Guidance on Claiming Commercial Insurance for Early Intervention Services

EIP Memorandum 2003-2 - Table of Contents

  1. Why must a municipality seek reimbursement from commercial insurance and Medicaid?
  2. What is the benefit of billing commercial insurance and Medicaid to the municipality?
  3. How does subrogation work?
  4. What should a municipality do if there is no response from an insurer regarding subrogation and insurance provisions?
  5. What are the responsibilities of service coordinators related to commercial insurance billing?
  6. What happens if the family does not have any health insurance and is not enrolled in Medicaid?
  7. What are the responsibilities of parents related to commercial insurance and Medicaid?
  8. What are the protections in public health and insurance law for parents when insurance is used to reimburse covered services provided under the Early Intervention Program?
  9. How should co-payments and deductibles be handled?
  10. What if a parent refuses to provide information about their commercial insurance or Medicaid status?
  11. Can a parent volunteer to use his or her insurance for early intervention services if the parent's policy is not subject to the Insurance Law?
  12. What are the responsibilities of early intervention providers related to commercial insurance and Medicaid claiming?
  13. What types of early intervention services should be claimed to insurance carriers?
  14. Are there standard benefits for children who are insured through the Child Health Plus B Program (CHP)?
  15. How does "medical necessity" relate to early intervention services?
  16. When should an appeals process be pursued?
  17. What other issues might affect insurance reimbursement for early intervention services?
    Provider Qualifications
    Duration of a Child's Condition
    Location of Service
    Use of Participating Providers
    Referral by a Primary Health Care Provider
    Prior Authorization for Certain Services
  18. What procedures should be used by the municipality to submit claims to insurers and Medicaid?
    Claims Format
    Claims Submission Process
  19. What procedures should be used for tracking and follow-up on claims to insurance carriers?
  20. Are commercial insurers required to reimburse municipalities at the rates set by New York State for the Early Intervention Program?
  21. What documentation must be maintained in a child's record regarding the claiming of insurance for audit purposes?
  22. What follow-up is necessary if a claim is denied by an insurance carrier?
  23. At what point is it appropriate to consider insurance unavailable and submit a claim to the Department for state reimbursement?
  24. When should a complaint be submitted to the Superintendent of Insurance?
  25. When should technical assistance be requested from the State Insurance Department?
  26. How should requests for technical assistance and complaints be submitted to the State Insurance Department?
  27. What procedure should be used when a municipality receives payment from commercial insurance or Medicaid after the claim has been submitted to and/or reimbursed by the State?

Memorandum 2003-2

TO: Early Intervention Officials
Approved Evaluators, Providers, and Service Coordinators
Families
Other Interested Partie
FROM: Early Intervention Program
DATE: June 2003
SUBJECT: Guidance on Claiming Commercial Insurance for Early Intervention Services

The purpose of this memorandum is to provide guidance on claiming commercial insurance for early intervention services delivered to eligible children and their families who are insured and whose insurance policies are subject to New York State Insurance Law. Requirements for submission of claims to Medicaid are also briefly reviewed; however, the primary focus of this guidance document is on claiming commercial insurance. Commercial insurance is defined as health insurance coverage issued by insurance companies, HMOs and corporations organized under Article 43 of the Insurance Law.

Background

Maximizing third party payments, including both Medicaid and commercial insurance, is an important founding principle of both the Federal Individuals with Disabilities Education Act (IDEA) and New York State Public Health Law requirements governing the Early Intervention Program. IDEA requires the state lead agency for the Early Intervention Program to identify and coordinate all available resources for early intervention services within the state, including those from federal, state, local, and private resources.1 Provisions at Section 2543, 2552, and 2559 of Title II-A of Article 25 of Public Health Law, Section 3235-a of the Insurance Law, and 10 NYCRR Section 69-4.22 specify the following requirements pertaining to third party insurance and Medicaid:

  • Costs incurred for early intervention services provided to an eligible child also enrolled in Medicaid are considered to be medical assistance for the purposes of payments to providers and state reimbursement.2
  • Municipalities are deemed the "provider" of early intervention services and transportation services and must seek payment from Medicaid and commercial insurance in the first instance and prior to submitting a claim for reimbursement for the state share of costs for these services.3
  • Requires parents to provide and the Early Intervention Official to collect information or documentation as is necessary and sufficient to determine the eligible child's third party payor coverage and to seek reimbursement from all third party payors, including the medical assistance program or other governmental agency payors.4
  • Requires early intervention officials to require an eligible child's parent to furnish the parents' and eligible child's social security number for the purposes of the Department's and municipality's administration of the program.5
  • Direct providers of early intervention services must provide to the municipality adequate and complete information as necessary to support municipal billing of Medicaid and commercial insurers (see question 12).
  • Removes the municipality's obligation to bill when it has been established that the commercial insurer is not prohibited from applying payment for early intervention services to an annual or lifetime limit specified in the insurance policy and will apply such payment to a lifetime or annual limit (i.e., insurers or insurance policies that are not subject to New York Insurance Law).6
  • Requires public reimbursement for any co-payments or deductibles incurred by parents when their insurance is applied to the payment of early intervention services.7
  • Prohibits a commercial insurance policy from excluding coverage for otherwise covered services solely because the services constitute early intervention program services.8
  • Prohibits insurers subject to the insurance law from applying any payment for early intervention services against any maximum lifetime or annual monetary limits specified in parents' insurance policies. Allows for visit limits to apply provided that visits used for early intervention services will not reduce total visits otherwise available under the policy.9
  • Subrogates the municipality or its designee to parent rights for reimbursement from insurers for payment of early intervention services provided to eligible children and requires the municipality to notify the insurer or plan administrator of its intention to bill insurers for early intervention services provided to the insured child.10

Although requirements to bill commercial insurance and Medicaid have been in effect since the initiation of the Early Intervention Program in 1993, municipalities have experienced difficulty in implementing these requirements, particularly the requirements related to billing of commercial insurers. This guidance document reviews the regulatory requirements pertinent to commercial insurance and Medicaid and responds to frequently asked questions regarding commercial insurance and Medicaid billing.

It is important to note that while the primary responsibility for accessing commercial insurance and Medicaid for early intervention services rests with municipalities, all providers of early intervention services (service coordinators, evaluators, and general service providers), as well as parents, are required to assist municipalities in their important efforts to recoup third party payments.

In addition, commercial health insurers are obligated to ensure that early intervention services are not charged against maximum annual or lifetime monetary limits; must ensure that use of insurance for early intervention services does not reduce the visits otherwise available under the policy; and must, with prior written notice from the municipality, view as valid and enforceable the right of a municipality to be subrogated to the insured's right of reimbursement for services.

1.   Why must a municipality seek reimbursement from commercial insurance and Medicaid?

Section 2559 of PHL and 10 NYCRR Section 69-4.22(a) require municipalities to seek reimbursement from commercial insurance and Medicaid in the first instance and prior to submitting a claim to the Department of Health for the state share of costs related to early intervention services. The only exception to this requirement is for services delivered to children whose family insurance policy is not subject to New York Insurance Law (e.g., employment-based self-insurance or New York residents insured by contracts delivered outside of New York State).11

2.   What is the benefit of billing commercial insurance and Medicaid to the municipality?

Although billing and pursuing commercial insurance is time consuming, any reimbursement obtained from commercial insurers directly reduces the county share for early intervention services.

New York State's Medicaid Plan assures that all early intervention services provided to Medicaid-enrolled children, including special instruction, are reimbursed by Medicaid at the State-approved rates.

Commercial insurance and Medicaid can and should be billed as soon as possible after the county pays the provider's claim for an early intervention service. These sources of reimbursement are not subject to the lag that applies to submission of claims to the Department of Health.

3.   How does subrogation work?

Section 2559(d) of PHL and 10 NYCRR 69-4.22(b) subrogate the municipality or its designee to any rights an eligible child and his or her family may have or be entitled to from third party reimbursement for services covered in their insurance plan to the extent of expenditures by the municipality for early intervention services provided to the child or family. Section 3235-a(c) of the Insurance Law states that a right of subrogation exercised by a municipality under Section 2559 of the Public Health Law is valid and enforceable against the commercial insurer to the extent benefits are available under the insurance policy. This means that the health insurer must accept claims submitted by a municipality, with prior written notice of intent to exercise subrogation rights, for early intervention services paid by the municipality for an eligible child and for which benefits are available to the insured child.

Upon notification by an initial service coordinator of the child's eligibility for benefits from a health insurance plan or benefits plan, the municipality must promptly notify the commercial health insurer of its intent to exercise subrogation rights. Documentation of these actions should be maintained in the child's file (see question 19).

The notification to the child's commercial health insurer should include:

  • Name of eligible child and child's parents.
  • Child/parent's policy number.
  • When issued by the State Insurance Department, the circular letter on requirements on insurers related to reimbursement of services provided under the Early Intervention Program.
  • The early intervention services that will be provided and for which the municipality intends to claim insurance.
  • The name of the child's primary health care provider, if available.
  • The name of an individual to contact within the county with any questions pertaining to the notice.
  • Statement of assignment of benefit.

It is also recommended that the municipality use the subrogation form in Appendix A to request the following information of the insurer:

  • Whether or not the child's policy is subject to New York State Insurance Law.
  • The types of services included in the child's benefit package that are also early intervention services and limits that apply to these services.
  • Requirements pertaining to prior authorization of services.
  • Whether it is necessary to have a referral from the child's primary health care provider for the services.
  • Out-of-network referral procedures.
  • The timeframes required for submission of bills.

It is also recommended that the municipality explain and provide written notification to parents of the intent to exercise subrogation rights under Public Health Law (see Appendix A). The Department and municipalities will work with insurers to agree upon a format for the subrogation notice, including what information insurers can provide about children's benefits packages.

Parents must be informed by their service coordinators about the protections in public health and insurance law that apply to their policies when insurance is used for early intervention purposes (see question 5); and, that in the event an insurer erroneously reimburses them for early intervention services which should have been reimbursed to the municipality, the payment must be returned to the insurer or forwarded to the municipality for handling with the insurer.

4.   What should a municipality do if there is no response from an insurer regarding subrogation and insurance provisions?

It is recommended that the municipality provide the insurer with thirty days to respond to the subrogation notice and request for information regarding the status of the child's insurance coverage. If no response is received within that time frame, the municipality should contact the State Insurance Department (SID) for assistance. The municipality should forward a copy of the subrogation notice by fax to SID at (518) 474-3397 or by mail at the address provided on the last page of this guidance document.

5.   What are the responsibilities of service coordinators related to commercial insurance billing?

12 Initial service coordinators are also responsible for informing parents that:

  • Any deductible or co-payment that results from accessing their insurance for early intervention services will be absorbed by the municipality.
  • Use of third party insurance payment for early intervention services will not be applied against the lifetime or annual monetary limits specified in their insurance policy and will not reduce the number of visits otherwise available under the policy, if the policy or plan is subject to New York State Insurance Law.
  • Insurance will not be accessed by the municipality if the insured's policy or plan is not subject to New York State Insurance Law.13

Initial service coordinators are required to obtain information about the status of the family's third party insurance coverage and Medicaid status. In addition, initial service coordinators must promptly notify the Early Intervention Official of the child's insurance and/or Medicaid status, including:

  • The child's Medicaid Client Identification Number and enrollment status (including the period of Medicaid eligibility and re-certification dates).
  • The type of health insurance policy or health benefit plan, including whether the child is insured through Child Health Plus B.
  • The name of the insurer or plan administrator.
  • The policy or plan identification number (photocopy of both sides of the insurance ID card if possible).
  • The type of coverage extended to the family by the policy.
  • Any additional information necessary for reimbursement (e.g., the name of the child's primary care provider).14

It is recommended that initial service coordinators also request parents to provide their child's social security number to assist municipalities in accessing Medicaid reimbursement, where applicable.

15

It is recommended that the municipality establish and/or use a standardized form (a copy of which should be maintained in the child's file) to collect insurance information from parents, and that the use of this form be required of all initial and ongoing service coordinators, including those employed by or under contract with the municipality.

It is also recommended that this form include an acknowledgement by the parent that s/he understands the municipality intends to exercise its right to subrogation; that the protections in insurance law have been explained; and, that s/he understands that all co-payments and deductibles incurred through the use of their insurance will be absorbed by the municipality.

6.   What happens if the family does not have any health insurance and is not enrolled in Medicaid?

Service coordinators are responsible for assisting parents in identifying and applying for health insurance benefits for which the family may be eligible, including:

  • Medicaid.
  • Child Health Plus B.
  • Social Security Disability Income for purposes of Medicaid.

Documentation must be maintained in the child's file to confirm these efforts have been made.

It is important to note that any direct contact time a service coordinator spends with either a parent or professional related to accessing and enrolling in these programs is considered to be a reimbursable service coordination service by the Early Intervention Program.

It is important for initial service coordinators to be familiar with facilitated enrollment programs for Medicaid/Child Health Plus. Appendix B includes a comprehensive list of facilitated enrollment sites.

7.   What are the responsibilities of parents related to commercial insurance and Medicaid?

Parents must provide, and the Early Intervention Official must collect, such information or documentation as is necessary and sufficient to determine the eligible child's third party payor coverage and to seek payment from all third party payors, including the Medical Assistance Program and other governmental payors.16 The responsibility for collection of such information may be delegated to service coordinators (as currently specified in Early Intervention Program regulations).

Early Intervention Officials also must require parents to furnish their social security numbers and the social security number of their eligible child to assist in the Department's and the municipality's administration of the Early Intervention Program.

Once commercial insurance information is provided to the municipality, the municipality must pursue subrogation as described above and bill commercial insurance for early intervention services covered in the child's benefit plan. Parents cannot refuse municipalities the right to bill insurance in this manner.

8.   What are the protections in public health and insurance law for parents when insurance is used to reimburse covered services provided under the Early Intervention Program?

When the child's insurance policy is subject to the Insurance Law, the following protections are afforded to parents when insurance is used to reimburse covered services provided under the Early Intervention Program:

  • Payment for early intervention services cannot be applied to the lifetime and annual monetary caps on the child/family's insurance policy.
  • Parents cannot be asked to pay co-payments and deductibles (these costs are covered by the county and state).
  • The visit limitations for covered services may apply to early intervention services; however, use of covered services cannot reduce the number of visits otherwise available under the plan (e.g., if the policy covers 10 visits of physical therapy, and the county is reimbursed for 10 visits of physical therapy used for the purposes of early intervention, the child/family will continue to have 10 visits available for health care purposes – such as services required after surgery or an accident).

9.   How should co-payments and deductibles be handled?

Each municipality is responsible for absorbing all co-payments and deductibles to meet any requirement of an insurance policy or health benefits plan in accessing funds applied to payment for early intervention services. The Department is required to provide State reimbursement at the same level as all other payments by the municipality for early intervention services (e.g., 50% of costs incurred).17

Municipalities must establish procedures to ensure that parents do not make first instance payment for co-payments and deductibles. It is recommended that parents be informed of this policy in writing, including how to handle any bills they may receive from insurers or providers related to co-payments and deductibles.

10. What if a parent refuses to provide information about their commercial insurance or Medicaid status?

It is unlikely that a parent will refuse to provide the required information about insurance and/or Medicaid if the protections in Insurance Law are fully explained in a understandable way. The Department's Early Intervention Program: A Parent's Guide provides an easy-to-understand explanation of the use of insurance and the Department has also supplied municipalities with a letter to parents on the use of insurance (see page 7 and Appendix C).

A family cannot be prohibited from participating in the Early Intervention Program based on a parent's refusal to provide insurance information. If a parent refuses to provide insurance information, the initial service coordinator should explain to the parent that this information must be submitted under Early Intervention Program regulations and should review again the protections in law when insurance is billed for early intervention services. If the parent continues to refuse, the parent should be informed that the municipality is required to notify the State Department of Health of the parent's refusal using the form in Appendix D. The municipality should maintain a copy of the written notification to the State that the parent refused to provide insurance information in the child's record for audit purposes. The municipality is not required to notify the State Department of Health of the parent's refusal, if the parent has supplied documentation from the insurer that the insurance policy is not regulated by New York State and, therefore, is not subject to Insurance Law. Such documentation must be maintained in the child's record for audit purposes.

11. Can a parent volunteer to use his or her insurance for early intervention services if the parent's policy is not subject to the Insurance Law?

Yes. Some parents do wish to use their insurance for purposes of early intervention services, even if their policy is not subject to Insurance Law. Under these circumstances, it is recommended that the municipality obtain a parent consent form to use insurance, which includes a statement that because their insurance is not regulated by Insurance Law, there will be no prohibition on the insurer from applying the early intervention services to the policy's monetary limits or from reducing the number of visits otherwise available. Municipalities must provide for the payment of co-payments and deductibles as with all other parents whose insurance is used for the purposes of early intervention services.

12. What are the responsibilities of early intervention providers related to commercial insurance and Medicaid claiming?

All providers of early intervention services, including service coordinators, evaluators, and general service providers are required to forward, within a reasonable period, all documentation and information necessary to support municipality billing of all third party payors, including Medicaid.18

Necessary documentation for claims to be submitted to insurance for each service delivered to the child include:

  • Recipient identification (name, sex, age)
  • Type of service provided.
  • Date service was rendered.
  • ICD-9 diagnostic code.
  • For individuals that directly provide services under contract with municipalities, their name and license number.
  • When an employee or a subcontractor of an approved agency under contract with the municipality delivered the service, the name and identifying information of the early intervention provider under contract with and billing municipalities for the service at a minimum.

The following information will also be required to be submitted at the time of billing to assist municipalities in securing reimbursement for early intervention services from providers:

  • CPT code for delivered services.
  • For agency providers, the name and license number of the employee or subcontractor who directly delivered the service.

The Department monitoring and audit protocols may include review of bills submitted to municipalities on or after November 1, 2003, to ensure this information is included.

Additional records referring to commercial insurance billing must be maintained by the service provider and made available on request for audit purposes and appeals of insurance denial. In addition to the above, the record must contain:

  • A copy of the child's IFSP.
  • Name and license, certification, or registration number of the professional who directly delivered the service.
  • For each service, a session note describing the nature and extent of services provided, including: recipient's name; date and type of service; length of session; brief description (2-3 sentences) of recipient's progress made by receiving the service; name, title, and signature of the person delivering the service and date the session note was created.
  • Written order or recommendation from specific medical professionals when required for the service being delivered.

13. What types of early intervention services should be claimed to insurance carriers?

Commercial insurance must be claimed for early intervention services reimbursed by the municipality that are included in the child's insurance benefit plan. While Medicaid coverage is provided in the State Medicaid Plan for all early intervention services (including service coordination and special instruction), commercial insurance carriers will only reimburse for certain services.

Commercial insurance coverage is focused primarily on hospital, medical or therapeutic services as opposed to educational or instructional services. Commercial insurance coverage may vary based on the insurance policy purchased by or on behalf of the parent/child.

The services provided by the Early Intervention Program that would most likely also be covered to some extent by commercial insurance are:

  • Physical therapy
  • Occupational therapy
  • Speech therapy
  • Audiology
  • Medical services for evaluation/diagnostic purposes
  • Assistive technology devices (e.g., durable medical equipment, prosthetics, orthotics, braces, hearing aids)
  • Mental Health Services, including psychological and clinical social work services
  • Nursing Services

Municipalities are not responsible for billing insurers for services not covered in a child's benefit plan (including but not limited to special instruction and service coordination services).

14. Are there standard benefits for children who are insured through the Child Health Plus B Program (CHP)?

Yes. The CHP contract covers the following services and supplies that may be provided through the Early Intervention Program:

  • Short term physical and occupational therapy, when ordered by a physician.
  • Speech therapy, if required for a condition amenable to significant clinical improvement within a two-month period, beginning on the first day of therapy.
  • One hearing examination per calendar year, and additional hearing exams, if necessary pursuant to a finding of an auditory deficiency.
  • Hearing aids, including batteries and repairs, if medically necessary.
  • Durable medical equipment, prosthetic appliances, and orthotic devices.
  • Up to 60 mental health visits provided by a certified and/or licensed professional.

Durable medical equipment is defined in the CHP contract as:

Devices and equipment ordered by a practitioner for the treatment of a specific medical condition which:

  • Can withstand repeated use for a protracted period of time.
  • Are primarily and customarily used for medical purposes.
  • Are generally not useful in the absence of illness or injury.
  • Are usually not fitted or fashioned for a particular person's use.

Prosthetic appliances are defined by the contract as "those appliances and devices ordered by a qualified practitioner which replace any missing part of the body."

Orthotic devices are "those devices which are used to support a weak or deformed body member or to restrict or eliminate motion in a diseased or injured part of the body."

In order for early intervention services in a child's IFSP to be reimbursed under CHP, prior approval must be obtained from the child's insurer (see question 17, subsection on prior authorization).

For children known to be insured through Child Health Plus, municipalities should not submit claims for services that are excluded from the CHP benefit package.

15. How does "medical necessity" relate to early intervention services?

Commercial insurers may assess whether a prescribed service is medically necessary before authorizing the service (in a preauthorization situation) or authorizing payment for the service. Such a review may occur before services have begun, while they are ongoing, or after they have been received. The decision as to medical necessity must be made in accordance with the utilization review requirements of the Public Health Law (for HMOs) and Insurance Law (for insurers). Insurers are required to communicate decisions to the insured or insurer's designee (in the case of early intervention, the municipality), within the following timeframes:

  • Approval before services are given – written notice within three business days of receiving all necessary information.
  • For extension or continuation of services already being provided – in writing and by telephone, within one business day of receiving necessary information.
  • For retrospective reviews of services already provided – within 30 days of obtaining all necessary information.

Insurers have individualized documentation requirements to assist them in making a determination concerning whether services in the child's IFSP meet their standard for medical necessity and are reimbursable. The following are examples of documentation that may be required by insurers to determine whether services meet their standard for medical necessity and will be reimbursed:

  • A letter and/or pertinent medical records from the child's primary health care provider and/or other physician specialist or health practitioner, including the results of any diagnostic tests conducted, physical findings, current diagnosis, and treatment recommendations. This information should be available in the child's evaluation report, since a health assessment and diagnosis or developmental problems that determine the child's eligibility for the Early Intervention Program must be included in that report.
  • A physician's order pertaining to early intervention services which require such an order and which are covered benefits under the child's insurance policy. For children in managed care plans, these orders must be obtained from a participating physician, unless otherwise approved by the plan.
  • An evaluation and treatment plan from practitioners (e.g., physical therapists, occupational therapists, speech language pathologists, etc.) and the major outcomes/rehabilitation goals expected to be achieved from treatment.
  • The child's present level of functioning in each developmental domain, including vision and hearing.
  • The specific services for which insurance reimbursement is being requested and the frequency, intensity, and duration (e.g., time period) of these services.
  • The criteria and procedures that will be used to determine whether progress toward major outcomes is being made and whether modifications in service may be needed.

It is also important to note that while the above are consistent with required contents for evaluation reports and the Individualized Family Service Plan, insurers may have differing requirements pertaining to the format and method by which this information must be submitted.19 It is recommended that municipalities work with insurers to agree on the content, format, and method by which documentation must be submitted to assist the insurer with the medical necessity determination.

For information about requests for continuation of payment for services for which initial medical necessity has already been determined and a determination of ongoing medical necessity is needed, please refer to Appendix E which describes the Utilization Review process.

16. When should an appeals process be pursued?

If an insurer denies coverage based on medical necessity, the Public Health Law and Insurance Law require a written denial that sets forth the clinical rational for the denial, appeal instructions, how to obtain the clinical review criteria upon which the decision is based and what additional information is required on appeal.

If an appeal is taken and the decision on appeal is to uphold the denial, the law provides the right to an external review by an independent review agent. Please refer to Appendix E for all timeframes pertaining to and instructions on how to file an external appeal.

To familiarize county designees with the insurance appeals process as it relates to medical necessity, the Department of Health and State Insurance Department are available to provide technical assistance. It is anticipated that counties will be able to pursue the appeals process with limited assistance and when conditions warrant once experience with this process is gained. The State Insurance Department may request that a copy of the appeal be submitted for review to ensure the insurer has complied with State requirements regarding the appeals process. The Department of Health or its designees will be available to consult with municipalities in the development of the clinical approach to the appeal or appeal review.

If the municipality identifies a pattern of routine denials of payment based on medical necessity for all or many children for whom claims are submitted, the municipality should contact the State Insurance Department for follow-up with the insurer as appropriate.

17. What other issues might affect insurance reimbursement for early intervention services?

In addition to medical necessity, insurance reimbursement for early intervention services could be impacted by service provider qualifications, duration of the condition, location of service, use of participating providers, prior authorizations, and progress notes.

Provider Qualifications

Insurance companies will pay for services provided by professionals licensed by New York State in a particular discipline. Social workers may be required to have additional experience in their specialty in order to be a qualified provider for whom reimbursement can be requested. For most medically necessary early intervention services described in question 13 (e.g., physical therapy, occupational therapy, speech therapy), state licensure will be adequate. If an insurer denies payment based on qualifications and the municipality believes the provider is appropriately licensed, certified, or registered, the municipality should contact the State Insurance Department for assistance.

Duration of a Child's Condition

Insurance carriers reimburse for short-term acute care related to a specific diagnosis, with the expectation that treatment will result in significant clinical improvement. It is important for municipalities to request and for providers to provide progress notes for the early intervention services being delivered which includes the clinical gains being made by the child.

If an insurer denies payment due to the chronic nature of a child's condition and because the care is viewed as "maintenance," documentation of the denial must be maintained in the child's record for audit purposes. If the municipality and/or the provider disagree with the insurer's determination, the municipality may file an appeal with the insurer or a complaint with the State Insurance Department.

Location of Service

Some insurance policies impose location restrictions on the delivery of certain types of services. If an insurance carrier requires a written statement regarding the need to provide services in a home or community-based setting, the Individualized Family Service Plan (IFSP) should be submitted. Insurers should be informed that under the Individuals with Disabilities Education Act (IDEA), early intervention services must be provided in natural environments, unless the IFSP justifies the need for services in a program, clinic, or office setting. Insurers should accept the location of services on the IFSP for reimbursement purposes. If the insurer denies payment based on location of services, the municipality should document the denial in the child's record for audit purposes.

Use of Participating Providers

Some health insurance policies allow their members to choose any qualified professional to provide necessary services. Health Maintenance Organizations (HMO) often require members to use professionals who are participating in an approved network. There are also insurance policies that use a PPO (Preferred Provider Organization) or an EPO (Exclusive Provider Organization). In a PPO, the insurer provides a better benefit (i.e., lower co-payment) when a member uses a provider in the organization's network. In an EPO, the service must be provided by a participating provider, or there is no coverage.

Participating providers of an HMO network have been screened by the HMO or the insurance carrier to ensure they possess the appropriate qualifications and credentials to provide services in a selected discipline. In many instances, the services of a nonparticipating provider will be covered by the insurer. For example, PPO contracts and the POS (point-of-service) contracts of HMOs cover nonparticipating provider services after a deductible and coinsurance. Some plans have referral requirements for use of out-of-network providers. All HMOs must have a mechanism for referring a member out-of-network, when there is no in-network provider capable of rendering care.

If a plan requires a referral to a non-participating provider and the municipality follows the referral procedure and the referral is denied, the referral denial should be documented in the child's record, and the municipality should not bill the insurer for services rendered to the child.

If no specific referral procedure is required for use of out-of-network providers, the insurer should be billed regardless of whether a network provider is accessed by the child and family for early intervention services. If denial of payment is received based on use of a non-participating provider, this should be documented for the child's record and commercial insurance billing for services delivered by that provider may be discontinued.

Referral by a Primary Health Care Provider

Some HMOs require members to obtain a referral from their primary care physician to receive a medical service. If primary care physician referral is required, it is important to obtain this referral for early intervention evaluations and services. It is recommended that the municipality establish procedures for obtaining a primary care provider referral for a multidisciplinary evaluation and/or early intervention services in the child's IFSP that are covered by the child's benefit plan. It is important to note that procedures for seeking a referral from a primary care provider should not impede the federal and State requirement to ensure the development of an IFSP within 45 days of a child's referral to the Early Intervention Program. These procedures could include:

  • Requesting that the parent seek a referral from their primary care provider.
  • Assigning an Early Intervention Official designee the responsibility for seeking these referrals, with parental consent.
  • Assigning service coordinators the responsibility for seeking referrals from their primary care provider, with parental consent.

At the time the commercial insurer is notified of the municipality's intent to exercise its right to subrogation, the municipality should request information in writing from the insurer about prior authorization policies, and maintain copies for audit purposes. When a primary care referral is needed – and even when it is not - initial and ongoing service coordinators and Early Intervention Officials or designees should discuss with parents the role of primary care physician in early intervention services; the importance of informing and involving primary care physicians in children's IFSPs; and, the need for a primary care provider referral for certain early intervention services for insurance purposes.

Prior Authorization for Certain Services

Some insurers require prior authorization for certain services included in a child's benefit plan (see question 15 on medical necessity for time frames that apply to prior authorizations). As mentioned in question 3, it is recommended that counties request information from insurers about the services included in a child's benefit plan which require prior authorization at the time the county provides notice of subrogation. Municipalities should establish a procedure for requesting prior authorization from the insurer for covered services in the child's benefit plan that are included in the Individualized Family Service Plan. These procedures should ensure that efforts to seek prior authorization should not delay the provision of services to eligible children and their families. Such procedures might include:

  • Requiring that prior authorization be sought by the child's service coordinator as part of his or her responsibilities for implementing the Individualized Family Service Plan. Any direct time service coordinators spend in telephone contact with insurers to obtain prior authorization is reimbursable. Service coordinator notes should document these activities and their outcome (e.g., whether or not prior authorization is obtained).
  • Requiring an Early Intervention Official/Designee(s) within the county to be responsible for requesting prior authorization for services included in children's Individualized Family Service Plans. These activities are considered appropriate activities under the Early Intervention Administration contract with the Department of Health.

As noted in question 15, insurers have individualized documentation requirements to assist them in making a determination concerning whether services in the child's IFSP meet their standard for medical necessity and should be authorized for reimbursement. Please see question 15 for examples of verbal or written information that may be required by insurers to determine whether services meet their standard of medical necessity and will be authorized for reimbursement.

It is important to note again that the type of information insurers may require for medical necessity determinations and prior authorization of services is consistent with required contents for evaluation reports and the Individualized Family Service Plan.20

Documentation should be maintained in the child's record that prior authorization was sought and the outcome (approved or denied) for audit purposes.

18. What procedures should be used by the municipality to submit claims to insurers and Medicaid?

Claims to insurance carriers should be submitted promptly after the municipality reimburses the direct provider for early intervention services rendered. Commercial insurance policies will establish a time frame in which to submit a claim.

The following procedures should be used by municipalities when submitting a claim to insurance and Medicaid.

Claims Format

The Health Insurance Claim Form (HCFA) 1500, the universal claim form approved in 1975 by the American Medical Association (AMA), should be used to submit claims for all non-hospital based early intervention services. The Kids Information Data Management System (KIDS) will produce this form automatically once all required data fields are completed. For services provided by hospitals, including outpatient clinic services, the standard form is UB-92.

Claims may be completed and submitted manually or electronically by tape, diskette, wire transfer, digital fax, or personal computer download. KIDS will produce a claim to Medicaid in electronic format. The KIDS User Manual explains how to use KIDS to claim third party reimbursement for early intervention service expenditures.

Claims Submission Process

The following procedures should be followed in submission of claims:

  • The HCFA 1500 or UB-92 form should be properly completed and contain all necessary data.
  • If a paper claim is submitted, there should be no staples or highlighted areas and the bar code at the top of the HCFA 1500 form should not be defaced.
  • Forms should be reviewed for accuracy and completeness.
  • The claiming package should include:
    • The claim forms.
    • Prior authorization or numbers (if applicable).
    • A copy of the State Insurance Department's Circular Letter, when available.
    • A letter of transmittal identifying the municipality as the provider and as subrogated to the parents' insurance, and informing the insurer where to send payments and remittance statements. The letter should remind the insurance carrier/administrator that reimbursement for early intervention services should not be made to the parents.
    • Documentation of medical necessity, if required.

It should be noted that HIPAA requirements, when effective, will require that claims submitted electronically must be submitted in accordance with HIPAA standards.

19. What procedures should be used for tracking and follow-up on claims to insurance carriers?

Section 3224-a of the Insurance Law requires the insurance company to pay clean claims within 45 days of receipt.

If no response is received within 45 days, the municipality should contact the insurer to verify that the claim has been received, and that the insurer does not require additional documentation.

If the claim was received and no additional documentation was required, or if additional documentation was required and supplied, but no claims determination has been made, the municipality should file a Prompt Payment complaint with the New York State Insurance Department. To file a complaint, the municipality should complete the complaint form, which can be accessed on the State Insurance Department's website, at www.dfs.ny.gov and should include a copy of the claim form being referenced. Upon receipt by the Insurance Department, an acknowledgement letter will be sent to the municipality. A resolution to the inquiry can be expected within approximately four months.

To access the Prompt Payment Complaint:

From the Department Home Page located at www.dfs.ny.gov:

  • Click on the "Consumer" Button.
  • Click on "How to File a Complaint or Make an Inquiry Using Our Online form" bullet.
  • On the Consumer Complaint Application page, click on the "Prompt Payment Complaint" button.
  • Click on the sentence - If you are health care provider filing a Prompt Payment Complaint click here.

Section 3234 of State Insurance Law requires insurers to provide an explanation of benefits (EOB) when a claim is filed. The EOB must include:

  • Provider identification.
  • Service identification and date.
  • Amount billed.
  • Amount payable.
  • Specific explanation of denial, reduction or other reason for not providing full benefits.
  • Phone number and address for questions.
  • Appeal process.

The EOB provides valuable information to maximize health insurance coverage while minimizing efforts, including:

  • Exhaustion of benefits: a rejection that indicates benefits for the service have been exhausted.
  • Changes in coverage: information that coverage has been terminated or changed.
  • Application toward deductible: a code that indicates benefits for the service will not be paid and are being applied to the individual's deductible. Once the deductible is met, services become reimbursable up to the coverage limits of the policy.

Prepaid Health Services Plans (PHSPs), including some Child Health Plus plans, do not routinely issue EOBs to their members. Instead, PHSPs issue remittance advices to providers in response to submission of claims. PHSPs should issue remittance advices to municipalities when the municipality exercises its subrogation rights for children in the Early Intervention Program. If a PHSP does not issue a remittance advice to the municipality on a timely basis, then a complaint should be filed pursuant to the Prompt Pay Law with the State Insurance Department as describe above.

20. Are commercial insurers required to reimburse municipalities at the rates set by New York State for the Early Intervention Program?

There is nothing in law or regulation to require commercial insurers to reimburse municipalities at the rates set by the Department and approved by the Division of Budget for early intervention services. Insurers will generally pay at the rates agreed to by the participating providers in their contracts. Nonparticipating providers will be reimbursed in accordance with the policies established by the insurer for nonparticipating provider claims. Such reimbursement may be based on the usual and customary fee, a fee schedule established by the insurer or an amount negotiated with the insurer.

21. What documentation must be maintained in a child's record regarding the claiming of insurance for audit purposes?

Sufficient documentation should be maintained in a child's record to: (1) demonstrate that an effort has been made to obtain Medicaid and commercial insurance coverage information from the child's parents and, where appropriate, assist the family in obtaining Medicaid/Child Health Plus or other public benefits programs; (2) ensure the municipality has appropriately billed Medicaid; and, (3) and, ensure the municipality has made an effort to bill insurance for services most likely covered to some extent (see question 13).

The following documentation should be maintained to demonstrate that an effort has been made to obtain coverage information from the child's parents and/or assist the family in accessing Medicaid/Child Health Plus or other public benefits programs:

  • The presence of all information in the child's record that is required to be obtained from the parent(s) by the child's initial service coordinator (and updated by the ongoing service coordinator) regarding status of Medicaid and commercial insurance coverage (see question 5).21
  • If applicable, a copy of the written notification to the Department of the parent's refusal to provide insurance information (except where the parent has supplied documentation to the municipality from the insurer that the insurance policy is not subject to the Insurance Law).
  • Documentation in service coordination log notes in the child's record that the service coordinator attempted to assist the parent(s) to enroll in Medicaid/Child Health Plus or other public benefits programs (e.g., a referral to a facilitated enroller).

To demonstrate that the municipality has billed Medicaid, Medicaid remittances should be maintained on file and entered into KIDS.

The optimal documentation that an insurer has been billed is the EOB, payment, remittance advices or written denial of payment or eligibility by the insurer. In the absence of an EOB, payment, remittance advice or written denial from an insurer, the municipality should submit a prompt payment complaint to the State Insurance Department and maintain documentation of the prompt pay submission. A copy of the claim must be submitted with the prompt pay complaint form.

If a municipality has the ability to directly bill commercial insurers electronically, records must be maintained electronically in the KIDS system (e.g., electronic records of transmittals that can be printed if necessary for audit purposes).

If the municipality uses a billing service to pursue reimbursements from third party plans, the municipality is responsible for ensuring that the billing service complies with the requirement to pursue third party reimbursement prior to billing the Department. The municipality must maintain records noted above if the municipality submits hard copy (rather than electronic) records to the billing service for action. If records are submitted to a billing service electronically, there must be an electronic record of the documents transmitted to the billing service. When billing third party carriers, billing services must maintain records, either hard copy or electronic, that meets the requirements described above.

22. What follow-up is necessary if a claim is denied by an insurance carrier?

Claims can be denied for technical errors or for medical coverage/policy issues.

Technical errors include:

  • Incorrect policy numbers.
  • Incorrect procedure codes.
  • Incorrect or missing diagnoses.
  • Incorrect dates of service.
  • Duplicate dates of service.

Technical errors should be corrected and claims resubmitted. Documentation of resubmission should be maintained in the child's record. Claims rejected due to technical errors should continue to be submitted until all technical errors are corrected.

Medical coverage and/or policy rejections include:

  • Non-covered service.
  • The child's coverage was terminated before services were provided.
  • Prior authorization was sought and denied by the insurer.
  • Policy limits have been reached (e.g., the coverage for a given service(s) has been exhausted through reimbursement of covered services delivered under the Early Intervention Program up to the visit limits (the child may continue to have benefits available for health care purposes; see question 8).
  • Out of network provider.

If claims are rejected for any of the above reasons, it is not necessary to resubmit the claim. The EOB or remittance advice with rejection notification should be retained in the child's record, and a claim should be submitted to the Department for state reimbursement.

If the municipality believes that a claim was inappropriately denied for reasons other than medical necessity or was paid at less than the allowable fee after co-payments and deductibles are considered, it is recommended that a complaint be filed with the State Insurance Department. The complaint should:

  • be in writing;
  • document the reason why the municipality believes the denial was inappropriate; and,
  • request the assistance of the State Insurance Department in following up with the insurer.

All documentation related to complaints submitted to the State Insurance Department should be maintained for audit purposes.

23. At what point is it appropriate to consider insurance unavailable and submit a claim to the Department for state reimbursement?

Insurance can be considered unavailable and claims should be submitted to the Department for state reimbursement under circumstances including but not limited to:

  • The insurance policy is not subject to the Insurance Law.
  • Insurance benefits have been exhausted through reimbursement of covered services delivered under the Early Intervention Program up to the visit limits (the child may continue to have benefits available for health care purposes; see question 8).
  • Coverage was terminated before the service was provided.
  • Payment is denied by the insurer for use of an out-of-network provider (HMO) when appropriate referral procedures have been followed.
  • A blanket rejection to pay for early intervention services has been received from the insurance carrier and a complaint has been filed with the Superintendent of Insurance.
  • The benefits available to the child do not include the type of early intervention service provided (e.g., special instruction, service coordination; see question 9).

It is important to note that documentation of these circumstances should be maintained in individual child records or otherwise on file within the municipality for audit purposes.

24. When should a complaint be submitted to the Superintendent of Insurance?

The State Insurance Department is responsible for handling consumer complaints related to insurance. In addition, insurance companies are rated by the number of complaints received from consumers pertaining to their practices.

The following are some instances the municipality should submit a complaint to the Superintendent of Insurance (with a copy to the Department's Division of Family Health Early Intervention Program and Fiscal Unit regarding claims for early intervention services).

  • A claim was improperly denied (e.g., denial based upon the existence of a public program, services are experimental).
  • A claim is settled for less than an appropriate amount.
  • Delays in the settlement of a claim.
  • Illegal cancellation of a policy.
  • Two companies cannot decide which is primary.
  • The municipality has notified the carrier of its intent to exercise subrogation and payment is made to the parent instead of the municipality.
  • The carrier applies payments for early intervention services to a family's lifetime or annual limits.

The Superintendent of Insurance will notify the insurance company of the complaint and assess whether the State Insurance Department can do anything to resolve the problem between the municipality or parent and the carrier.

25. When should technical assistance be requested from the State Insurance Department?

The State Insurance Department will provide technical assistance on matters relating to NYS Insurance Law requirements, insurer requirements and the portions of the guidance document that relate to NYS Insurance Law.

26. How should requests for technical assistance and complaints be submitted to the State Insurance Department?

Municipalities may contact the State Insurance Department in writing or by E-mail to request technical assistance.

Complaint letters submitted to the State Insurance Department should include the following information:

  • Name, address, and telephone number of the complainant.
  • The policyholder's name, address, and telephone number.
  • The insurance company's name and address.
  • Policy period.
  • Policy or claim number.
  • Date of services within the claim.
  • Statement of the complaint, including copies of the claims and any correspondence with the insurance company.
  • A copy of the municipality's notice of subrogation.

27. What procedure should be used when a municipality receives payment from commercial insurance or Medicaid after the claim has been submitted to and/or reimbursed by the State?

If a payment from a third party payor (either Medicaid or commercial insurance carrier) is received after a claim has been submitted and/or reimbursed by the State, the municipality should complete and submit an adjustment disk (see attached letter from the Department regarding this process).

<For more information about the New York State Early Intervention Program and Public Health Law requirements, contact:

New York State Early Intervention Program
Room 287 Corning Tower Building
Empire State Plaza
Albany, New York 12237-0618
Phone: 518-473-7016
Fax: 518-486-1090
E-mail: bei@health.state.ny.us

<For more information about the New York State Insurance Department and applicable State insurance laws and policies, contact:

New York State Insurance Department
Empire State Plaza
1 Commerce Plaza
Albany, New York 12257
Phone: 518-473-7470
E-mail: health@dfs.ny.gov

Attachments

Footnotes

1 34 CFR § 303.522, Identification and coordination of resources
2 NYS PHL§ 2559(2)
3 NYS PHL § 2559(3)(a)
4 NYS PHL § 2543(3)
5 NYS PHL § 2542(4)
6 NYS PHL § 2559(3)(a)
7 NYS PHL § 2559(3)(b)
8 NYS IL§ 3235(a), as added by C.1 of the Laws of 2002
9 NYS IL§ 3235(a), as added by C.1 of the Laws of 2002
10 NYS PHL § 2559(3)(d)
11 NYS PHL §2559(a)
12 10 NYCRR § 69-4.7(g)
13 10 NYCRR § 69-4.7(g)(1),(2),(3)
14 10 NYCRR § 69-4.7(h)
15 10 NYCRR § 69-4.6 (a)
16 PHL § 2543(3)
17 10 NYCRR § 69-4.22(d)
18 10 NYCRR § 69-4.22(c).
19 10 NYCRR § 69-4.11(10)
20 10 NYCRR § 69-4.11(10)
21 10 NYCRR § 69-4.7(g)