MES Certification Navigator
FM

Manage Provider Recoupment

Accounts Receivable Management

Description

The Manage Provider Recoupment business process manages the determination and recovery of overpayments to providers. The State Medicaid Agency (SMA) initiates provider recoupment upon the discovery of an overpayment, for example, as the result of a provider utilization review audit, receipt of a claims adjustment request, or for situations where provider owes monies to the SMA due to fraud or abuse. The business thread begins with discovering the overpayment, then retrieving claims payment information, initiating the recoupment request, or adjudicating a claims adjustment request, and notifying the provider of audit results via the Manage Provider Communication business process, applying recoupments in the system via the Manage Accounts Receivable Information business process, and monitoring payment history until the provider satisfies the repayment. The SMA collects recoupments via check sent by the provider or credited against future payments for services.

Business Process Template

Trigger events
Environment-based
  • Periodic Provider utilization review audit by the Identify Utilization Anomalies business process is due.
  • Receive adverse action disposition from the Determine Adverse Action Incident business process.
  • Periodic post payment audit by the Identify Utilization Anomalies business process is due.
Interaction-based
  • Adjustment claim by the Process Claim or Process Encounter business processes.
Results
  • Alert sent to notify provider of recoupment request.
  • Alert sent to monitor recoupment activities to Manage Accounts Receivable Information business process.
  • Alert sent to Apply Mass Adjustment business process for retroactive modifications.
  • Tracking information as needed for measuring performance and business activity monitoring.
Business process steps
  • 1. START: Discover overpayment as the result of a routine adjustment request, a provider utilization review, fraud and abuse case, or involvement of a third-party payer.
  • 2. Retrieve claims payment information.
  • 3. Initiate recoupment request.
  • 4. Send alert to notify provider of recoupment request (e.g., amount owed).
  • 5. Negotiate agreed upon method of repayment or recoupment.
  • 6. If applicable, send alert to Apply Mass Adjustment business process for retroactive modifications.
  • 7. END: Send alert to monitor recoupment activities to Manage Accounts Receivable Information business process.
Predecessor processes
Successor processes
Shared data
  • Claims data store including payment information
  • Provider data store including provider network and contract information
  • Plan data store including policy and fee information
  • Health Benefit data store including benefit program and benefit information
  • Member data store including third-party liability information
  • Financial data store including accounts receivable information
  • Compliance Management data store including compliance incident information
Constraints

Policies and procedures differ by state. Integration with state accounting system can greatly affect the state’s ability to track receivables established by the recoupment.

Failures
  • The SMA is unable to agree on amount owed or method of recoupment.
Performance measures
  • Time to complete provider recoupment process: e.g., Real Time response = within ___seconds, Batch Response = within ___hours
  • Accuracy with which recoupments are applied = ___ %
  • Consistency of decisions on suspended claims/encounters = ___%
  • Error rate = ___% or less

Source: CMS MITA 3.0 Business Process Template, Financial Management BPT.pdf, pages 1-3.

Business Capability Model (13 questions)

Each capability question defines five maturity levels, from Level 1 through Level 5.

Business Capability Descriptions

Is the process primarily manual or automatic?
  1. LEVEL 1The process consists primarily of manual activity to accomplish tasks.
  2. LEVEL 2SMA uses a mix of manual and automatic processes to accomplish tasks.
  3. LEVEL 3SMA automates process to the full extent possible within the intrastate.
  4. LEVEL 4SMA automates process to the full extent possible across the interstate.
  5. LEVEL 5SMA automates process to the full extent possible across the nation.
What is the mode of communication?
  1. LEVEL 1SMA sends communications to providers and other payers via telephone, facsimile, and mail.
  2. LEVEL 2Communication to providers and other payers is via telephone, facsimile, and mail; plus, the use of e-mail is increasing and some agencies are sending Accredited Standards Committee (ASC) X12 837 Health Care Claim transactions directly to other payers rather than from payer to provider to request payment.
  3. LEVEL 3SMA uses primarily electronic communications, using paper only as needed to reach individual providers.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and national standards across the interstate.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and national standards across the nation.
How does the State Medicaid Agency requests recoupment of monies in third party liability situations requested?
  1. LEVEL 1SMA accomplishes the recouping of monies in third party liability situations from payer-to-provider rather than payer-to-payer.
  2. LEVEL 2SMA still conducts recouping of monies from payer-to-provider but some payer-to-payer interchanges are taking place.
  3. LEVEL 3Payer-to-payer recoupment processing is the norm with payer-to-provider interchanges the exception.
  4. LEVEL 4SMA conducts payer-to-payer recoupment processing.
  5. LEVEL 5SMA conducts payer-to-payer recoupment processing.
How integrated is the process?
  1. LEVEL 1There is little coordination between the portions of SMA responsible for recoupments: third party liability, program integrity, and accounting.
  2. LEVEL 2There is regular communication and coordination between program integrity, third party liability, recoupments, accounting, and the Medicaid Fraud Control Unit (MFCU).
  3. LEVEL 3SMA integrates overlapping activities between program integrity, recoupments, third party liability, accounting, and the MFCU, and communication is immediate.
  4. LEVEL 4SMA fully integrates the process to the extent possible across the interstate.
  5. LEVEL 5SMA fully integrates the process to the extent possible across the nation.
Does the State Medicaid Agency use standards in the process?
  1. LEVEL 1SMA focuses on meeting compliance thresholds for state and federal regulations using state-specific standards.
  2. LEVEL 2A mix of HIPAA including ASC X12 837 Health Care Claim transactions and state-specific standards are applied.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards for intrastate exchange of information.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for clinical and interstate information exchange.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national exchange of information.
How does the State Medicaid Agency collaborate with other agencies or entities in performing the process?
  1. LEVEL 1Very little collaboration occurs with other agencies to standardize information exchange or business tasks.
  2. LEVEL 2SMA collaborates with other agencies and entities to adopt HIPAA standards and Electronic Data Interchange (EDI) transactions.
  3. LEVEL 3SMA collaborates with other intrastate agencies and entities to adopt national standards, and to develop and share reusable business services.
  4. LEVEL 4SMA collaborates with other interstate agencies and entities to adopt national standards, and to develop and share reusable processes including clinical information.
  5. LEVEL 5SMA collaborates with agencies and entities for national (and international) interoperability improvements that maximize automation of routine operations.

Business Capability Quality: Timeliness of Process

How timely is the end-to-end process?
  1. LEVEL 1Process meets threshold or mandated requirements for timeliness (i.e., the process achieves results within the time specified by law or regulation).
  2. LEVEL 2Process timeliness improves through use of automation. Timeliness exceeds legal requirements.
  3. LEVEL 3Timeliness improves via state and federal collaboration, use of information sharing, standards, and regional information exchange hubs. Timeliness exceeds Level 2.
  4. LEVEL 4Information is available in near real time. Processes that use clinical information result in immediate action, response, and results. SMA has interstate interoperability, which further improves timeliness over Level 3.
  5. LEVEL 5Information is available in real time. Processes improve further through connectivity with other States and with federal agencies. Most processes execute at the point of service. Results are almost immediate.

Business Capability Quality: Data Access and Accuracy

How accurate is the information in the process?
  1. LEVEL 1Use of direct data entry for information collection is manually intensive and susceptible to inconsistent or incorrect information. Stakeholders are unable to rely on information for decision-making.
  2. LEVEL 2HIPAA standard transactions improve accuracy of information but the decision-making process may be erroneous or misleading. Accuracy is higher than at Level 1.
  3. LEVEL 3Automation of information collection increases the reliability of SMA’s internal information. External sources of information use MITA Framework and industry standards for information exchange. Decision-making is automatic using standardized business rules definitions. Accuracy rating is at 99% or higher.
  4. LEVEL 4Automation of information collection increases the reliability of SMA’s internal and external sources of information. SMA adopts MITA Framework and industry standards for information exchange with interstate agencies. Decision-making is automatic using regional standardized business rules definitions. Accuracy rating is at 99% or higher.
  5. LEVEL 5SMA adopts MITA Framework and industry standards for information exchange with national agencies. Decision-making is automatic using national standardized business rules definitions. Accuracy rating is at 99% or higher.
How accessible is the information in the process?
  1. LEVEL 1SMA stores information in disparate systems including paper storage and obtains information manually.
  2. LEVEL 2SMA stores information in disparate systems, but automation and HIPAA standards increase accessibility over Level 1.
  3. LEVEL 3SMA obtains information easily and exchanges with intrastate agencies and entities based on MITA Framework and industry standards. Accessibility is greater than Level 2.
  4. LEVEL 4SMA obtains information easily and exchanges with interstate agencies and entities. Accessibility is greater than Level 3.
  5. LEVEL 5SMA obtains information easily and exchanges with national agencies and entities. Accessibility is greater than Level 4.

Business Capability Quality: Cost Effectiveness

What is the cost of the process compared to the benefits of its results?
  1. LEVEL 1High relative cost due to low number of automatic, standardized tasks.
  2. LEVEL 2Automation improves process and allows focus on exception resolution, improving cost effectiveness ratio over Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards further improving cost effectiveness ratio over Level 2.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for interstate information exchange. SMA increases cost effectiveness ratio over Level 3.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national (and international) information exchange. SMA increases cost effectiveness ratio over level 4.

Business Capability Quality: Effort to Perform; Efficiency

How efficient is the process?
  1. LEVEL 1Process is labor intensive. There is wasted effort or expense to accomplish tasks. Process meets minimum state process guidelines and SMA performance standards. Efficiency is low.
  2. LEVEL 2Automation and state standards increase productivity. Efficiency is higher than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving efficiency to 95% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving efficiency to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving efficiency to 98% or higher.

Business Capability Quality: Accuracy of Process Results

How accurate are the results of the process?
  1. LEVEL 1Manual processes result in greater opportunity for human error. Accuracy is low.
  2. LEVEL 2Automation and standardized business rules definitions reduce error and improve accuracy above Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving accuracy to 99% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving accuracy to 99% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving accuracy to 99% or higher.

Business Capability Quality: Utility or Value to Stakeholders

Does the business process satisfy stakeholders?
  1. LEVEL 1Stakeholders lack confidence in information negatively affecting stakeholder satisfaction with the process.
  2. LEVEL 2Automation and standardization provides clear and useful information. Stakeholder satisfaction is greater than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving stakeholder satisfaction to 90% or higher. SMA uses survey or questionnaire for information collection.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving stakeholder satisfaction to 95% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving stakeholder satisfaction to 98% or higher.

Source: CMS MITA 3.0 Business Capability Model, Financial Management BCM.pdf, pages 1-8.

Other Financial Management processes

Formulate BudgetGenerate Financial ReportManage 1099Manage Accounts Payable DisbursementManage Accounts Payable InformationManage Accounts Receivable FundsManage Accounts Receivable InformationManage Budget InformationManage Capitation PaymentManage Contractor PaymentManage Cost SettlementManage Drug RebateManage Estate RecoveryManage FundManage Incentive PaymentManage Member Financial ParticipationManage TPL RecoveryPrepare Member Premium Invoice