Dme Business Plan - DOC by vkv75576


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To:      Members of NEMED
From:    Aimée Dodge
Cc:      Karyn Estrella, BCBSVT DME Provider Team
Date:    August 9, 2001
Re:      DME Providers follow-up from June 1, 2001 memo

Since May 8, 2001 the BCBSVT team has been working to address all of the outstanding issues noted in the June 1, 2001
memo. The following is an update on these issues. Please note the original issue is noted as a reference point, and then
an update is given as to status and actions taken and/or to be taken. Some of the updates remain at status quo, and some
state that the issue has now reached resolution.

We will continue to update you on a periodic basis until all the issues have been resolved.

1) Electronic Claims Submission/HIPAA

 Issue: 6-7 years ago BCBSVT did not have a cost effective way for DME Providers to submit their claims
electronically. Since the formation of the EDI department progress has been made and all Providers can now submit
standard HCFA’s that require no special handling electronically. This accounts for about 80-85% of professional
claims received at BCBSVT. Most all DME claims cannot be submitted.

Update: The team will be reviewing the claim types that cannot be processed electronically in early September.
The deliverable for this workgroup is an analysis and specific recommendations as to how to reduce this volume
of claims that must be submitted on paper. Those recommendations will be submitted to the appropriate business
units for review and approval for implementation. It is important to note that these recommendations will not be
limited to technical solutions. More likely, they will be focused on changes to business policies and procedures.

An exception to this is those claims that require attachments for which the HIPAA regulations have not been
finalized. Until they are finalized, we will not be in a position to address this issue outside of a business decision
to reduce the instances where supporting documentation is required.

2) WEB based Initiatives

Issue: Eligibility and Claims Status will be available in the near future. The anticipated implementation date for
eligibility is July/August 2001with claim status following. The WEB applications will be tested by four test sites in
June. Once all testing is completed, and identified issues resolved, the rollout to the provider community will occur.

Update: We are currently in our beta test with claim submission, claim status and eligibility inquiry with a 4
PHO's and a number of individual/small provider groups. We are beginning the planning process for a broader
general release of the site and anticipate that this will occur during September.
                                       445 Industrial Lane, P.O. Box 186
                                            Montpelier, Vermont 05601
                        Corporate office 802-223-6131 Subscriber Service 800-247-BLUE
3) Rent-to-Own Options, Rental Caps, Supplies, Maintenance and Purchase Price

Issue: DME Providers were asked what they felt was appropriate to have as a rental cap and what they felt they
should be allowed to charge extra on. Discussion ensued that pertained to the Consumer Protection Mandate (41c.
Rent-to-Own; assistive devices) focusing on the term “bona fide cash price”. DME Providers’ interpret this term to
mean the amount they would charge the public. DME Providers requested a review of the Rent-to-Own language.

Update: BCBSVT is in the process of developing one standard fee schedule for all DME Providers. This
schedule is being developed based on DME Providers needs. Until the fee schedule is finalized (2002), rentals
will still need to be reviewed in conjunction w/ DME Providers.

4) Documentation

Issue: DME Providers’ asked if BCBSVT could eliminate the need to require medical necessity on some of the basic
DME supplies and Prior Authorizations. No other insurance carriers require Prior Authorizations as extensively as
BCBSVT. Can BCBSVT identify those DME items that need Prior Authorization and just spend medical review
time on these cases?

DME Providers’ requested an immediate solution would be to eliminate the review of DME items of $100.00+, and
it was recommended that if a floor for review is necessary it could be appropriately set at $500.00+.

DME Providers’ questioned what criteria was utilized for reviews; dollar limits ($100) or medical necessity.
BCBSVT stated that the criteria utilized most, is medical necessity, however, both criteria are viewed. DME
Providers’ requested that any DME items that cost less than $100.00 be allowed to process without any
documentation requirements.

Update: BCBSVT is currently underway with a major system unification project to eliminate the need for
submitting medical necessity forms and Prior Authorization letters with claims once they have been approved.
System unification will also eliminate the need for BCBSVT to manually track DME rentals to the purchase
price. System unification is to take place towards the end of 2001.

5) Claims Adjudication, Customer Service and Operations

Issue: a) Claims Adjudication Overview
     When DME Providers call to check on the status of claims, they are told that the claim is not in the system.
     Claims are sent in (or hand delivered) to be walked through claims process. 4-6 weeks later when DME
         Providers check on the status, they are told there are no claims on file.
     What information is needed in order to process rental claims.
     How can BCBSVT improve processes so claims payment can begin to approach the 45-day mandated time
         frame? This is a primary concern of Providers, as payments delays and complications (multiple
         submissions) are greatly affecting costs.

BCBSVT indicated that one issue with direct delivery may be that claims are not getting into the mailroom and
filmed. This would mean the claims would not be batched accordingly for claims processing, therefore, could be one
cause for lost claims.

Update: Claims need to be sent in through the normal channels. BCBSVT’s goal is to process claims within 30
days or less. The requirements we have in order to process DME Rentals are: valid date span for service, valid
HCPC codes (if it is a unspecified code than a detailed description is required), charge for the service, purchase
price for rental item, medical necessity form for all non-managed care patients, and a valid provider number on
the claim.

Issue: DME Providers’ indicated that they have called in on claims status, and have been told that BCBSVT has no
record of their claims, however, the DME Providers’ already have receipt of a claim denial. DME Provider’s have
the claims denial in hand and it is not appearing on the BCBSVT system. DME Providers’ noted that all lines of their
business (LOB) are affected by this BCBSVT claims issue and confirmed that it has nothing to do with the type or
cost of item. They have seen it occur on low cost to high cost items (i.e., $10 - $10,000).

Update: Additional training was provided to staff. All representatives are now aware of all of the locations a
claim may be. If the claim has been received and keyed into the system the representative will have knowledge of
the status. BCBSVT is in the process of testing our new website on a tool which will give the DME providers the
capabilities to check claim status on line.

The DME Providers’ also inquired as to the time frame they should wait to call in regard to claims status. BCBSVT
indicated that 14 days would be appropriate. 95% of claims submitted to BCBSVT process within 14 days.
However, there are 5% of our claims which cannot be processed within the 14-day time frame due to the nature of
the claim (i.e., manual intervention required, billing of non-standard claim forms, etc.) DME Providers’ sighted that
in the past they were paid within 30 days. At present DME Providers are waiting 30 – 120 days for claims to process
to payment. BCBSVT indicated that 7 days is the goal for claims to be entered for processing, therefore, 14 days is
above and beyond the goal and should provide DME Providers’ with more accurate information when inquiring on
claims status.

DME Providers’ posed the following questions: Does BCBSVT have a mechanism to identify DME claims that are
within the system (i.e., in suspense)? Then from this can BCBSVT identify the percentage of DME claims for each
DME Provider? This would allow BCBSVT to get a true picture of the situation and work to bring all outstanding
claims issues to resolution.

Update: DME Providers requested an outlined Plan of Action with a timeline to address all issues sighted.
BCBSVT is at present thoroughly investigating all of the above mentioned issues and expects to have the
investigation completed by the end of System Unification which will be towards the end 2001.

Issue: b) Customer Service (CS)
     CS continues to be problematic for DME Providers: extended times on hold, and difficulty getting through.
     Benefit confirmation call wait time.

DME Providers’ sighted that they are having problems obtaining benefit confirmation as call-waiting times is
extensive. Subscribers are having to wait while call is being placed. Oftentimes subscribers end up paying directly.
This places the customer in the middle and can cause a hardship to the member.

Update: DME Providers should be using the joint letter which was distributed at the May 8, 2001 meeting which
announced the new Provider Service Unit. The letter provides a listing of the type of calls/questions that should
be directed to each area (Provider Service Unit v. Provider Relations). The letter also provides the 800 numbers
that should be utilized when calling both areas. The formation of the new Provider Service Department in
conjunction with the instruction on directing calls/questions should already be providing better service to the
DME Providers.

BCBSVT has initiated a Quality Improvement (QI) Project which focuses on Provider Service internal and
external issues.

BCBSVT has re-implemented dedicated provider units. BCBSVT has found that the dedicated units work best to
serve both our providers and our members. Another tool that has been recently implemented with a small subset
of BCBSVT is Customer Focus (CF). This tool will be utilized as an enhanced member/provider inquiry-tracking
tool which will allow for more efficient and timely follow-up responses. CF is anticipated to be rolled out
company wide by October 2001.

Tracking mechanisms are showing a dramatic decrease in the average talk/wait time in addition to the average
abandon rate.

Issue: DME Providers’ questioned what documentation is required for rental claims. Claims reject when they do not
have the purchase price indicated in Box 19 of the HCFA 1500. DME Providers’ indicated this should not be
required with each subsequent submission. It should only have to be indicated on the initial submission.

Update: BCBSVT confirmed that DME Providers’ should not receive a rejection because the purchase price is
not on subsequent submissions, however it is recommended to ensure that claims are not rejected. Additional
follow-up presently in progress.

6) Post payment audits

Issue: BCBSVT has not performed post payment audits in the past. This is an initiative BCBSVT has begun to
pursue. DME Providers’ sighted that they were on the initial list to have a post payment audit performed. DME
Providers’ noted that they are such a small portion of BCBSVT business; 1% - 2% and suggested that claims be
brought current and paid, and then enact in performing post payment audits. It was noted that Medicare focuses on
DRG and DME audits. DME Providers’ noted that our external audit firm may be following the Medicare Audit
course. With regards to the post payment audit for Infusion Therapy; DME Providers’ indicated that the external
audit firm implied policy and procedures throughout the audit that the DME Providers’ are not aware of.

Update: BCBSVT deferred post payment audits for DME Providers until all issues are resolved. The audit for
Infusion Therapy is proceeding.

7) Provider Manual - Policies & Procedures

Issue: DME Providers’ indicated that if they had clear Policies & Procedures to follow it would eliminate some of
the confusion, and back and forth that presently occurs. The current Provider Manual is very generic and does not
have a specific section related to DME.

Update: The provider manual will not begin to be updated until late 2001 or early 2002. There are many changes
that will be occurring in conjunction with System Unification that will need to be included in the Provider
Manual. In addition, the Provider Manual has typically been created with physicians in mind and does not
necessarily reflect specialty care providers. The update will however now include specialty care providers; i.e.
DME Providers.

8) CPAP Equipment

Issue: Currently BCBSVT pays up to the purchase price and does not include supplies within this reimbursement.
DME Providers’ are not receiving payment for masks, headgear, and humidifiers that are needed in conjunction with
CPAP equipment. With regards to the humidifiers that are generally ordered with CPAP equipment, Stephen
Perkins, M.D, Corporate Medical Director for BCBSVT, questioned why a physician would not prescribe the
humidifier with the CPAP equipment. Dr. Perkins stated that it should only be a rarely omitted. This causes issues
with the need to have a humidifier prior approved 6 months into care. DME Providers’ noted that they see
approximately 50% of their CPAP prescriptions come in without the humidifier included.

Update: BCBSVT is now paying for the previously omitted humidifier with CPAP equipment.

This issue should be resolved.

9) Case of a Change in Prescription and Re-direction by BCBSVT

Issue: DME Providers’ sighted a case in which a customer had a prescription from their physician. After review of
the case at BCBSVT a change in the prescription was initiated, and a re-direction to a different vendor to obtain the
prescribed item(s).

Update: As was previously indicated Dr. Perkins stated that BCBSVT cannot change prescriptions prescribed by
a member’s physician. If a situation such as this ever arises again direct communication should be made
immediately to Dr. Perkins. The communication can be made via email. (Note that isolated claims issues should
not be submitted directly to Dr. Perkins).

*Dr. Stephen Perkins, Corporate Medical Director: Copy Administrative Assistant, Kathy
Cross, to ensure that review/response is prioritized accordingly:

This issue should now be resolved.

10) Date Span

Issue: DME Providers’ indicated they are having issues with claim submissions that have a date span (i.e., date goes
beyond that of the initial service start dates). This causes denials on rent-to-purchase claims. The DME providers’
often want to submit the rental in its entirety v. monthly, however these claims are rejected, even when prior
approval has been received.

Update: As previously mentioned this is a current system limitation and will be fixed as part of the System
Unification initiative.

11) Carve-out Claims/Infusion Therapy

Issue: A DME Provider sighted Medicare Carve-out claims dating back over a one-year period. This DME Provider
was told by BCBSVT that BCBSVT would not approve them. When a denial is received this indicates that prior
authorization is needed. Member is caught in the middle between Medicare and BCBSVT. DME Providers’
questioned why BCBSVT needs review for preliminary approval, when Medicare is Prime. DME Providers’
indicated that they could assist with obtaining the information needed to perform a preliminary review. Providers
emphasized the need for a coverage decision at the start of therapy, so both the subscriber and provider can make an
informed financial decision. This is also a JCAHO requirement. Payments on any of these claims are currently

Update: BCBSVT will now approve Medicare Carve-out claims going forward as medically necessary,
HOWEVER the Explanation of Benefits (EOB) from Medicare will need to be received before BCBSVT will pay
on these claims. BCBSVT will continue to consider entire issue further.

12) Blue Card Program (Out-of-Area)

Issue: DME Providers’ are contractually obligated to bill for out-of-area claims. The Blue Card Program is inclusive
of the Primary payer does not include secondary payers. DME Providers’ have requested a procedure/policy on how
they should handle Blue Card Program (Out-of-Area) claims. DME Providers’ noted that they are seeing payment of
whichever plan pays less (i.e., Home Plan v. BCBSVT). Reimbursement should be based on that of the home plan.
BCBSVT suggested that if DME Providers do not have the number of the home plan they should contact the
Provider Service Unit and they can connect them to the right area at the Home Plan. Providers are asking for a
mechanism that will pay these claims in a timely manner.

Update: See Instruction Letter at end of Memo which was mailed out to all providers, including DME Providers,
in 2000, and again this year. There are no specific requirements necessary for DME Providers to inquire/submit
Blue Card Program (Out-of-Area) claims.

This issue should now be resolved.

With regards to inconsistent payments, claims examples would be needed. Payments should be based on the
Vermont rate as long as Vermont is the processing entity.

March 2001

Dear Provider:

Many of you are familiar with the BlueCard Program which links participating health care
providers and the Blue Cross Blue Shield Plans across the country through a single electronic
network for claims processing and reimbursement. The program allows you to submit claims to
your local Blue Plan for services provided to members from other Blue Cross Blue Shield Plans
who are traveling or living in another Blue Plan’s service area.

Claims Filing

Blue Cross and Blue Shield of Vermont electronically forwards your claims to the member’s
Blue Cross Blue Shield Plan when the account is exempt from the BlueCard Program. (We have
identified these accounts for you in the past through a “file direct” listing.) You do not need to
send paper claims directly to the member’s Blue Plan. Instead, you submit them to us.

In order for us to electronically route these claims on your behalf to the other Blue Plan, it will be
important for you to correctly capture on the paper claim the member’s complete identification
number, including the three-character alpha prefix at the beginning. If this information is not
included, we will return the paper claim to you, which will delay resolution and payment.

If the member’s claim is exempt from the BlueCard Program, we inform you that the claim is
being forwarded to the member’s Blue Plan. The member’s Blue Plan will sends you a detailed
explanation of benefits/payment advice with your payment, or if there is no payment, a notice
explaining why. The member is responsible for any balances remaining after their Blue Plan’s

Occasionally, you may see some ID cards with no alpha prefixes. In these cases, you will need to
file the claim with the Blue Plan indicated on the back of the ID card. You will not be required
to accept our reimbursement for these

Coordination of benefit claims (secondary) or Medicare complementary benefit claims will need
to be filed directly with the home plan for consideration.

We encourage you to call BlueCard Eligibility at 1-800-676-BLUE to verify member eligibility
and coverage. Should you have a question about the status of a claim or your payment for these
members, please call the member’s Blue Plan.

If you have questions or issues arising regarding the BlueCard plan feel free to contact your
Provider Relations Representative at 802-371-3264.


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