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Billing Policy Overview

Revised: 08-23-2017

In a fee-for-service (FFS) delivery system, providers (including billing organizations) bill for each service they provide and receive reimbursement for each covered service based on a predetermined rate. Minnesota Health Care Programs (MHCP) providers and their billing organizations must follow MHCP billing policies as outlined in this section and provider type specific sections of the MHCP Provider Manual for billing services provided to FFS recipients.

MHCP recipients enrolled in a managed care organization (MCO) contracted with MHCP receive their health care services through the MCO. Contact the appropriate MCO to learn about the billing policies for services provided to MCO-enrolled MHCP recipients.

The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires all health care providers and payers to use universal standards for electronic billing and administrative transactions (health care claims, remittance advice [RA], eligibility verification requests, referral authorizations and coordination of benefits). Minnesota’s Uniform Electronic Transactions and Implementation Guide Standards require all Minnesota-based health care claims to be submitted electronically.

This section outlines the following for all MHCP providers:

  • Coordination of Services
  • Free-care Policy
  • General Billing Requirements
  • Timely Billing
  • Coding Schemes
  • MN–ITS and Electronic Billing
  • Billing Organizations/Responsibilities
  • Eligibility Requests and Responses
  • Electronic Claims
  • Reconsideration of a Claim (Appeals vs. New or Replacement)
  • Replacement Claims
  • Void Claims
  • MN–ITS Mailbox
  • Remittance Advice
  • Taxes and 1099 Forms
  • MHCP Reimbursement is Payment in Full
  • Prompt Payment
  • Additional Resources
  • Legal References
  • Please also review the following billing policies for all providers:

  • Billing the Recipient
  • Medicare and Other Insurance
  • Out-of-State Providers
  • Payment Methodology - Hospital
  • Payment Methodology – Non-hospital
  • Subrogation
  • Coordination of Services

    Providers are responsible to ask recipients if they are currently receiving the same health care services from another provider. If the recipient is receiving the same services from another provider, the providers must coordinate the services and document in the recipient's record how the services were coordinated. MHCP will not inform providers of services the recipient is receiving from other providers.

    Free-care Policy

    For dates of service before Dec. 15, 2014, MHCP takes into account all resources available to recipients, including free services. CMS’ “free-care” policy does not reimburse providers for services they give to Medicaid recipients if the same services are offered for free to non-Medicaid patients.

    For dates of service on or after Dec. 15, 2014, MHCP pays for covered services even when the provider offers the same service for free to any other patient. Services must still meet all other MHCP coverage criteria to be eligible for reimbursement.

    General Billing Requirements

    MHCP providers who render or supervise services are responsible for claims submitted to MHCP:

  • • Submit claims only after you provide one or more MHCP-covered service
  • • Bill only for dates of service when services were provided except in the case of EW or AC for environmental accessibility adaptations (EAA) when the payments must be prorated over several months due to EW or AC budgets and is specified on the service authorization
  • • Bill the provider's usual and customary charge
  • • Bill only one calendar month of service per claim
  • • Submit claims electronically
  • Timely Billing

    Follow these requirements for timely billing:

  • • Submit claims correctly, including Medicare crossover and TPL claims, so that MHCP receives them no later than 12 months from the date of service.
  • • Submit replacement claims so that MHCP receives them within six months of the date of incorrect payment, or within 12 months from the date of service, whichever is greater.
  • • Submit Medicare crossover claims that do not automatically cross over so that MHCP receives them within six months of the Medicare determination or adjudication date, or within 12 months of the date of service, whichever is greater.
  • • Resubmit claims MHCP denied erroneously (due to system error or incorrect information from county) within 12 months of the date of service or up to six months from date of county correction, whichever is greater.
  • • Submit claims over one year old with appropriate, dated documentation. See Electronic Claim Attachments for instructions. MHCP will review documentation, but does not guarantee payment.
  • Coding Schemes

    Use applicable HIPAA-compliant codes and follow the most current guidelines. Providers are not required to purchase all of the manuals. Determine which of these manuals are appropriate for the services you provide:

  • CDT: (Current Dental Terminology) Order by contacting American Dental Association at 800-947-4746 or may be purchased from various medical book sources.
  • CPT: (HCPCS Level I: Physicians' Current Procedural Terminology) Contact the American Medical Association at 800-621-8335 or may be purchased from various medical book sources.
  • HCPCS: (Healthcare Common Procedural Coding System) Available online at CMS Alpha-Numeric HCPCS; may also be purchased from various medical book sources.
  • ICD-10-CM: (International Classification of Diseases 9th Revision Clinical Modification) May be purchased from medical book sources. Files also available for download at Classification of Diseases, Functioning, and Disability.
  • NDC: (National Drug Codes) Review the National Drug Code Directory, search NDC.
  • UB-04 Data Specifications Manual: Order by contacting NUBC.
  • Use appropriate HCPCS 2-digit alpha, numeric and alphanumeric modifiers to identify one of the following:

  • • A service or procedure altered by a specific circumstances, but not changed in its definition or code
  • • Rental, lease, purchase, repair or alteration of medical supply
  • • The origin and destination for medical transportation (1-digit alpha codes)
  • HCPCS developed 13 U modifiers for state definition. See Minnesota-defined U Modifiers.

    Bill unlisted procedure codes only when a specific code is not available to define a service or procedure. When billing an unlisted code, include a description defining the service or procedure on electronic claims or send an attachment with a written description or documentation defining the service or procedure (see Electronic Claim Attachments).

    MN–ITS and Electronic Billing

    MN–ITS is MHCP’s free, web-based, HIPAA-compliant system for claim submission, inquiry and other health care transactions. Submit claims through the following:

  • • Submit individual, direct data entry claims through MN–ITS Interactive.
  • • If you use HIPAA-compliant billing software or are a billing organization, submit your transactions through MN–ITS Batch.
  • Providers must register for MN–ITS to perform any of the following functions:

  • • Verify active provider enrollment status
  • • Verify program eligibility for one or more MHCP recipients at one time
  • • Submit authorization requests for medical or dental services or supplies
  • • Submit service agreement (SA) requests for home care services
  • • Retrieve your authorization and service agreement letters
  • • Submit claims (including claims with Medicare or other insurance)
  • • Copy previously submitted MN–ITS claims or replace incorrectly submitted paid claims
  • • Check a claim's paid or denied status
  • • Submit a Pay-for-Performance Results Payment
  • • Retrieve your RAs in your MN–ITS Mailbox
  • Your Welcome Letter includes your initial user ID and password. When you register, you must agree to the EDI Trading Partner Addendum. This addendum augments your existing MHCP Provider Agreement and supersedes any existing MHCP EDI Biller Agreements between you and MCHP.

    All pay-to providers billing through a billing organization (such as a clearinghouse or billing intermediary) must also register for MN–ITS as the provider organization. Providers may assign their billing organization as their MN–ITS administrator, but providers must retain system access to continue to verify eligibility, check the status of their claims and receive their RAs. Providers are responsible for all claims submitted to MHCP and for reconciling their claims.

    Billing Organization Responsibilities

    A provider may not submit claims to MHCP through a factor, which is an individual or entity such as a collection agency or service bureau that advances money to the provider for accounts receivable that the provider has assigned, sold, or transferred to the individual or entity for a fee or for a deduction of a portion of the accounts receivable. Review the Billing Organization/Responsibilities section for additional information.

    Eligibility Requests and Responses

    MHCP requires providers to verify eligibility before they render services and submit claims. Clearinghouses are out of HIPAA compliance if they conduct eligibility (270) or health claim status (276) inquiries on behalf of provider organizations. Use MN–ITS to request recipient eligibility and receive eligibility responses. Verify ID numbers (up to 50) or dates of service up to one year before date of inquiry.

    Eligibility responses include the following information for each recipient:

  • • Major program
  • • Prepaid health plan (MCO enrollment) status, if applicable
  • • Other insurance, third party liability (TPL), or Medicare coverage, if applicable
  • • Special transportation, hospice, living arrangement indicators
  • • Potential copay indicator
  • • Spenddown
  • • Waiver program participation indicator
  • • Restricted recipient indicator, if applicable
  • • Benefit limits (applies to fee-for-service recipients only)
  • • Elderly waiver obligation
  • • Eyeglass payment, if applicable
  • Electronic Claims

    Review your provider type web page for information about claim submissions specific to the services you provide.

    Reconsideration of a Claim

    MHCP FFS does not accept the AUC appeals form that corresponds to the AUC Best Practice due to regulatory requirements (42 CFR 447). Follow this process for reconsideration:

  • 1. Review the WPC HIPAA compliant Claim Adjustment Reason Codes to verify why the claim was denied.
  • 2. Then determine if the claim qualifies for either of the following:
  • • Can be corrected and resubmitted
  • • Meets the MHCP Attachment Criteria to submit an Electronic Claims Attachment (sent within two days of the electronic claim) that includes medical necessity or other forms of documentation that supports the claim
  • 3. If the original claim status is:
  • • Paid; submit a replacement claim
  • • Denied; submit a new (original) claim or a Copy claim
  • Original claims submitted via MN–ITS direct data entry (DDE) can be copied or replaced using the Request Status feature in MN–ITS to display the original claim.

    Replacement Claims

    A replacement claim is a resubmission of an incorrectly paid claim due to a billing error or a third party payment. Submit a replacement claim only in the following circumstances:

  • • When all or some of a claim (including Medicare claims submitted through MN–ITS) is paid incorrectly due to a billing error
  • • When you receive a third party payment after you receive MHCP payment
  • Claims that have been underpaid must be replaced within 12 months of the date of service or six months from the date of payment. Claims that have been overpaid can be replaced or refunded (voided) electronically.

    Replacement claim process



    The claim is within 12 months from the date of service or six months from the original date of payment

    Submit the replacement claim electronically via MN–ITS. Review the Replacement Claim User Guide for instructions

    The claim is over 12 months from the date of service or more than six months from the original date of payment, and your original claim payment was an overpayment due to a billing error or you received other third party payments

    Submit the replacement claim electronically with an ACN and an electronic attachment. See Claim Attachment Criteria sheet

    The claim is over 12 months from the date of service or more than six months from the original date of payment, and your original claim payment was an underpayment due to a billing error

    Your request cannot be processed due to timely filing limitations

    Void Claims

    If you need to return the entire claim payment to MHCP, use MN–ITS to void the claim. The amount will be deducted from a subsequent remittance advice. Claims that are voided after Timely Billing requirements cannot be resubmitted for payment.

    If you need to void a claim because one of the following situations applies, follow the step below:

  • • A claim was originally paid with an MHCP ID (the provider number you used to bill before the NPI or UMPI)
  • • It has been more than three years since you received payment for a claim
  • • The provider to whom the claim was paid is no longer an actively enrolled MHCP provider
  • • The claim is identified as “claim type: gross adj” on your remittance advice (claims display the recipient name, ID and date of service)
  • Follow these steps to void a claim for any of the situations noted above:

  • 1. Collect the following information:
  • • Original payer claim control number
  • • Recipient ID
  • • Date of service
  • • Total charge billed
  • • Total amount paid
  • • Contact name and number
  • 2. Call the MHCP Provider Call Center; a representative will create a work order to review and complete the void process.
  • After the void is completed, MHCP will report RA01 on your RA in the reversal section.

    For a lead agency void request for adjusting service authorizations or agreements, see Void Waiver and Alternative Care (AC) Service Claims.

    Assertive Community Treatment (ACT), adult rehabilitative mentail health services (ARMHS), or day treatment: see Billing in the ACT section (just before chart) for reversal requests due to denial.

    MN–ITS Mailbox

    The start and end dates in MN–ITS Quick Search span a rolling 30-day period (today minus 30 days). As contents build, providers are able to search and retrieve contents. Refer to the MN–ITS Mailbox user guide in the MHCP MN–ITS User Manual for more information and instructions on using the mailbox feature.

    Providers must keep appropriate records according to state and federal retention requirements.

    Remittance Advice (RA)

    HIPAA requires providers and payers to use a standardized electronic RA (X12N 835) transaction. MHCP adopted the HIPAA standards for electronic and paper RAs.

    RAs provide detailed payment information about health care claims and, if applicable, describe why the total original charges are not paid in full. The X12 835 is a financial transaction designed to automatically balance financial accounts. The 835 transaction standards and HIPAA-related adjustment code lists are available through the Washington Publishing Company (WPC).

    Remittance advice information is listed alphabetically by recipient name, unless you request one of the following other remittance sequences upon your initial enrollment with MHCP:

  • • Patient Account or Own Reference Number Order
  • • DHS Transaction Control Number Order
  • • Recipient MHCP ID Number Order
  • To request a sequence change in your RA, call the Provider Call Center and choose option 5 for provider enrollment.

    MHCP-enrolled providers receive their RAs in one of the following formats:

  • • Readable PDF file placed in the provider’s MN–ITS mailbox
  • • X12 835 batch file placed in the provider’s MN–ITS mailbox
  • For reading PDF file RA information, review How to Read Your RA and Remittance Advice (RA) Guide Chart (DHS-7400) (PDF).

    Taxes and 1099 Forms

    MHCP does not withhold taxes, such as Medicare or Social Security, from payments made to providers. IRS 1099 forms are sent to providers by February of the year following payment. DHS sends a 1099 for payments made by paper check. Minnesota Management and Budget (MMB) sends a 1099 for payments made by electronic funds transfer (EFT).

    MHCP Reimbursement is Payment in Full

    A provider must accept MHCP reimbursement as payment in full for covered services provided to a recipient. A provider may not request or accept payment from a recipient, a recipient's relatives, the local human services agency, or any other source, in addition to the amount allowed under MHCP, unless the request is for one of the following:

  • • Spenddown
  • • Copay
  • • Family deductible
  • • Insurance payment that was made directly to the recipient. MHCP is liable for the amount payable by MHCP minus the third-party liability amount
  • Prompt Payment

    MHCP is required to pay or deny clean claims within 30 days and complex claims within 90 days of receipt. Clean claims are MHCP primary claims without attachments. Complex claims are replacement claims, Medicare crossovers, third-party liability claims, claims with information in the notes or comment fields,or claims with attachments.

    Additional Resources

    Refer to the following sections for additional Billing Policy requirements and resources:

  • Authorization
  • Fraud
  • Legal References

    Minnesota Statutes 62Q.75 Prompt Payment Required
    Minnesota Statues 256B.0915, subd 3a
    (c) Elderly waiver cost limits
    Minnesota Statues 256b.0913,
    subd 4 (7) Alternative Care Program- Eligibility for funding for services for nonmedical assistance recipients
    42 CFR 447.10
    Prohibition against reassignment of provider claims
    42 CFR 447.15
    Acceptance of state payment as payment in full
    42 CFR 447.45
    Timely claims payment

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