ERA Claim Adjustment Reason Code Mapping

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Elwin Lyons
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1 ERA Claim Adjustment Reason Code Mapping 1

2 Disclaimer Conference presentations are intended for educational purposes only and do not replace independent professional judgment. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of the Workgroup for Electronic Data Interchange (WEDI), its committees, workgroups or its affiliates. WEDI does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented. 2

3 Speaker Information Pam Grosze, PNC Bank Pam Grosze is Vice President and Senior Product Manager for PNC Bank s Healthcare Division, and has more than 25 years experience in the Healthcare industry. Pam also plays a leading role in industry organizations as co-chair of ASC X12 s Payments Workgroup (835), Board member for WEDI, co-chair of WEDI s Data Exchange workgroup, and co-chair of WEDI s Remittance Advice and Payments subworkgroup. Pam is also the X12 liaison for The Cooperative Exchange. Deb Strickland, Conduent Debra Strickland is with Conduent s National Standards Consulting Team, Government Healthcare where she works with clients, customers and those in need of Conduent s services such as Compliance services and healthcare solutions. A former co-chair of the ASC X12 Payments Workgroup, she has now moved to the Program management office and continues to be a driving force in the development and maintenance of the X12 transactions. Currently, she is on the WEDI board of directors, and is co-chair of the WEDI Remittance and Payment Work Group. Debra also serves as Vice Chair of the Code Committee which maintains codes such as Claim Adjustment Reason Codes (CARC), Claim Status Codes (CSC), Claim Status Category codes etc. Debra also fills the role of Educational Chair for the Cooperative exchange. Omni Adekanmbi, CAQH CORE Omoniyi Adekanmbi is a Manager for the CAQH Committee on Operating Rules for Information Exchange (CORE). Omoniyi oversees the CORE rule development process, including maintenance of the CORE Code Combinations, manages the CORE Information Request Process and supports CORE s industry education and outreach. Before joining CAQH CORE, Omoniyi served as Health Policy Intern at the National Consumer Voice for Quality Long-Term Care. Omoniyi comes to healthcare from a prior career in research and evaluation. 3

4 Agenda Description and purpose of codes How to determine mapping Tools available Where to find the codes Maintenance process for codes Maintenance process for payer mapping Where to go with questions 4

5 Electronic Remittance Advice - Adjustments Payers rarely pay the full amount submitted on a claim Claim / Service / Transaction must balance Total Charge amount minus all adjustments must equal paid amount (even $0) Providers need to know the reason for the adjustment Payers systems include internal / proprietary codes describing the adjustments Paper remittance advice Web portals To create an 835, the proprietary codes must be mapped to HIPAA compliant codes 5

6 What codes does the payer need to map? CAGC - Claim Adjustment Group Code, Group code for category of adjustment CARC Claim Adjustment Reason Code RARC Remittance Advice Remark Code NCPDP Reject Code National Council of Prescription Drug Plans Used for Pharmacy claims in addition to the RARC codes 6

7 What purpose do these codes serve? Group Codes are used in the CAS segments Identify who is responsible for the amount being adjusted CARCs are used in the CAS segments Explain the general reason for the amount that is not being paid by the healthcare payer RARCs are used in the MIA/MOA or LQ segments Further explain the reason for the reduction in payment Alert RARCs provide more generic information about actions the provider can take and are not associated with a specific CARC All of these codes work together to provide a complete message to the provider Group Code CO Contractual Obligation CARC 16 - Claim/Service lacks information or has submission/billing error(s) which is needed for adjudication RARC N391 - Missing emergency department records 7

8 What do providers do with these codes? Group Codes, CARCs, and RARCs are reviewed to determine what action to take on the claim Accounts Receivable posting Automatic reconciliation and posting by Practice Management System, where available Contractual or other write-offs Resubmission / corrected claim submission Secondary insurance billing Determination of Patient Responsibility Appeals Submission of supporting documents Other denial management processes 8

9 Why should the most detailed codes be used? Payers should map their internal codes to the Group, CARC, and RARC code combinations that best match the meaning of the internal code Gives providers the information needed to accurately post and take appropriate follow-up actions Promotes automated posting by the provider s systems Provides standardization for the provider same codes across payers Payers who map effectively can Reduce provider inquiries and misinterpretations Increase provider satisfaction Increase the accuracy of patient statements Encourage use of electronic transactions 9

10 What is the impact to the provider if the payer uses a generic CARC? The provider will not have enough information to determine what action should be taken with the claim Will require a phone call to the payer May cause the provider to continue to use the paper remittance advice rather than ERA/EFT Increases costs for the payer and provider Delays in Accounts Receivable updates for the provider due to manual posting Increased operational cost for the provider, loss of productivity Delays in secondary billing Provider may choose to take action rather than call, which may result in an incorrect action being taken Inaccurate patient billing Dissatisfied patient and provider 10

11 How do payers determine the mapping? Most payers have between internal codes that have to be mapped initially Payers should create a maintenance process to ensure consistent use of current 835 standard codes Industry resources are available to make the process easier: Mandated under HIPAA ASC X12N x221 Health Care Claim Payment/Advice (835) TR3 CAQH CORE Phase III CORE 360 Uniform Use of Claim Adjustment Reason Codes and Remittance Advice Remark Codes (835) Rule CAQH CORE specifies the MAX set of code combinations that can be used for 4 defined business scenarios If the payer s code/message does not fall into one of those 4 business scenarios, then any other code combination can be used Additional tools available ASC X12N TR2 Code Value Usage in Health Care Claim Payments and Subsequent Claims Situations that fall outside of the CAQH CORE defined business scenarios Encyclopedia of Group Code/CARC/RARC combinations all possible combinations Available for purchase at 11

12 Where are these codes located? CARC and RARC codes can be found at WPC-EDI.com/Reference Group Codes are found in the TR3. These codes can change only when the transaction version changes NCPDP codes CAQH CORE combinations for their 4 business scenarios ASC X12N TR2 Code Value Usage in Health Care Claim Payments and Subsequent Claims 12

13 What if the payer cannot find a comparable CARC or RARC for an internal code? REQUEST a CODE!!! There is a maintenance process for both CARCs and RARCs and a well defined industry process for requesting codes. WPC-EDI.com Before requesting a code, the payer should contact a committee member who can offer guidance the FAQs list representatives for each sector of the industry 13

14 When are the codes updated? CARC requests are reviewed 3 times per year in conjunction with the ASC X12 Standing meetings. January, June, and September The results of the Codes Committee meetings are published 30 days after the meeting, including the updated code list RARC requests are reviewed monthly by a committee of CMS representatives Results published 3 times per year around the same time as the CARC codes, including the code list Group codes are included in the 835 TR3 Changes included when a new version of the TR3 is published 14

15 When are the codes updated? The TR2 document is updated based upon the results of the Codes Committee meetings NCPDP reject codes are updated quarterly in conjunction with NCPDP workgroup meetings. New codes are requested on the NCPDP site: 15

CAQH CORE 360 Rule & CORE Code Combinations Why was This Needed?

of the CARCs, RARCs and CAGCs: There was extensive confusion throughout the healthcare industry regarding the use of these

Providers did not receive the same uniform and consistent CARC/RARC/CAGC combinations from all health plans, resulting in

Providers were challenged to understand the hundreds of different CARC/RARC/CAGC combinations, which can vary based upon

17 CAQH CORE 360 Rule & CORE Code Combinations Why was This Needed? The healthcare industry determined an operating rule was needed to establish requirements for the consistent and uniform use of the CARCs, RARCs and CAGCs: There was extensive confusion throughout the healthcare industry regarding the use of these codes. Providers did not receive the same uniform and consistent CARC/RARC/CAGC combinations from all health plans, resulting in manual intervention. Providers were challenged to understand the hundreds of different CARC/RARC/CAGC combinations, which can vary based upon health plans internal proprietary codes and business scenarios. Decisions regarding the appropriate CARC and/or RARC to explain a claim payment denial or adjustment situation were left to the health plans, lending a high level of subjectivity and interpretation to the process. As the codes are updated three times a year, many plans and providers were not using the most current codes and/or continued to use deactivated codes. 17

18 CORE Code Combinations Maintenance Body of Work 18

19 CORE Code Combinations Maintenance CORE Code Combinations Task Group (CCTG) Responsible for ongoing review and adjustment of the CORE Code Combinations via the Code Combinations Maintenance Process. Composed of over 40 CAQH CORE Participating Organizations from a wide variety of stakeholder types; led by four multi-stakeholder co-chairs: Shannon Baber, UW Medicine. Heather Morgan, Aetna. Lynn Franco, UnitedHealth Group. Erica Zendel, Change Healthcare. Recently Completed STATUS Upcoming Compliance-based Review in response to code list updates published July 3 rd. Updated CORE Code Combinations v3.4.1 published October 5 th. Compliance-based Review in response to code list updates to be published November 1 st. Collection of industry submissions of potential adjustments for 2017 Market-based Review (online survey launching mid-q4). core@caqh.org to join. 19

CAQH CORE 360 Rule & CORE Code Combinations Health Plan Conformance Requirements Per the CAQH CORE 360 Rule, a Health Plan (or its PBM Agent): Must align its internal codes and system mappings to the

CLAIM Must use a CORE Code Combination to report a claim payment denial or adjustment situation that fits into one of the COREdefined Business Scenarios.

, CARCs, RARCs, etc.) in the CORE Code Combinations in non- CORE business scenarios.

20 CAQH CORE 360 Rule & CORE Code Combinations Health Plan Conformance Requirements Per the CAQH CORE 360 Rule, a Health Plan (or its PBM Agent): Must align its internal codes and system mappings to the CORE-defined Business Scenarios, and associated CORE Code Combinations. CLAIM Must use a CORE Code Combination to report a claim payment denial or adjustment situation that fits into one of the COREdefined Business Scenarios. May develop additional business scenarios, and associated code combinations, when the CORE-defined Business Scenarios do not meet its business needs. May use any individual codes (e.g., CARCs, RARCs, etc.) in the CORE Code Combinations in non- CORE business scenarios. No additional code combinations beyond the CORE-required maximum set are allowed for use with the CORE-defined Business Scenarios. Any additional (non-core) business scenarios or code combinations must not conflict with the CORE-defined Business Scenarios or the CORE Code Combinations. Intent of the CAQH CORE 360 Rule is that all CARCs should be mapped to a single claim denial/adjustment business scenario in order to promote uniform and consistent CARC use across the industry. Highlighted in the evaluation criteria used by the CCTG to evaluate potential adjustments to the CORE Code Combinations, criteria include that Each [CORE-required] CARC must be used with only one CORE-defined Business Scenario. 20

CAQH CORE 360 Rule & CORE Code Combinations Health Plan Conformance Requirements cont d CAQH CORE 360 Rule & CORE Code Combinations DO NOT: Include all CARCs and RARCs in the standard code lists;

21 CAQH CORE 360 Rule & CORE Code Combinations Health Plan Conformance Requirements cont d CAQH CORE 360 Rule & CORE Code Combinations DO NOT: Include all CARCs and RARCs in the standard code lists; CORE Code Combinations include only CARCs and RARCs that apply to the CORE-defined Business Scenarios. Require health plans to alter their internal system mappings or usage for CARCs, RARCs or CAGCs not included in the CORE Code Combinations. Address use of informational Alert RARCs; health plans may use Alert RARCs as they deem necessary in addition to the CORE Code Combinations.* *NOTE: Per the Washington Publishing Company (WPC), Alert RARCs, convey information about remittance processing and are never related to a specific adjustment or CARC. The CORE Code Combinations address only Supplemental RARCs which provide additional explanation for an adjustment already described by a CARC. 21

22 CAQH CORE 360 Rule & CORE Code Combinations Product Vendor Conformance Requirements CAQH CORE 360 Rule requires provider-facing vendor products extracting data from the X12N v for manual processing to display to the end user*: 1. Text describing the CARC, RARC and CAGC included in the remittance advice; text must accurately represent code descriptions specified in the standard lists without changing meaning and intent. 2. Text describing the corresponding CORE-defined Claim Adjustment/Denial Business Scenario. Vendor products should provide text using the code descriptions in the published code lists and scenario descriptions provided in the CAQH CORE 360 Rule. For descriptions of the CORE-defined Business Scenarios, see: Table in the CAQH CORE 360 Rule. For descriptions of the CARCs and RARCs, see: Washington Publishing Company CARC List and RARC List. For descriptions of the CAGCs, see: ASC X12N v Technical Report Type 3. *NOTE: As referenced in the CAQH CORE 360 Rule, manual processing refers to any data processing conducted via human manipulation. This reference includes any manual intervention by a human that is required to post the X12N v to the provider s Practice Management System (PMS). 22

23 CORE Code Combinations Maintenance Additional Resources How can I find information about implementing the CAQH CORE 360 Rule? For guidance on the CAQH CORE 360 Rule and CORE Code Combinations, access the CAQH CORE FAQs -- See the CAQH CORE Education & Implementation Resource Center -- Where can I find the latest information about maintenance of the CORE Code Combinations? Go to the dedicated CORE Code Combinations Maintenance webpage -- ongoing-maintenance-core-code-combinations-caqh-core- 360-rule. What if I have any other questions? If you need additional assistance, please contact us at CORE@caqh.org. 23

24 How should a payer create a maintenance process? Develop an internal committee to maintain the code mapping Policy, Legal, Bilingual, Claims, Remittance staff Establish meetings for 3 times per year March, August, November to coordinate with CARC and RARC codes updates Payer can purchase a subscription service from WPC-EDI that will explain all the changes to these lists: modifications/ adds/deletes Payer should pull any changes that CAQH CORE may have made to include the review. Review the changed items against the existing mapping Ensure that any language changes do not change the use of the code. Review new codes for better matching to codes that already have been mapped Review deleted codes to determine new mappings The deactivation date is usually 6 months from the Codes Committee meeting The TR2 will provide guidance for new mappings Notify providers of changes made to code mapping 24

25 Lifecycle of a Payer s Code mapping Initial Mapping Code Updates Maintenance Committee Update Mapping Notify Providers 3 Times per year WPC-EDI offers a subscription service to provide all the changes 25

26 Where do I go if I have a question? CAQH CORE Code combinations - core@caqh.org CARCs or code combinations that are outside of the CAQH CORE Code combinations codes-help@x12.org TR2 - codes-help@x12.org 26

27 Key facts There are lots of code combinations to choose from The Operating Rules only limit the code combination use when the code fits into one of the defined 4 business scenarios With other business scenarios, any CARC /RARC combination can be used The TR2 is the encyclopedia of all the code combinations and will help the payer map codes more quickly and to better combinations. If the payer does not find a code combination that fits the need, a new code can be requested. If the payer thinks a code combination belongs in a CAQH CORE scenario, it can be requested Maintaining the code changes will save time for both payer and provider in the long run 27

28 Questions? 28

Phase III CORE 360 Uniform Use of Claim Adjustment Reason Codes and Remittance Advice Remark Codes (835) Rule version 3.0.

Phase III CORE 360 Uniform Use of Claim Adjustment Reason Codes and Remittance Advice Remark Codes (835) Rule *NOTE: This document is not the most current version of the CORE Code Combinations. The current