UNOFFICIAL COPY 25 RS BR 1558
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AN ACT relating to prepayment review of Medicaid claims. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 205 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Department" means the Department for Medicaid Services; and 6
(b) "Managed care organization" has the same meaning as in KRS 205.532. 7
(2) In order to ensure that claims presented by a Medicaid-enrolled provider for 8
payment by the department or a managed care organization meet the 9
requirements of state and federal laws and administrative regulations, including 10
but not limited to medical necessity criteria, a Medicaid-enrolled provider may be 11
subject to prepayment claims review by the department or a managed care 12
organization. 13
(3) A Medicaid-enrolled provider shall only be subjected to prepayment claims review 14
following: 15
(a) Receipt of a credible allegation of waste, fraud, or abuse by the department; 16
(b) Identification of a pattern of uncorrected aberrant billing practices as a 17
result of an investigation conducted by the department or a managed care 18
organization; 19
(c) Failure by the provider to timely, as defined by the department, respond to a 20
request for reasonable documentation made by the department or a 21
managed care organization; or 22
(d) Any other reason established by the department. 23
(4) (a) A managed care organization may only subject a Medicaid-enrolled 24
provider to prepayment claims review after: 25
1. Requesting, in writing, approval from the department to subject a 26
Medicaid-enrolled provider to prepayment claims review. The written 27 UNOFFICIAL COPY 25 RS BR 1558
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request for approval required by this subparagraph shall include a 1
justification for the request which shall identify the specific provision 2
of subsection (3) of this section under which the request is being made 3
and specific facts as may support that justification; and 4
2. Receiving written approval from the department to subject a provider 5
to prepayment claims review. The written approval required by this 6
subparagraph shall include justification for the approval which shall 7
identify the specific provision of subsection (3) of this section under 8
which the request was approved, the approved timeframe for which the 9
Medicaid-enrolled provider may be subject to prepayment claims 10
review, and the approved scope of the prepayment claims review to 11
which the provider may be subjected. 12
(b) Prior to approving any request submitted by a managed care organization 13
under this subsection, the department shall solicit a response from the 14
provider against whom the managed care organization is seeking to initiate 15
prepayment claims review. In soliciting a response from the provider, the 16
department shall provide the provider with an unredacted and complete 17
copy of the written request submitted by the managed care organization, 18
and the provider shall have fifteen (15) calendar days from the date on 19
which the department solicited a response to respond in writing. 20
(c) The department shall approve, deny, or return for further information each 21
request from a managed care organization for prepayment claims review 22
within fifteen (15) days after it receives a response from the provider or 23
after the expiration of the fifteen (15) day period in which a provider may 24
submit a response. 25
(d) Notwithstanding paragraph (b) of this subsection, the department may deny 26
a managed care organization's request to initiate prepayment claims review 27 UNOFFICIAL COPY 25 RS BR 1558
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without soliciting a response from the provider. 1
(e) The department may require managed care organizations to submit requests 2
under this subsection in a form and manner prescribed by the department. 3
(5) Written notice of being subject to prepayment claims review shall be sent by 4
certified mail, return receipt requested, to the Medicaid-enrolled provider's point 5
of contact, as set forth in the provider's enrollment agreement, and to the 6
provider's principal place of business, as it appears on the Secretary of State's 7
website, if the provider is an entity required to register as a business entity. 8
Prepayment claims review shall be initiated no less than twenty (20) calendar 9
days from the date of receipt by the Medicaid-enrolled provider of the written 10
notice as evidenced by the certified mail return receipt. The notice shall contain 11
the following: 12
(a) A copy of the written approval received by the managed care organization 13
as required under subsection (4) of this section, any additional information 14
that may be necessary to explain with specific supporting facts the provision 15
of subsection (3) of section upon which approval was granted, the approved 16
timeframe for which the Medicaid-enrolled provider may be subject to 17
prepayment claims review, and the approved scope of the prepayment claims 18
review to which the provider may be subjected; 19
(b) A description of the review process and claims processing times; 20
(c) A description of the specific claims, including specific current procedural 21
terminology or CPT codes subject to prepayment review; 22
(d) A detailed list of all supporting documents that the provider will be required 23
to submit for claims that are subject to prepayment review; 24
(e) Information on accessing the secure online portal for uploading supporting 25
documents required under subsection (6) of this section; 26
(f) The process for submitting claims and supporting documents; 27 UNOFFICIAL COPY 25 RS BR 1558
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(g) The standard of evaluation used to determine when a provider's claims will 1
cease to be subject to prepayment claims review; 2
(h) Information on requesting a provider education session on the prepayment 3
claims review process which, if requested by the provider, shall be provided 4
by the department or the managed care organization that will conduct the 5
reviews prior to the start of the prepayment claims review; and 6
(i) Information on the appeals process for both the prepayment review and any 7
denied claims. 8
(6) A managed care organization shall allow supporting documents that may be 9
required for claims that are subject to prepayment claims review to be 10
electronically uploaded via a secure online portal and shall provide each 11
Medicaid-enrolled provider who is subject to prepayment claims review access to 12
that portal. A managed care organization shall not require supporting documents 13
that may be required for claims that are subject to prepayment claims review to be 14
submitted by mail, fax, or any other method of transmittal other than a secure 15
online portal. 16
(7) The department and managed care organizations shall process all clean claims 17
submitted for prepayment review within twenty (20) calendar days of receipt of all 18
required supporting documents for each claim that is subject to prepayment 19
review. If a provider fails to provide all required supporting documents necessary 20
to process a claim, the department or managed care organization shall send the 21
written notice of the missing or deficient documents to the Medicaid-enrolled 22
provider within fifteen (15) calendar days of the due date of the required 23
supporting documents, and the department or managed care organization shall 24
have an additional twenty (20) calendar days to process claims upon receipt of the 25
previously missing or deficient supporting documents. 26
(8) (a) A Medicaid-enrolled provider subjected to prepayment claims review shall 27 UNOFFICIAL COPY 25 RS BR 1558
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remain subject to prepayment claims review until the provider achieves 1
three (3) consecutive months with a minimum clean claims rate of at least 2
seventy percent (70%), provided that the number of claims submitted per 3
month is no less than fifty percent (50%) of the provider's average monthly 4
submission of Medicaid claims for the three (3) month period prior to the 5
provider being subjected to the prepayment claims review process or such 6
lesser timeframe as may be established by the department in its written 7
approval provided under subsection (4) of this section. 8
(b) If a provider submits zero (0) claims for a given month while subject to 9
prepayment claims review then the clean claims rate shall be zero percent 10
(0%) for that month. 11
(c) 1. If a provider fails to achieve a seventy percent (70%) clean claims rate 12
for three (3) consecutive months within a six (6) month period, the 13
department may implement sanctions against the provider which may 14
include continuation of prepayment claims review or other sanctions 15
as determined appropriate by the department. The department shall 16
provide adequate advanced notice of any modification, suspension, 17
termination, or sanction imposed pursuant to this paragraph. 18
2. Nothing in this paragraph shall be interpreted as authorizing a 19
managed care organization to impose any sanction or penalty, 20
including an extension of the prepayment claims review process, on a 21
Medicaid-enrolled provider for failing to achieve a seventy percent 22
(70%) clean claims rate for three (3) consecutive months within a six 23
(6) month period. 24
(d) In no case shall a Medicaid-enrolled provider be subject to prepayment 25
claims review for more than twenty-four (24) consecutive months unless the 26
department has initiated other sanctions against the provider. 27 UNOFFICIAL COPY 25 RS BR 1558
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(e) A provider against whom other sanctions have been initiated by the 1
department may submit a written appeal and request an administrative 2
hearing to be conducted pursuant to KRS Chapter 13B. 3
(9) The department and managed care organization shall process and pay claims 4
submitted for services not subject to prepayment claims review in a timely 5
manner. This shall include timely payments for all services included on the same 6
claim as a service that may be subject to prepayment claims review. 7
(10) For any claim for which the department or a managed care organization has 8
provided prior authorization, prepayment claims review shall not include review 9
of the medical necessity for the approved service. 10
(11) The department shall not require managed care organizations to subject any 11
predetermined percentage of claims or Medicaid-enrolled providers to 12
prepayment claims review. A Medicaid-enrolled provider shall only be made 13
subject to prepayment claims review in accordance with this section. 14
(12) Any prepayment claims review process to which a Medicaid-enrolled provider 15
may be subject shall comply with Chapter 3 of the Medicare Provider Integrity 16
Manual and other applicable guidance from the federal Centers for Medicare 17
and Medicaid Services on conducting prepayment claims review. 18
(13) The department may promulgate administrative regulations in accordance with 19
KRS Chapter 13A necessary to carry out this section. 20
Section 2. If the Department for Medicaid Services or the Cabinet for Health 21
and Family Services determines that a state plan amendment, waiver, or any other form 22
of authorization or approval from any federal agency is necessary prior to implementation 23
of Section 1 of this Act for any reason, including the loss of federal funds, the department 24
or cabinet shall, within 90 days after the effective date of this Act, request any necessary 25
state plan amendment, waiver, authorization, or approval, and may only delay full 26
implementation of those provisions for which a state plan amendment, waiver, 27 UNOFFICIAL COPY 25 RS BR 1558
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authorization, or approval was deemed necessary until the state plan amendment, waiver, 1
authorization, or approval is granted or approved. 2
Section 3. The Department for Medicaid Services or the Cabinet for Health and 3
Family Services shall, in accordance with KRS 205.525, provide a copy of any state plan 4
amendment, waiver application, or other request for authorization or approval submitted 5
pursuant to Section 2 of this Act to the Legislative Research Commission for referral to 6
the Interim Joint Committee on Health Services and the Interim Joint Committee on 7
Appropriations and Revenue and shall provide an update on the status of any application 8
or request submitted pursuant to Section 2 of this Act at the request of the Legislative 9
Research Commission or any committee thereof. 10