Lieutenant Governor Henry had traveled to Washington on behalf of the Kentucky Ambulance Providers Association in an effort to resolve the states' ongoing reimbursement crisis with AdminaStar-Federal, Inc.

Issues discussed included:

Reimbursement Advances for Ambulance Providers: At KAPA's request, Lieut. Governor Henry requested HCFA's assistance in obtaining reimbursement advances for Kentucky's ambulance providers that have been particularly hard hit by the disruptions in Medicare reimbursements. Although no commitments were made, Dr. Kanok promised that if the Lieut. Governor could identify specific providers and provide additional information on their financial condition, HCFA would look into their eligibility for reimbursement advances on a provider by provider basis. KAPA is asking that all providers experiencing severe financial problems resulting from reductions or delays in Medicare reimbursement from AdminaStar should FAX the following information to Jay Klein, Health Cabinet Liaison, in the Office of the Lieutenant Governor at (502) 564-2849 as soon as possible.

1. Provider's name 
2. Provider number 
3. Dollar amount of claims outstanding from Medicare 
4. A written statement describing the impact that the reimbursement shortfall is causing their ambulance service.

HCFA has stipulated a limited time schedule for provider's information, so KAPA is asking for all effected providers to promptly and accurately gather the requested information and get it faxed to the Lieutenant Governor's Office so that it can be forwarded to HCFA for their consideration. Dr. Kanok cautioned that any reimbursement advances approved by HCFA would not be blanket awards to all providers statewide, but rather would be granted to a limited number of providers that have been effected the worst.

Inconsistencies in claims processing by AdminaStar: Lieutenant Governor Henry voiced his concern over the continuing problems ambulance providers are experiencing due to a lack of consistency in the processing of claims by AdminaStar. Dr. Kanok also communicated HCFA's concern that Medicare beneficiaries' claims are processed in a fair, appropriate and consistent manner. In an effort to insure AdminaStar's compliance, she advised that HCFA is currently monitoring and will continue to monitor AdminaStar's claim processing and program improvements.

Appeals back-log: Lieutenant Governor Henry communicated Kentucky providers frustration with the back-log in claim appeals that are currently taking some 6-9 months to be processed. As a result of the lengthy appeals process, providers are unable to bill the patients or other insurance carriers for claim balances which even further compounds the providers cash flow problems. Dr. Kanok assured the Lieutenant Governor that HCFA was very concerned about AdminaStar's appeals problems and in an effort to address the problem was providing funding for additional staff to process the back-log of appeals.

During the course of the discussion of the appeals back-log problem, Dr. Kanok made a very disturbing revelation. Dr. Kanok informed the Lieutenant Governor that one of the reasons for the increase in the number of appeals was due to a series of changes in the manner that AdminaStar handled incomplete claims submitted by providers. She advised that prior to September of 1999, incomplete claims received by Kentucky's Medicare Carrier had been "returned" to the provider for proper completion and had not been entered into the system and thus had not been denied. This "return" was accomplished in the form of the dreaded "development letters" of years gone by.

Starting in September of 1999, AdminaStar discontinued the practice of "returning" incomplete claims and started entering them into the system and denying the claims. According to Dr. Kanok, this change in AdminaStar''s policy then caused providers to start appealing more and more claims and started the beginning of the appeals back-log problem.

Then in August of 2000, AdminaStar once again changed their policy on incomplete claims and resumed the previous practice of "returning" incomplete claims to the providers and not entering them into the system. Since the largest majority of claims are now submitted electronically, Dr. Kanok was asked how AdminaStar could "return" an electronic claim. She advised the group that she did not know how that the "returns" were being done but that HCFA was under the impression that AdminaStar had informed the providers of the change in the incomplete claims processing policy and the return policy. She went on to advise Lieutenant Governor Henry that she would research how AdminaStar is "returning" claims and let him know so that the information could be shared with the providers.

If incomplete ambulance claims are not being entered into AdminaStar's system and providers are not getting the "returned claims," then where are the claims going? This may explain the reason for the apparent disparity between the number of claims that individual providers have reported to the KAPA Reimbursement Committee that they have submitted to AdminaStar and the number of claims that AdminaStar reports that they have in their system for those same providers.

Some of the providers may remember a similar problem that occurred with the Medicaid carrier a number of years back. In that situation, incomplete claims were not entered into the carriers system and the provider was never informed of the status, there was never a record of claims receipt, and naturally the claims were never paid. Once the problem was uncovered, providers were able to resubmit all claims that were outstanding and were eventually paid.