Understanding Balance Billing

A Primer for L.A. CareContracted Providers

Purpose for this Training

1. With new managed care programs (i.e. CalMediConnect, Covered California, PASC-SEIU), members and providers may notalways be aware of patient costs and feesassociated with these programs

2. Recent reports of balance billing warrantincreased monitoring by health plans

3. Identified need for provider and patienteducation on the prohibition of balancebilling for covered services

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Training Objectives

• This training will provide L.A. Carecontracted providers important regulatoryclarification on balance billing, inclusive ofthe following information:

• What is balance billing?

• Why is balance billing prohibited?

• Steps to take when balance billing occurs.

• How does balance billing breach L.A.Care contracting and violate federal law?

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Guiding Principle

Contracted providerscannot balance bill a

Medi-Cal and orMedicare eligible

beneficiary for anycovered benefit.

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What is Balance Billing?

• Balance billing occurs when doctors,ancillary providers or hospitals chargebeneficiaries for Medi-Cal and/orMedicare covered services.

• Charges can include co-pays, co-insurance, deductibles oradministrative fees.

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Examples of Balance Billing

• Providers charging Medicare and/or Medi-Caleligible members for any covered service.

• Non-contracted or Fee-for-Service providerscharging members who are enrolled inmanaged care for any part of a covered service

• Provider offices charging administrative fees forappointments, completing forms or referrals

• Contracted providers charging managed carepatients to compensate for the differencebetween what they charge cash patients

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When Can a Provider Bill?

• Providers may bill patients who have amonthly Medi-Cal share of cost obligation, butonly until that obligation is met for the month.

• Medicare Part D patients, including CalMediConnect, may have a cost share forsome prescription drugs

• Cost for non-covered benefits

• L.A. Care plans, including L.A. Care Coveredand PASC-SEIU Plans, may require co-paysand co-insurance fees.

Prohibition of Balance Billing*

• Per Federal and State regulations, L.A.Care has included prohibitions onbalance billing in its provider contracts

• Network providers who engage inbalance billing are in breach of theircontract with L.A. Care Health Plan

• Providers who engage in balancebilling may be subject to sanctions byL.A. Care, CMS, DHCS and otherindustry regulators.

*see reference section 8

Ways Providers Can AvoidBalance Billing

• Always verify eligibility, particularly ifthere has been a change in themember’s plan

• Don’t rely on the patient to show youthe right health plan/program card

• When in doubt, call the Provider Groupand/or L.A. Care to verify programeligibility and covered benefits

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Steps to Take When BalanceBilling Occurs1. Tell the member – DO NOT PAY THE

BILL!!

2. Verify eligibility and determine if themember is a Medi-Cal and/or Medicaremember

3. Educate front office staff and billingdepartments about balance billingprotections.

4. Educate patients about their eligibilitystatus and about their rights.

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Step 1: Tell the Member: DONOT Pay The Bill!

• If your office bills a patient in error, theprovider must:• Stop immediately upon proof of

eligibility• Reimburse all erroneous charges if

member has paid• Call off any collection efforts that have

begun• Correct any erroneous information sent

to member and credit reportingagencies

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Step 2. Verifying Eligibility

• Providers are required to verify beneficiary eligibility

• If a provider has questions about an L.A. Carepatient’s eligibility, call L.A. Care at 1-866-522-2736.

• Providers can also verify beneficiary eligibility byaccessing one of the following State eligibilitysystems:

– The Automated Eligibility Verification System(AEVS) interactive voice response system at 1-800-456-AEVS (2387)

– Medi-Cal Website at https://www.medi-cal.ca.gov/eligibility/login.asp User ID (Provider IDor NPI) and password (Provider PIN) required.

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Step 3: Provider Education

• L.A. Care takes balance billing of our members veryseriously.

• Ongoing education and monitoring is beingconducted.

• Provider education

• Provider focused webinars

• Provider newsletters

• Provider website updates

• Contracted provider groups (PPG/IPA) will berequired to educate and train network providers

• Contracted providers are expected to adhere toguidance prohibiting balance billing

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• Member communications have beendeveloped to educate and alert members oftheir right not to be balance billed by anyprovider.

• Member newsletter

• Website updates

• Community forum education

• L.A. Care continuously monitors membercomplaints and grievances related toinappropriate billing practices by contractedand non-contracted providers

Step 4: Member Education

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Provider Responsibilities

1. Always verify eligibility at point of service

2. Do not charge any fee to Medi-Cal and/orMedicare eligible patients for covered benefitsor services

3. Educate office managers, front office staff andbillers on the prohibition of balance billing

4. If unsure, contact contracted Provider Group orL.A. Care to verify eligibility and/or coveredbenefits/services

5. Monitor practice for inappropriate balancebilling

6. React appropriately if balance billing occurs15

Health Plan Responsibilities

1. L.A. Care will educate contracted providersand provider groups on the prohibition ofbalance billing

2. L.A. Care will educate members on their rightnot to pay for covered benefits

3. L.A. Care is obligated to monitor instances ofbalance billing and report offending providersto L.A. Care’s Fraud, Waste and Abuse Dept.

4. For repeat instances, L.A. Care is obligated torefer providers to both DMHC and DHCS’Provider Certification Program

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Guiding Principle

Contracted Providerscannot balance bill a

Medi-Cal and orMedicare eligible

beneficiary for anycovered benefit.

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Reference Section

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Resources and Information*

• More information about balance billing is alsoavailable in the L.A. Care provider manuals athttps://www.lacare.org/providers/provider-resources/provider-manuals

• Also, information about how to process crossoverclaims can be obtained at the L.A. Care ProviderService Line at 1-866-522-2736 and athttp://www.calduals.org/providers/physician-toolkit/

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L.A. Care Contract Language*

Billing Members, State and Federal Government.

In the event Healthplan fails to pay PPG for Provider Servicesrendered to Members pursuant to this Agreement, PPG shallneither (i) hold the State or Federal Government or any agencythereof or any Member liable for any sums owed by Healthplan,nor (ii) maintain any action at law against the State or FederalGovernment or any agency thereof or any Member to collectsums owed by Healthplan. PPG is prohibited from imposing anysurcharges on Members for covered services and if Healthplanreceives notice of any surcharge, Healthplan shall takeappropriate action. PPG shall report to Healthplan in writing allsurcharges paid by Members directly to PPG or its AffiliatedProviders. Except for applicable copayments, PPG shall notinvoice or balance bill a Member for the difference betweenPPG’s billed charges and the reimbursement paid by Healthplanfor a covered benefit.

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Prohibition of Balance Billing*

• L.A. Care Members cannot be balance billed

• Federal and State law prohibits billing Members forcovered services that are not the responsibility ofthe Member

• This prohibition includes co-pays, co-insurance andcompletion of forms:

o Section 1902(n)(3)(B) of the Social Security Act, asmodified by Section 4714 of the Balanced Budget Actof 1997

o Title 22 Medical Assistance Program CCR §51002Beneficiary Billing

o California Welfare & Institutions Code §14019.4

o California Health and Safety Code §1379

o California Health and Safety Code §1262.8

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