Prepaid Health Plan Interest and Penalties for Provider Claims

Prepaid health plans are required to pay interest and penalties to providers if they fail to accurately pay or inappropriately deny a claim.

In accordance with Section V. H.1.d of the NC PHP Contract, prepaid health plans (PHPs) are required to pay interest and penalties to providers if the PHP fails to accurately pay or inappropriately denies a clean claim within 30 calendar days of receipt of medical claims or within 14 calendar days of receipt for pharmacy claims.

  • This includes incorrect denials, and under- or partial-payments that are identified and paid on reprocessed claims.
  • It is the PHP’s responsibility to issue interest and penalty payments to providers when applicable.

A clean claim is a claim for services submitted to a PHP by an NC Medicaid Managed Care medical or pharmacy service provider which can be processed without obtaining additional information from the submitter in order to adjudicate the claim. 

If the PHP fails to implement fee schedule changes and reprocess impacted claims with the correct rates within 45 calendar days of notification of a fee schedule change from NC Medicaid, the PHP must pay interest and penalties on the adjusted amount. 

Prompt Pay Standards

PHPs are contractually required to follow prompt pay standards as defined in N.C. Gen. Stat. § 58-3-225 to the extent not inconsistent with federal law or regulations or State law or rule. 

Fee Schedule PHP Policy

As stated in Section V.H.1.d.iv.d of the NC PHP Contract are required to implement fee schedule changes and reprocess all impacted claims (claims with dates of services from the effective date of the NC Medicaid fee schedule change) with correct rates within 45 calendar days of notification from NC Medicaid. This standard is only applicable for NC DHB rate floor programs. Failure to implement fee schedule changes within the required timeframe will result in interest and penalty payments to providers beginning on the 46th calendar day after the PHP received notification from NC Medicaid.

A select number of fee schedules can be found on the Fee Schedule page of the NC Medicaid website. Effective dates are reflected in the fee schedule header and/or body. 

Updates to fee schedules not published on the NC Medicaid website will be communicated to impacted provider associations via email and/or rate letters from the Department.

Fee schedule updates are uploaded to PCDU every Friday. PHPs have been advised to regularly check PCDU for the latest fee schedules. 

Providers should route payment concerns to their PHPs’ appeals and grievances processes. Providers can escalate to the Medicaid Provider Ombudsman at Medicaid.ProviderOmbudsman@dhhs.nc.gov if necessary.

PHPs are required to promptly pay clean claims, update rate floor program fee schedules, and reprocess impacted claims in conjunction with one another. In cases where a provider submits claims with dates of service after the fee schedule effective date, PHPs shall adhere to both prompt pay and fee schedule implementation deadlines.  

Guidance scenarios can be found here.

Contact

NC Medicaid Contact Center, 888-245-0179

This blog is related to: