On June 1, 2001, the Virginia Department of Medical Assistance Services (DMAS) implemented computer systems changes that finally complies with the prudent layperson provisions of the Balanced Budget Act of 1997 (BBA). On this date, claims for emergency services no longer automatically reduce payment based on a diagnosis code. Claims will now either automatically pay at the fee schedule, or will pend for manual review of the medical record and a payment determination.

This announcement by DMAS culminated three years of activity by the Virginia College of Emergency Physicians (VaCEP) engaging DMAS in discussions and meetings to adopt the policies and guidance provided by the Health Care Financing Administration (HCFA) regarding payments for emergency medical services provided to Medicare and Medicaid beneficiaries. In a meeting with us this past April (which included representatives from the VHHA and ACEP Federal Affairs Director, Michelle Fried), DMAS not only announced the date of implementation but also shared the diagnoses lists being utilized to either pay the claim as an emergency, or pend it for manual review.

The two new lists, or "code tables" as DMAS prefers to call them, became effective for claims submitted in June 2001. These lists are available on VaCEP’s website: www.VaCEP.org. Providers have the option of submitting the medical record along with any claims with a diagnosis on the "pend" list, or waiting to submit this record when prompted by DMAS.

At that April meeting, we asked DMAS’ plans to adjust their payment on claims already processed under the old tables, and we were told claims stay in their system for three years from date of submission; this "fact" would make it possible for Providers to review past claims payments and determine whether it would be advantageous to resubmit claims DMAS previously reduced. President Mark Tripp was extremely pleased to share that news in a letter to VaCEP members in May, directing you to our website for details on this "win", the new codes tables and instructions on how to resubmit claims.

Many of you acted quickly on that information, only to be told by DMAS that resubmitting prior claims would not be allowed.

In a letter to VHHA and VaCEP dated June 25, DMAS Deputy Director Mack Brankley explained the department’s position regarding the June changes have been "misinterpreted." The letter states:

"First, it is important that we affirm that the Department of Medical Assistance Services (DMAS) believes it has always been compliant with the prudent layperson requirements as outlined in the balanced Budget Act (BBA). However, we did hear the request of providers that we review our position to ascertain if a less restrictive interpretation of the BBA could be made. Upon review and discussion with the Health Care Financing Administration (HCFA), it was determined that…a less restrictive application of the guidelines would be applied for care rendered on or after June 1, 2001. Also, during the meeting, I understand that you were advised that there are no date edits associated with the diagnosis tables. This is not correct."

What does this mean?

Bottom line: DMAS asserts the payment policy in effect prior to June 1, 2001 was not inappropriate and therefore no re-review of previously submitted claims is warranted. (And where no date edits existed at the time of our April meeting, that is no longer the case.)

In a recent discussion with DMAS staff, we heard that very few emergency provider groups utilize the Appeals process which gives providers 30 days to resubmit claims and documentation to request payment of a claim at the emergency vs. non-emergency rate. (i.e. claims automatically reduced based on the diagnosis code, or pended claims reduced after review). We were told that only two provider groups have been aggressive and consistent in using the appeal process.

Bottom line: DMAS is taking the position that any provider that did not take advantage of the appeals process in the appropriate time frame for claims submitted in the past three years, cannot do so now.

VaCEP will continue to pursue this issue. We believe DMAS was not in compliance with the BBA prior to June 1, 2001. If your practice has documentation of claims submitted through the appeals process that were subsequently denied as emergency services, please contact our office. We will need significant data on downcoded claims to successfully argue that DMAS payment policy for the past three years must be addressed by the state and HCFA, whether this is in the form of a legislative, regulatory or legal battle.

We also need to gather data on pended claims under the new system, that are reduced by DMAS and if your attempt to appeal a claim is unsuccessful, please send us a copy of the claim and your documentation. Our goal is to identify any inappropriate patterns of reducing claims and bring the issue to DMAS’ attention or the legislature if necessary. We are particularly interested if you have pended claims with an E&M visit level of 3, 4 or 5, that are unsuccessfully appealed. With your help, we strive to ensure equitable review of claims and payment for your services.