HCFA releases new member count rules
March 1, 2000 3 minutes read
HCFA releases new member count rules
Effective dates make big pay difference
A seemingly simple matter of record — determining exactly when a beneficiary is enrolled in or disenrolled from a particular plan — has huge ramifications for capitation contracts. That’s because monthly payments are based upon enrollment, and large capitation plans often involve thousands of bits of enrollment and disenrollment data. Multiply that by six to 10 capitation contracts you might have, and you have a major amount of money at question and a sizeable task.
You can’t always depend on your insurer to have correct enrollment dates — sometimes because effective dates can differ from dates a patient actually signed on, and computer codes sometimes omit the information or report it incorrectly, notes Jonathan W. Pearce, MBA, CPA, principal of Dan Grauman Associates Inc. in Bala Cynwyd, PA. Because so much money can ride on effective dates of enrollment and disenrollment, it behooves practices to occasionally audit these data to make sure insurers are implementing the requirements correctly.
New enrollment rules
The Health Care Financing Administration (HCFA) recently announced that effective Jan. 1, 2000, new rules apply to Medicare HMO enrollment verification. Other payers may be revising their rules as well, making a review of other payers just as important.
Beginning Jan. 1, 2000, here are HCFA’s guidelines:1
• Completed elections (i.e., enrollments and disenrollments) made on or before the 10th day of the month are effective the first day of the first calendar month following the date the election is made.
• Elections made after the 10th day of each month are effective the first day of the second calendar month after the election is made.
• An election is made only when it is received by the insurer and completed.
HCFA offers three examples to clarify those new provisions:
• If a completed enrollment form is received by the managed care insurer on May 10, 2000, the effective date is June 1, 2000. If that same completed enrollment form were to be received on May 11, 2000, it would be effective on July 1, 2000.
• If a completed written request to disenroll is received by the managed care insurer on July 10, 2000, the effective date is Aug. 1, 2000. If that same written request were to be received on July 11, 2000, the effective date would be Sept. 1, 2000.
HCFA’s system processing cutoff rates are not affected by those changes, which were required by Congress’ most recent budget. As has been in effect since the Balanced Budget Act, the date a completed election is received by an insurer determines the effective date. The system processing cutoff date does not determine the effective date.
• If an insurer receives a completed enrollment form on May 2, then the effective date of the enrollment is June 1. The insurer has up to 30 days from May 2 to submit the transaction. But submission of the transaction prior to the May systems cutoff date will ensure more timely payment for the June 1 effective date. Monthly cutoff schedules are provided to insurers.
Reference
1. Department of Health and Human Services. Operational Policy Letter #111, OPL2000.111. Washington, DC; Jan. 6, 2000.
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