§ 69.43. Insurer payment requirements.
(a) For Part A providers, the payment shall be 110% of the Medicare reimbursement allowance plus, when applicable, the estimated pass-through costs and applicable cost or day outliers which are facility specific as calculated by the intermediaries. An insurer is not required to maintain an open claim file until final settlement of the pass-through costs and outliers. A claim file may be closed upon payment of the estimated pass-through costs and outliers. The estimated pass-through costs should be submitted by the provider at the time of billing. Neither a provider nor an insurer may seek to reopen closed claims or bill upon final settlement of the pass-through costs and outliers. A provider may seek payment for these amounts if an insurer has not paid for the estimated pass-through costs and outliers.
(b) If a Medicare fee schedule exists for out-patient, rehabilitation and physician services, insurers shall pay Part A and B providers at 110%. If the Medicare reimbursement allowance is the Medicare aggregate payment, in areas such as out-patient services, rehabilitation services, and home health care services, payment shall be 110% of the actual cost based upon the cost-to-charge ratios for each ancillary, out-patient, or other reimbursable cost center service utilized by the insured. When an ancillary cost center’s services consist of a combined fee schedule and a blended payment, insurers shall pay 110% of the fee schedule amount plus 110% of the actual cost based upon the cost-to-charge ratio payment for the ancillary cost center. Payment for in-patient rehabilitation services shall consist of the routine cost per diem (room and board) plus the actual cost based upon the cost-to-charge ratio of each ancillary cost center service times 110%. Payment for out-patient rehabilitation services shall be the actual cost based upon the cost-to-charge ratio for each ancillary cost center service times 110%. The costs used to develop these payments shall be based upon the latest audited Medicare cost report for that facility.
(c) An insurer shall pay the provider’s usual and customary charge for services rendered when the charge is less than 110% of the Medicare payment or a different allowance as may be determined under § 69.12(b) (relating to exemption from payment limitations). An insurer shall pay 80% of the provider’s usual and customary charge for services rendered if no Medicare payment exists. In calculating the usual and customary charge, an insurer may utilize the requested payment amount on the provider’s bill for services or the data collected by the carrier or intermediaries to the extent that the data is made available.
(d) An insurer shall provide a complete explanation of the calculations made in computing its determination of the amount payable including whether the calculation is based on 110% of the Medicare payment, 80% of the usual and customary charge or at a different allowance determined by the Commissioner under § 69.12(b). A bill submitted by the provider delineating the services rendered and the information from which a determination could be made by the insurer as to the appropriate payment amount will not be construed as a demand for payment in excess of the permissible payment amount.
Notes of Decisions Amendment
Denial of payment of insured’s medical bills for treatment rendered subsequent to act’s amendment by which the peer review procedure was adopted was proper where insured’s policy, accident and some treatment all preceded the amendment. Frey v. State Farm Mutual Auto Insurance Co., 632 A.2d 930 (Pa. Super. 1993).
Calculation of Payment
In an action by a provider of outpatient rehabilitation services seeking payments for medical services, the insurer was required to reimburse the provider for the difference between the provider’s charges calculated at 110% of the actual cost based upon the cost-to-charge ratio and the amount the provider incorrectly originally billed, which was 80% of the usual and customary charge, where the original payments made by the insurer were not authorized under the law. Med/Aid, Inc. v. State Farm Insurance Co., 38 D. & C. 4th 41 (1997).
Jurisdiction
The court had jurisdiction to conduct a pre-enforcement review of this section since the administrative remedy was unavailable or inadequate and the effect on the party seeking review was direct and immediate. Pennsylvania Association of Rehabilitation Facilities v. Foster, 608 A.2d 613 (Pa. Cmwlth. 1992).
Cross References This section cited in 31 Pa. Code § 69.22 (relating to billing procedures).
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