without the cash flow to sustain weeks or months of lost
late payment, this can be disastrous.

Medicaid providers should not have to lose out on months of payment
because of a systems malfunction they could not have prevented. This
bill would prevent this injustice from occurring and ensure Medicaid
providers are not unfairly penalized for technical systems errors that
were due to circumstances beyond their control.

 PRIOR LEGISLATIVE HISTORY :

Passed Senate in 2015

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect immediately and shall apply to all provider
claims that accrued on or after January 1 2017.