Over the past several months, HMSA announced its plans to convert to a new

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1 HMSA s For Participating Providers August 2007 INSIDE Referral exceptions 2 Administrative review 2 Behavioral health services 3 Health center operations 3 Tax reporting: HMO and federal plans 4 Fee schedule updates 4 Tax reporting: PPO plans 5 If you have questions about information in this Provider Update, please call a Provider Teleservice Representative at on Oahu or 1 (800) from the Neighbor Islands. Special issue HMSA s HMO conversion to QNXT approaches Over the past several months, HMSA announced its plans to convert to a new claims processing system (QNXT) and informed providers of the changes that have already occurred related to the conversion. Moving the processing of claims for HMSA s HMO plans to QNXT yet another part of the conversion effort is coming up soon. HMSA s target is to pilot test the system changes for two small groups of HMO members (approximately 9,000 to 12,000 members) in the fourth quarter. If the initial conversions function as expected, the remaining HMO members will be moved to the new claims processing system early next year. As HMO claims are moved to the new system, some adjustments must be made to workflows for both HMSA staff and providers. Going forward, HMSA believes the workflow changes will ultimately simplify the administrative burden for providers. Simplified referrals The out-of-health center referral process will be simplified. When all HMO coverage codes are converted to the new system, the need for formalized referrals faxed to HMSA or entered by the provider into HHIN will cease. As a reminder, the referring health center physician s name must be on ALL claims for out-of-health center services, as well as for consultations, laboratory tests, X-rays and nuclear medicine and various types of therapy services. Exceptions are listed on page 2. The name must be shown in Block 17 of the servicing provider s CMS 1500 claim form or in a comparable field in EDI. 17. NAME OF REFERRING PROVIDER OR OTHER SOURCE SMITH, JOHN D If the name of the referring provider is not found in Block 17, or if the name in Block 17 is not recognized by HMSA, the claim will not be paid. For specific information on formats, please refer to the interactive instructions for filing the CMS 1500 claim form in the Provider E-Library. To minimize possible confusion for providers during the transition, providers should continue to submit HMO referrals to HMSA via fax or through HHIN until all HMO plans are fully converted to QNXT. PS Hawaii Medical Service Association 818 Keeaumoku St. P.O. Box 860 Honolulu, HI Phone: (808) Branch offi ces located on Hawaii, Kauai and Maui Internet address: Provider Resource Center: hhin.hmsa.com

2 2 Provider Update - Participating Providers August 2007 Referral exceptions With the initial implementation of QNXT, referrals are not required for: Urgent/emergent services Mental health and substance abuse services provided by a practitioner participating with HMSA or BlueCard Routine vision exams provided within the HMO network or from HMO Vision Referral Panel providers Annual well-woman exams rendered by an HMSA participating provider Administrative review HMSA will be introducing a new process that will support health centers by managing referrals to instate providers who do not participate with HMSA and to ALL out-of-state providers. This process is scheduled to take place with the conversion of the first HMO coverage code to the new system, resulting in two processes overlapping for a few months until faxed and HHIN referrals are discontinued. Services rendered to HMO members by in-state nonparticipating providers and all out-of-state providers will not be eligible for benefits unless prior approval has been given through this new Administrative Review process. If there are no qualified participating physicians to provide the needed services, the patient s PCP or another health center physician can request an Administrative Review to obtain prior authorization for services from a nonparticipating or Mainland provider. The Administrative Review process will operate as follows: The PCP, another health center physician or health center administrator must submit an HMSA Precertification Request Form to HMSA via mail or fax it to (808) The updated form is enclosed for your review and is also available online in HMSA s Pro- vider Resource Center. Check the box at the top of the page marked HMO Administrative Review. When the practitioner completes the form, he or she will need to document the name and address of the nonparticipating provider and the rationale for referring the member to the nonparticipating provider. HMSA staff will review the request and validate that there are no HMSA participating providers available locally with the clinical expertise to perform the needed services. Approval and denial notification letters will be issued to the member with cc s to the PCP and the servicing provider, in most cases, within five to seven calendar days of HMSA s receipt of all pertinent information. Administrative Review is intended to be a process that takes place prior to services being rendered. It is important to submit requests for Administrative Review early. In unusual situations, when services must be rendered quickly, the PCP or health center practitioner should submit an Administrative Review to HMSA as soon as possible, not to exceed three business days after the services were rendered. If the services being proposed include services that also require precertification (refer to Services that Require Precertification in the Provider E-Library), the same form can be used for both purposes. Simply check both the Precertification Request box and the HMO Administrative Review box on the form. Precertification of the service does not guarantee that HMSA will approve the services being performed by a nonparticipating or out-of-state provider. In some cases, HMSA may approve the service but may determine it could be performed by a participating provider.

3 August 2007 Provider Update - Participating Providers 3 Administrative Review is not required for urgent/emergent in-state or out-of-state services performed by a nonparticipating provider. Administrative Review is not required for mental health/substance abuse services performed in-state by a participating provider or out-of-state by a BlueCard provider. Behavioral health services HMO plans currently do not require members to obtain referrals from their PCPs or other health center physicians to receive behavioral health (i.e., mental health or substance abuse) services from any HMSA participating provider. This has not changed. However, the HMO Guide to Benefits stipulates that HMO plans do not provide benefits for mental health or substance abuse services rendered by nonparticipating providers. If you plan to recommend that an HMO member receive mental health or substance abuse services from a Mainland provider, you should verify that the provider is participating with Blue Cross Blue Shield by calling BlueCard at 1 (800) 810-BLUE (2583). If the provider is not participating with Blue Cross Blue Shield on the Mainland, payment will not be made for services rendered. Health center operations Each health center will make its own internal decisions on how to implement the upcoming changes, with some health centers choosing to continue managing referrals within the health center. Practitioners should defer to their health center administrators for guidance regarding health center management of referrals. The HMSA HMO Referral Report, which lists services for which no HMO referrals were registered in HHIN, will continue to be sent to health centers until all HMO coverage codes have been converted to the new system. However, the report will not show refer- rals for members whose claims are being processed by QNXT. Only members whose claims are still being processed under the old system will show on the report. This means that, over time, the report will show fewer and fewer referrals until eventually, when HMO is fully transitioned to QNXT, the report will no longer be issued. As we convert to QNXT, you will receive a new report. Twice a month, HMSA will send health centers a report of out-of-health center claims. The health centers will review the report and notify HMSA of any claims that were not referred by a health center physician. In such a case, HMSA will send a refund request to the servicing provider, and the member will be responsible for payment. During a six-month transition period, the health center will also be asked to notify HMSA of claims for servicing providers who were denied in error. (Note: The specialist will have received a Report to Provider indicating that a referring physician was not listed.) In this situation, HMSA will follow up and remind the servicing provider to resubmit the claim with the referring physician s name in Block 17, as described on page 1. HMSA s Provider Relations field staff will follow up and provide health center administrators with more information about practical details prior to conversion. The changes referenced above will allow for continuity of care and in the long run will simplify the out-ofnetwork referral process. As we get closer to starting the pilot conversions, we will provide you with more information, including a reference guide and FAQs about this important change.

4 4 Provider Update - Participating Providers August 2007 Fee schedule updates to simplify provider tax calculations for HMSA s HMO and federal plans As HMSA moves its claims processing to the new claims processing system (QNXT), there will be changes to the manner in which tax calculations are reported on the Report to Provider (RTP). The changes referenced below will affect HMSA s HMO Plans, Federal Plan 87 and the Federal Employee Program (FEP). The changes will result in tax reporting that is similar to the current method used by The HMSA Plan for QUEST Members and 65C Plus. HMO Plans Over the next few months, as mentioned in this update, claims processing for HMSA s HMO plans will be moving to QNXT. The intent of HMSA s HMO is to provide members with a plan that has predictable copayments for the services they receive (e.g., $14). With this in mind, when tax is itemized on an HMO claim, HMSA currently makes separate payment for the tax line to ensure members do not owe more than their designated copayments. As HMSA converts HMO claims processing to QNXT, a different payment method will be used to provide for consistent provider payment and predictable member copayments. HMSA will update the fee schedule used to process claims for its HMO and federal plans, adding an amount equal to the appropriate tax to the existing fees. The new fee schedule will then be used to process HMO claims. Transitioning to the new fee schedule will occur gradually as HMSA s HMO plans are converted by coverage code to the new system. During the transition period, providers may receive multiple RTPs each week one with claims processed under the old system, showing tax paid as a separate line item; and others with claims processed under the new system, where tax is included in the eligible charge and separate payment is not made. When HMO claims are fully converted to the new system, providers will no longer need to bill tax as a separate line item since it will be included in the fees. If tax is billed as a separate line item on a claim processed under the new system, it will not be paid, and a message will be appended indicating that tax is included in the payment, and the member may not be billed. HMSA s federal plans HMSA s federal government plans, Federal Plan 87 (coverage code 087) and FEP (coverage codes 104, 105, 111 and 112), are also tasked with keeping member copayments and coinsurance predictable. Therefore, like HMO plans, claims processed for Federal Plan 87 and FEP will be processed based on the new fee schedule as soon as the plans are converted for processing in QNXT. Like HMO, once the plans have converted to QNXT, separate payment will no longer be allowed for tax, and because tax has been included in the fees, the member may not be billed. HMSA tentatively plans to convert its federal plans to QNXT later this year. As a reminder, as PPO and Federal Plan 87 claims will appear on the same QNXT RTP, the provider should double-check the member s coverage code, and if the coverage code is 087, the provider should not bill the member for tax. Even though the messages found on the RTP will be specific to the plan type, this simple double check will help prevent erroneous billing to members. As a separate, distinctive RTP is sent by FEP, it is less likely providers will mistakenly bill FEP members for tax. Fee schedules The new fee schedules that build an allowance for tax into the fee will be available on HHIN for review August 1, The new fee schedules will not be used to process claims, however, until the particular plan in question has converted to QNXT. This early posting of the fee schedules will allow providers to review the fees prior to the conversion of any of the plans in question. Note: Even though HMO plans and federal plans will share the same fee schedule, HMO discount arrangements will still apply.

5 5 Provider Update - Participating Providers August 2007 This change is expected to be helpful to providers, as providers will no longer need to calculate the amount of tax HMSA or the member should pay. In addition, providers will no longer need to bill tax, allowing additional room on the claim form to bill medical services and eliminating the possibility of calculation errors. Tax reporting for PPO plans Earlier this year, HMSA explained that if tax was billed as a separate line item on a PPO or CompMED claim processed by the new processing system, the tax row would be left blank, and no amount would show in the Member Owes column. The message on the RTP indicates, Tax is not a benefit. Participating providers should adjust tax based on the eligible charge. Providers are allowed to bill HMSA s PPO members for tax. This will not change.