Update on the Inpatient Claims Review Process

Date: August 30, 2023

Attention: Hospital Providers and Inpatient Facilities for All Lines of Business

The purpose of this communication is to provide information related to prepayment claims review. As communicated in a previous Provider Alert, Texas Children’s Health Plan (TCHP) has engaged Optum Health to perform routine prepayment claims reviews. As a result, providers may be required to submit medical records and itemized billing statements that support the charges billed and are encouraged to submit this information upon original submission of the claim.

The prepayment claims review will focus on select diagnosis-related group (DRG) and percent of charges inpatient claims. Optum Health will perform a comparative analysis of itemized billing statements and supporting medical record documentation for appropriatenessof charges to verify accurate reimbursement of claims.

How to Submit Medical Records and Itemized Bills

The requested information may be provided by visiting the HIPAA Secure share file system FacilityDrop.com to submit electronically, or it may be sent via fax or mail to:

Attn: Optum Health

c/o Texas Children's Health Plan

16350 Bake Pkwy.

Irvine, CA 92618

Fax: (949) 315-7942

Please provide the complete itemized statement/bill and medical record, including the following:

Please ensure you provide the above-requested information within 30 days of receiving the letter from Optum Health. If the requested records are not received within 30 days of the date of the letter received, TCHP will consider the claim as deficient.

DRG Reimbursement Methodology

Inpatient, DRG outlier claims, with an expected payable amount equal to or greater than $100,000, will require a medical record and itemized statement to be submitted for claim adjudication. If your claim is subject to a DRG reimbursement methodology, then upon receipt of the initial claim, TCHP will pay the base DRG payment and pend payment of the outlier portion of this claim with remark code CO 252, N26, and/or M127. Please note the code descriptions referenced at the bottom of this alert.

Once requested information has been received, submitted charges found to be inappropriately billed will be denied and/or adjusted with remark code OA 216 and N421.

After the review and final adjudication of the claim, a findings letter will be sent to you, at the address on record, along with any additional reimbursement due. Failure to produce the above-requested records in a timely manner will result in denial of the claim as deficient, and a recoupment of the initial base DRG payment.

Billed Charges Reimbursement Methodology

Inpatient claims that are reimbursed under a percent of charge methodology will be reviewed based on a $100,000 charge amount rather than allowed amount. When a medical record and itemized statement for a claim is not submitted with the UB-04 record, Optum will contact the provider to obtain the documentation.

If the required documentation cannot be obtained within 30 days, the entire claim will be denied as CO 252, N26 and M127. If a provider receives such a denial, the claim may be appealed following the standard appeals process, within 120 days of the denial.

Upon receipt of the medical record and itemized statement/bill, a line-item review of the claim will be conducted to determine that all charges are appropriately billed. Submitted charges found to be inappropriately billed will be denied and/or adjusted with remark code OA 216 and N421.

A findings letter will be sent to the provider to the address on record upon completion of the review and adjudication of the claim.

The review will be completed within 30 days of receiving the required information. If the provider receives a partial or complete denial, the claim may be appealed following the standard appeals process.

In closing, providers are advised to proactively take action and submit their documentation timely. 

References:

• Provider Alert: Inpatient Prepayment Review Program
• Codes referenced:

If you have any questions, please email Provider Relations at: providerrelations@texaschildrens.org.

For access to all provider alerts,log into:
www.thecheckup.org or www.texaschildrenshealthplan.org/for-providers.