[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR447.45]

[Page 297-299]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                  HEALTH AND HUMAN SERVICES (CONTINUED)
 
PART 447_PAYMENTS FOR SERVICES--Table of Contents
 
                 Subpart A_Payments: General Provisions
 
Sec. 447.45  Timely claims payment.

    (a) Basis and purpose. This section implements section 1902(a)(37) 
of the Act by specifying--
    (1) State plan requirements for--
    (i) Timely processing of claims for payment;
    (ii) Prepayment and postpayment claims reviews; and
    (2) Conditions under which the Administrator may grant waivers of 
the time requirements.
    (b) Definitions. Claim means (1) a bill for services, (2) a line 
item of service, or (3) all services for one recipient within a bill.
    Clean claim means one that can be processed without obtaining 
additional information from the provider of the service or from a third 
party. It includes a claim with errors originating in a State's claims 
system. It does not include a claim from a provider who is under 
investigation for fraud or abuse, or a claim under review for medical 
necessity.
    A shared health facility means any arrangement in which--
    (1) Two or more health care practitioners practice their professions 
at a common physical location;
    (2) The practitioners share common waiting areas, examining rooms, 
treatment rooms, or other space, the services of supporting staff, or 
equipment;
    (3) The practitioners have a person (who may himself be a 
practitioner)--
    (i) Who is in charge of, controls, manages, or supervises 
substantial aspects of the arrangement or operation for the delivery of 
health or medical services at the common physical location other than 
the direct furnishing of professional health care services by the 
practitioners to their patients; or
    (ii) Who makes available to the practitioners the services of 
supporting staff who are not employees of the practitioners; and
    (iii) Who is compensated in whole or in part, for the use of the 
common physical location or related support services, on a basis related 
to amounts charged or collected for the services rendered or ordered at 
the location or on any basis clearly unrelated to the value of the 
services provided by the person; and
    (4) At least one of the practitioners received payments on a fee-
for-service basis under titles V, XVIII, and XIX in an amount exceeding 
$5,000 for any one month during the preceding 12 months or in an 
aggregate amount exceeding $40,000 during the preceding 12 months.

The term does not include a provider of services (as specified in Sec. 
489.2(b) of this

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chapter), a health maintenance organization (as defined in section 
1301(a) of the Public Health Service Act), a hospital cooperative shared 
services organization meeting the requirements of section 501(e) of the 
Internal Revenue Code of 1954, or any public entity.
    Third party is defined in Sec. 433.135 of this chapter.
    (c) State plan requirements. A State plan must (1) provide that the 
requirements of paragraphs (d), (e)(2), (f) and (g) of this section are 
met; and
    (2) Specify the definition of a claim, as provided in paragraph (b) 
of this section, to be used in meeting the requirements for timely 
claims payment. The definition may vary by type of service (e.g., 
physician service, hospital service).
    (d) Timely processing of claims. (1) The Medicaid agency must 
require providers to submit all claims no later than 12 months from the 
date of service.
    (2) The agency must pay 90 percent of all clean claims from 
practitioners, who are in individual or group practice or who practice 
in shared health facilities, within 30 days of the date of receipt.
    (3) The agency must pay 99 percent of all clean claims from 
practitioners, who are in individual or group practice or who practice 
in shared health facilities, within 90 days of the date of receipt.
    (4) The agency must pay all other claims within 12 months of the 
date of receipt, except in the following circumstances:
    (i) This time limitation does not apply to retroactive adjustments 
paid to providers who are reimbursed under a retrospective payment 
system, as defined in Sec. 447.272 of this part.
    (ii) If a claim for payment under Medicare has been filed in a 
timely manner, the agency may pay a Medicaid claim relating to the same 
services within 6 months after the agency or the provider receives 
notice of the disposition of the Medicare claim.
    (iii) The time limitation does not apply to claims from providers 
under investigation for fraud or abuse.
    (iv) The agency may make payments at any time in accordance with a 
court order, to carry out hearing decisions or agency corrective actions 
taken to resolve a dispute, or to extend the benefits of a hearing 
decision, corrective action, or court order to others in the same 
situation as those directly affected by it.
    (5) The date of receipt is the date the agency receives the claim, 
as indicated by its date stamp on the claim.
    (6) The date of payment is the date of the check or other form of 
payment.
    (e) Waivers. (1) The Administrator may waive the requirements of 
paragraphs (d) (2) and (3) of this section upon request by an agency if 
he finds that the agency has shown good faith in trying to meet them. In 
deciding whether the agency has shown good faith, the Administrator will 
consider whether the agency has received an unusually high volume of 
claims which are not clean claims, and whether the agency is making 
diligent efforts to implement an automated claims processing and 
information retrieval system.
    (2) The agency's request for a waiver must contain a written plan of 
correction specifying all steps it will take to meet the requirements of 
this section.
    (3) The Administrator will review each case and if he approves a 
waiver, will specify its expiration date, based on the State's 
capability and efforts to meet the requirements of this section.
    (f) Prepayment and postpayment claims review. (1) For all claims, 
the agency must conduct prepayment claims review consisting of--
    (i) Verification that the recipient was included in the eligibility 
file and that the provider was authorized to furnish the service at the 
time the service was furnished;
    (ii) Checks that the number of visits and services delivered are 
logically consistent with the recipient's characteristics and 
circumstances, such as type of illness, age, sex, service location;
    (iii) Verification that the claim does not duplicate or conflict 
with one reviewed previously or currently being reviewed;
    (iv) Verification that a payment does not exceed any reimbursement 
rates or limits in the State plan; and

[[Page 299]]

    (v) Checks for third party liability within the requirements of 
Sec. 433.137 of this chapter.
    (2) The agency must conduct post-payment claims review that meets 
the requirements of parts 455 and 456 of this chapter, dealing with 
fraud and utilization control.
    (g) Reports. The agency must provide any reports and documentation 
on compliance with this section that the Administrator may require.

(Secs. 1102 and 1902(a)(37) of the Social Security Act (42 U.S.C. 1302, 
1396a(a)(37)))

[44 FR 30344, May 25, 1979, as amended at 55 FR 1434, Jan. 16, 1990]