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Home > Insurance Division > Chapter 352 Notice > Claims Handling Appeals and PICPA
Claims Payment: Claims Handling Appeals and the Program for Independent Claims Payment Arbitration (PICPA)

Please note:

  • References to “carrier” throughout include any subcontractor of a carrier that performs the referenced function on behalf of the carrier.
  • Unless indicated otherwise, responses do not apply to self-funded plans, to policies issued and delivered in a state other than New Jersey, or to limited benefits plans that do not provide hospital or medical expense benefits.
Questions and Responses
1. What is the New Jersey Program for Independent Claims Payment Arbitration (PICPA)?
2. Who is the current vendor for the PICPA?
3. What claims/policies are subject to review through the PICPA?
4. Does the HCAPPA require claims to meet a dollar threshold level in order for a health care provider’s request for arbitration regarding a carrier’s action on the claim to be considered?
5. Are there any limits or standards for aggregating claims to meet the $1,000 threshold?
6. What constitutes the “disputed claim amount”?
7. Does the PICPA address claims payment disputes between health care providers and covered persons, or disputes between carriers and covered persons?
8. When is a claim considered timely for arbitration?
9. If a disputed claim amount is less than $1,000, and cannot be aggregated with other disputed claim amounts in a timely manner to meet the $1,000 arbitration threshold, may the health care provider submit the single disputed claim amount to the PICPA to preserve the arbitration right?
10. Must a health care provider go through the carrier’s HCAPPA internal claims payment appeal program before the health care provider may request arbitration?
11. Where can I get a copy of the Health Care Provider Application to Appeal a Claims Determination form?
12. If a carrier refuses to pay a claim because the carrier has determined the services were not medically necessary or experimental or investigational and the health care provider disagrees, may a health care provider use the PICPA to resolve the dispute?
13. What’s the difference between the IHCAP and the PICPA?
14. What is the cost for taking an appeal to arbitration through the PICPA?
15. What is the application process for the PICPA?
16. What is the PICPA’s mailing/street address?
17. Are there any requirements as to how payment is to be made?
18. Since this can be a multi-step process, when is the request for arbitration considered filed?
19. Does the arbitration organization take any action on an application submitted online pending receipt of the required fees?
20. How does the responding party become aware of the application for arbitration?
21. What happens if the arbitration organization determines that the request for arbitration is not eligible based on the information from the applicant?
22. May the arbitration organization initially determine that the request for arbitration is eligible, but subsequently reject it?
23. What happens if a case submitted for arbitration is rejected?
24. How long after a request for arbitration has been accepted will it be before a decision is rendered?
25. Is it possible for a responding party to hold up the process by refusing to submit the required fees and documentation?
26. Will the parties to the arbitration have an opportunity to speak with the arbitrator?
27. What if the parties resolve the matter prior to the arbitration organization rendering a decision on the case?
28. Must a health care provider obtain consent from a patient in order to take a claims issue to the PICPA?
29. How would a health care provider obtain consent from a patient to take a claims issue to the PICPA?
30. May a health care provider modify the Department’s consent form?
31. May a health care provider require a patient to complete a consent form as a condition of rendering services?
32. What happens to all of the claims that were supposed to be eligible for arbitration during the year between when the HCAPPA went into effect and the date the PICPA became effective?
33. Who is actually reviewing the cases presented for arbitration?
34. What information is required to be included in the arbitration determination?
35. What if a party is not satisfied with the outcome of the arbitration?
36. If an arbitration determination requires one party to pay money to the other party, what is the timeframe for compliance?
37. May a payer satisfy a payment obligation that is the subject of an arbitration by remitting such payment to the member rather than to the provider?
38. May the non-initiating party to an arbitration unilaterally terminate/withdraw an arbitration?
39. Is interest owed on money determined by the arbitrator to be due?
40. Are the requests for arbitration and supporting claims information public information?
41. Do I need to have an attorney for the arbitration process?
 
1.

What is the New Jersey Program for Independent Claims Payment Arbitration (PICPA)?

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  The PICPA is a program established by the Health Claims Authorization, Processing and Payment Act (HCAPPA), P.L. 2005, c. 352, designed to provide health care providers and carriers offering health benefits plans an independent body able to arbitrate claims disputes between a payer and health care provider.  The Department of Banking and Insurance (Department) contracts with an independent vendor to perform the arbitration and related administrative functions.
   
2.

Who is the current vendor for the PICPA?

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  The current arbitration organization for the PICPA is MAXIMUS, Inc.  The web address is https://njpicpa.maximus.com.
   
3.

What claims/policies are subject to review through the PICPA?

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  The PICPA generally will consider claims arising under health benefits plans subject to the HCAPPA.  That is, claims arising under policies delivered or issued for delivery in New Jersey that provide hospital and medical expense benefits or coverage for hospital and medical services are subject to review through the PICPA if the carrier issuing the policy is a health service corporation, medical service corporation, hospital service corporation, insurer, HMO, or prepaid prescription plan.  This includes claims payment issues arising from contracts between HMOs and the New Jersey Department of Human Services (Medicaid managed care and NJ FamilyCare).  However, claims paid directly by the Medicaid program (fee-for-service) are not reviewable through the PICPA.  In addition, the PICPA will not consider claims issues arising from:  self-funded health plans; dental plans issued by dental service corporations and dental plan organizations; Medicare fee-for-service payments, or contracts for Medicare (Medicare has its own review system); contracts for the Federal Employees Health Benefits Program, the State Health Benefits Program (whether self-funded or insured – both programs have their own review systems).  The PICPA will not consider issues arising from policies and contracts issued for delivery in a state other than New Jersey.  Also, the PICPA will not consider claims arising pursuant to personal injury protection or bodily injury provisions of commercial or personal liability policies, or workers’ compensation coverage.
   
4. Does the HCAPPA require claims to meet a dollar threshold level in order for a health care provider’s request for arbitration regarding a carrier’s action on the claim to be considered?
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Yes.  An arbitration request will not be considered unless it is for a total disputed amount of $1,000 or more.  However, the HCAPPA does not require that each disputed claim amount presented for arbitration equal $1,000 or more.  The HCAPPA permits health care providers to aggregate disputed claim amounts (for claims that have been through the internal claims payment appeal process filed on the Health Care Providers Application to Appeal a Claims Determination form) to reach the $1,000 arbitration threshold.

If a carrier presents a request for arbitration, the disputed amount would also have to meet the $1,000 threshold level.

   
5. Are there any limits or standards for aggregating claims to meet the $1,000 threshold?
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Yes, there are several standards that must be met.  First, all disputed claim amounts aggregated for arbitration must be from claims that have been submitted to a carrier’s internal claims payment appeal mechanism (and the appeal mechanism exhausted).  Second, all claims in the aggregation of disputed claims MUST be timely.  Untimely claims will be removed from the aggregation, and if the remaining claims do not meet the threshold amount, none of the claims will be considered for arbitration at that time.  Third, disputed claim amounts should be aggregated by carrier and covered person, OR by carrier and Current Procedural Terminology (CPT) code.  Other aggregation models are not acceptable.

   
6. What constitutes the “disputed claim amount”?
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The disputed claim amount is the difference between what the provider received from the carrier and what the provider contends he should have received from the carrier.

   
7. Does the PICPA address claims payment disputes between health care providers and covered persons, or disputes between carriers and covered persons?
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No.

   
8. When is a claim considered timely for arbitration?
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The HCAPPA specifies that health care providers may file a request for arbitration of a disputed claim amount within 90 days AFTER receiving a determination on an internal claims payment appeal from the carrier when the appeal has been filed on the Health Care Provider Application to Appeal a Claims Determination form.  If the appeal is not filed on the Health Care Provider Application to Appeal a Claims Determination form, the resulting determination is not eligible for arbitration.  If more than 90 days has elapsed since the health care provider received the internal claims payment appeal determination, the claim is no longer eligible for submission for arbitration.  (But see Question 10 below for special circumstances.)

   
9. If a disputed claim amount is less than $1,000, and cannot be aggregated with other disputed claim amounts in a timely manner to meet the $1,000 arbitration threshold, may the health care provider submit the single disputed claim amount to the PICPA to preserve the arbitration right?
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No.  The health care provider only has a right to use the PICPA if the disputed claim amount is:  (a) $1,000 or can be aggregated with other disputed claim amounts to reach the $1,000 threshold; (b) each disputed claim amount is submitted in a timely manner; and, (c) the health care provider has exhausted the carrier’s internal claims payment appeal mechanism for each disputed claim amount to be submitted (but also see Question 10).

   
10. Must a health care provider go through the carrier’s HCAPPA internal claims payment appeal program before the health care provider may request arbitration?
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Yes, a health care provider must submit the Health Care Provider Application to Appeal a Claims Determination form to appeal a claims payment determination to a carrier before submitting the disputed claim amount(s) for arbitration.  However, if the carrier fails to respond timely to a health care provider after receipt of the health care provider’s appeal application, the health care provider may pursue the arbitration process without waiting for a determination from the carrier.  In addition, the carrier may waive the requirement that the claims appeal process be exhausted.

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11. Where can I get a copy of the Health Care Provider Application to Appeal a Claims Determination form?
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Each carrier is required to have the application available on their website.  A generic version of the form – which a health care provider may use – is available on the Department’s website at www.state.nj.us/dobi/chap352/352application.doc (MS Word).

   
12. If a carrier refuses to pay a claim because the carrier has determined the services were not medically necessary or experimental or investigational and the health care provider disagrees, may a health care provider use the PICPA to resolve the dispute?
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No.  This type of dispute should be brought – with the consent of the patient – to the carrier’s internal UM appeal program, and then to the Independent Health Care Appeals Program (IHCAP) if the health care provider or patient is dissatisfied with the outcome of the Stage 1 and Stage 2 UM appeals.

   
13. What’s the difference between the IHCAP and the PICPA?
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The IHCAP is a program that provides an independent external review about disputes regarding utilization management (UM) determinations.  The IHCAP primarily reviews questions of whether a particular set of health care services are (or were) medically necessary for an individual’s care, including whether a service is medically necessary or cosmetic.  The IHCAP will also review questions of whether a service is medical rather than dental, experimental or investigational, whether a condition was preexisting, and certain other questions where independent medical expertise is warranted.  The PICPA is a program that provides an independent external review of claims payment questions that do not involve disputes regarding UM determinations.  The PICPA will review questions of whether a claim was appropriately denied for administrative reasons, in a timely manner.  The PICPA will also review questions of whether amounts paid on a claim were appropriate under the contract terms and applicable fee schedules, if any, and whether interest was paid appropriately, if due.  The decisions obtained through the IHCAP are binding upon the carrier.  The decisions obtained through the PICPA are binding on both parties.  The IHCAP costs a health care provider $25 to file the UM appeal, with the carrier paying the review costs of $600 (and up) after a decision is rendered. The exact cost to the carrier depends upon which Independent Utilization Review Organization (IURO) reviews the case.  The cost of the PICPA’s review and arbitration fees is split evenly between the health care provider and the carrier.  Payment of half of the review fee and arbitration fee must accompany the arbitration request, and the remaining one half will be collected later by the arbitration organization from the other party.   The exact cost for use of the PICPA services depends upon the amount and/or number of claims in dispute.  The PICPA process allows for disaggregation of cases when appropriate.

   
14. What is the cost for taking an appeal to arbitration through the PICPA?
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The application and arbitration process is composed of two parts, and there is a separate fee for each part of the process. The basic cost is $65 (per party) for the initial review fee, and $145 (per party) for the arbitration, for a total of $210 for the health care provider and $210 for the carrier.  HOWEVER, the basic fees are for a single claim with a disputed amount worth $1,000. Claims involving multiple claim lines and more than $2,000 may be disaggregated. When a case is disaggregated both the provider and the carrier will be notified. Additional initial review fees and arbitration fees will be required if a case is disaggregated.

Claims may be aggregated for the purpose of arbitration. If claims are aggregated, additional fees may apply.  If the aggregated claims are less than a $1,000 each, additional arbitration fees are assessed for every $1,000.00 in dispute for aggregated claims of less than $1,000 each. More information is available at https://njpicpa.maximus.com.
   
15. What is the application process for the PICPA?
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Parties interested in pursuing arbitration need to access the application at https://njpicpa.maximus.com.  When first accessing the website, a health care provider or carrier will be requested to create an account with the arbitration organization, MAXIMUS.  When subsequently accessing the website regarding either an existing case, or to file a new request for arbitration, the health care provider or carrier will need to log in using the same user account information.

The application can be completed and submitted directly online, with electronic attachments (including scanned documents).  HOWEVER, payment cannot be accepted online at this time, so payment must be submitted separately by mail or courier service.  Upon completion of the application, a Case ID Number will be generated.  The health care provider (or carrier) should include the Case ID Number with the payment and any additional materials that could not be submitted electronically to assure that information can be matched correctly. 

Be sure to include an email address on the application, if possible!  Email is the preferred method of correspondence between the PICPA and the parties.  Also, include at least the information filed with the internal claims appeal, a copy of the Health Care Provider Application to Appeal a Claims Determination form submitted to the carrier, and the carrier’s determination, if any, on the appeal when submitting applications for arbitration.
   
16.

What is the PICPA’s mailing/street address?

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  Attn:  NJPICPA
MAXIMUS
3750 Monroe Avenue
Suite 705
Pittsford, NY 14534
   
17. Are there any requirements as to how payment is to be made?
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In addition to the requirement that payment be submitted by mail or courier service, MAXIMUS requires that payment be by check or money order, and that parties submit a separate payment for the review fee and the arbitration fee.  Thus, an applicant (and the responding party) must submit two checks or money orders for each application, made payable to MAXIMUS, Inc., and submitted to the attention of the NJPICPA at:  3750 Monroe Avenue, Suite 705, Pittsford, NY 14534.

   
18. Since this can be a multi-step process, when is the request for arbitration considered filed?
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When an application is submitted online, the application is considered filed upon its submission.  When an application is submitted by mail or courier service, the application is considered filed upon its receipt at MAXIMUS’ office (see the address above).  Note:  the date of filing of the request for arbitration is not contingent upon receipt of the fees.  So, if an application is submitted online 87 days after a decision on the appeal of the claim was rendered by the carrier, but the fees are not received by the arbitration organization until four days later, the application will be considered timely.

   
19. Does the arbitration organization take any action on an application submitted online pending receipt of the required fees?
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Yes.  The arbitration organization does not sideline a case pending receipt of the appropriate fees from the applicant.  However, the arbitration organization is not required to issue any determinations until the applicant’s fees are received.

   
20.

How does the responding party become aware of the application for arbitration?

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  Upon receipt of the application and appropriate fees from the applicant, and a preliminary determination that the request for arbitration is eligible based on the information received from the applicant, the arbitration organization will notify the responding party (typically, the carrier) about the application, provide the carrier with the case information, and request that the carrier submit review and provide any additional information regarding the carrier’s position on the issue(s), along with the appropriate review and arbitration fees.  Unlike the applicant, the responding carrier must submit information by mail or courier service at this time.  Carriers should submit information as well as payments with the Case ID Number included on the documents and checks to assure proper identification.
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21.

What happens if the arbitration organization determines that the request for arbitration is not eligible based on the information from the applicant?

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  If the arbitration organization determines the arbitration request is not eligible based solely on the applicant’s submitted information, the arbitration organization will return the applicant’s arbitration fee, but will retain the applicant’s review fee.
   
22.

May the arbitration organization initially determine that the request for arbitration is eligible, but subsequently reject it?

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  Yes, it’s possible.  Based upon the information from the applicant, the arbitration organization may initially determine the arbitration request is eligible, but upon receipt of information from the carrier determine that the request is not eligible for arbitration.  In that instance, the arbitration fees will be returned to both the applicant and the carrier, but the arbitration organization will keep the review fees from both parties.
   
23.

What happens if a case submitted for arbitration is rejected?

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  A rejection of a case from arbitration is not a substantive binding decision and the parties are free to pursue alternate dispute resolution mechanisms including, but not limited to, legal action.
   
24.

How long after a request for arbitration has been accepted will it be before a decision is rendered?

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  In general, a decision should be rendered on the case within 30 days following receipt of all required information.  Be aware that a determination to accept the case for arbitration does not necessarily mean that all of the information required for the review has been submitted.  How long it takes for a decision to be rendered depends in part upon how quickly and thoroughly applicants and respondents fulfill requests for information from the arbitrator.  The arbitration organization will keep both parties apprised of additional requests for information, and will set forth the timeframes for responding to such requests.
   
25. Is it possible for a responding party to hold up the process by refusing to submit the required fees and documentation?
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Responding parties are expected to submit information in a timely manner (typically, within 10 days of the request).  If a responding party fails to submit appropriate documentation and fees as required, the arbitration organization will proceed with its review of the documentation available to it, and will render a determination.

   
26. Will the parties to the arbitration have an opportunity to speak with the arbitrator?
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The arbitrator’s decision will be based on the written record, and the arbitrator will not accept oral arguments.  However, the arbitration organization will speak with the parties regarding administrative matters – for instance, to discuss whether a particular document was received.

   
27. What if the parties resolve the matter prior to the arbitration organization rendering a decision on the case?
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The parties may resolve the matter on their own at any point prior to the arbitration organization rendering a decision, in which instance, no binding decision will be issued.  However, so long as the matter was accepted for arbitration, both parties remain liable for the full costs of the arbitration, and no fees will be refunded.  Further, the case will remain a matter of record, and will be considered within statistical data.

   
28. Must a health care provider obtain consent from a patient in order to take a claims issue to the PICPA?
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No.  A health care provider has a right to request and proceed with arbitration with or without the consent of the patient.  However, the arbitrator will require the written consent from the patient in order to review any medical documentation related to the issue being arbitrated. The information available to the arbitrator will be limited when the health care provider does not obtain a patient’s authorization for release of medical records, which, in turn, may have an impact upon the arbitrator’s decision.

   
29. How would a health care provider obtain consent from a patient to take a claims issue to the PICPA?
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The Department has developed a standard consent form that provider’s may use to obtain consent from patients for release of medical information.  This form (MS Word) may also be used for obtaining consent to represent a patient in a utilization management appeal.  Consent may be obtained at the time services are being sought or at a later time.

   
30. May a health care provider modify the Department’s consent form?
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No.  However, a health care provider may add its name to the form where indicated, and may make an accurate translation of the form into additional languages as may be appropriate.  (Please note, the Department of Health and Senior Services has posted some translations of some of the forms on the Office of Minority and Multicultural Health web page.)

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31. May a health care provider require a patient to complete a consent form as a condition of rendering services?
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No. 

   
32. What happens to all of the claims that were supposed to be eligible for arbitration during the year between when the HCAPPA went into effect and the date the PICPA became effective?
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The Department had previously advised by Bulletin 06-16 that providers would have the opportunity to have all eligible claims arbitrated if submitted within a time period as specified in that bulletin.  On June 29, 2007, the Department revised this policy somewhat via Bulletin 07-14, advising that deadlines for submitting requests for arbitration to the PICPA would be phased in, as would the deadlines for final determinations by the arbitration organization.  Consequently, if a carrier renders a decision on an internal claim appeal filed on a Health Care Application to Appeal a Claims Determination form (or the carrier failed to render a decision that the carrier was required to make) prior to August 1, 2007, and the health care provider remains dissatisfied, then the health care provider may submit a request for arbitration of the claim(s) no later than November 30, 2007, and the arbitration organization will have 60 days within which to render a decision on the matter if the case is accepted for arbitration.  Health care providers dissatisfied with a carrier’s determination on a claim appealed on or after August 1, 2007, via a Health Care Provider Application to Appeal a Claims Determination form, must submit requests for arbitration within 90 days following receipt of the carrier’s determination (or 90 days from when a carrier should have rendered a determination), and the normal timeframes for a final decision from the arbitration organization apply.

   
33. Who is actually reviewing the cases presented for arbitration?
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Reviews will be performed by independent and impartial health claims professionals with at least five years of health claims processing experience.

   
34. What information is required to be included in the arbitration determination?
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The arbitration determination must be in writing, and must be signed by the arbitrator.  The determination must include a statement of the issues in dispute, the arbitrator’s findings, and the conclusions on which the determination is based.

   
35. What if a party is not satisfied with the outcome of the arbitration?
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The arbitration determination is binding on both parties.  The HCAPPA does not provide a process for appealing the arbitration determination.

   
36. If an arbitration determination requires one party to pay money to the other party, what is the timeframe for compliance?
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In general, any monies owed should be paid within 10 business days following the date of the arbitrator’s determination.  In instances in which the arbitration may involve an attempt to collect an overpayment by a carrier, and the arbitrator’s determination favors the carrier, the carrier may seek to offset against claims immediately if the 45-day notice period required for such collection actions has already elapsed.

   
37. May a payer satisfy a payment obligation that is the subject of an arbitration by remitting such payment to the member rather than to the provider?
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No. Payments pursuant to arbitration awards must be made to the provider within 10 business days following the date of the arbitration decision irrespective of the provider's participating status with the payer. As of the date a provider files an application for arbitration with MAXIMUS, payments made by a payer to a member, whether before or after the arbitration decision is issued, do not satisfy the payment obligations imposed by the ultimate arbitration decision. As of the date a provider files an application for arbitration with MAXIMUS, a carrier that nevertheless remits payment to a member rather than the provider is not entitled to take the position that the provider must collect that sum from the member, nor may the carrier require the provider to wait for payment until the carrier has recouped the payment from the member.

   
38. May the non-initiating party to an arbitration unilaterally terminate/withdraw an arbitration?
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No. An arbitration may only be terminated/withdrawn by the initiating party. Thus, if an arbitration is initiated by a provider, and a payer subsequently makes a payment with respect to the disputed claim and requests that the arbitration be terminated, MAXIMUS will not act on such request unless the provider affirmatively requests via direct communication to MAXIMUS that the arbitration be terminated. Should the provider not so request, the matter would proceed to a binding decision, notwithstanding the payer's post-filing payment. However, such payment, if appropriately documented and made directly to the provider, may serve to reduce the ultimate amount payable pursuant to the arbitration decision.

   
39. Is interest owed on money determined by the arbitrator to be due?
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It depends. If the arbitrator determines that a:

  • carrier withheld funds because the health care provider did not submit appropriate information (as requested by the carrier), the carrier will not owe interest to the health care provider;

  • carrier erroneously underpaid claims, then the carrier will owe interest on the claim (at 12% per annum, calculated from the date the appeal was filed with the carrier);

  • health care provider has engaged in a pattern of improper billing, and owes money to the carrier, then the health care provider will owe interest with any reimbursements to be made to the carrier (at 12% per annum, calculated from the date the appeal was filed with the carrier).
   
40. Are the requests for arbitration and supporting claims information public information?
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No.  The Department and/or arbitration organization will generate data and reports from the arbitration requests, some of which may be available for release to the public; however, the reports will contain only aggregated data, and nothing that would identify any personal health information.

   
41. Do I need to have an attorney for the arbitration process?
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No, the arbitration mechanism is designed to be a self-help process for health care providers.  A health care provider always has the right to hire legal representation, of course, but filing with the arbitration organization and supplying the supporting documentation should not require the particular expertise of a legal professional or other consultant.

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