Change of Law: Hospital Action Required
To: Hospital Chief Financial Officers, Rural Administrators, Human Resources Leaders, Government
Affairs Staff, Legal Counsel
From: David Streeter, MPA, Policy Director- Clinical and Data | DavidS@wsha.org | (206) 216-2508
Staff Contacts: David Streeter, MPA, Policy Director- Clinical and Data | DavidS@wsha.org | (206) 216-2508
Zosia Stanley, JD, MHA, Associate General Counsel | ZosiaS@wsha.org | (206) 216-2511
Subject: New Law Improves Reimbursement Process for Substitute Providers; Requires Retroactive Reimbursement for Credentialed Health Care Providers
Purpose
This bulletin’s purpose is to notify hospitals about the new substitute provider and credentialed provider reimbursement laws passed in HB 1552.
There are three key changes regarding the use of substitute providers providing services to Medicaid Managed Care enrollees, effective March 17, 2020:
- Hospitals, rural health clinics, and rural health providers may use substitute providers to temporarily fill vacant positions while recruiting for permanent positions.
- Medicaid Managed Care Organizations (MCO’s) must allow for the use of substitute providers and allow claims to be submitted for these providers backdated to the substitute provider’s credentialing application submission date, if the application is later approved, for substitute providers staying longer than 60 days.
- Physician assistants, osteopathic physician assistants, and advanced registered nurse practitioners are eligible to be used as substitute providers.
Three additional changes apply to the credentialing and reimbursement process for state regulated private/commercial health insurers, effective June 11, 2020:
- All health insurance carriers must only use the ProviderSource credentialing database for health care provider credentialing applications.
- When credentialing a new health care provider under a new contract with the health carrier, the carrier must reimburse the health care provider for services provided to its enrollees retrospective to the date the contract is effective, if the credentialing process extends beyond this date.
- When credentialing a health care provider under an existing contract, the carrier must reimburse the health care provider for services provided to its enrollees retrospectively to the date that the new provider submitted their credentialing application.
Applicability/Scope
The substitute provider provisions apply to acute care hospitals licensed under chapter 70.41, psychiatric hospitals licensed under chapter 71.12 RCW, federally designated rural health clinics, rural providers and Medicaid managed care organizations.
According to the new law, eligible substitute providers include:
- Physicians licensed under chapter 18.71 RCW;
- Osteopathic physicians and surgeons licensed under chapter 18.57 RCW;
- Podiatric physicians and surgeons licensed under chapter 18.22 RCW;
- Physician assistants licensed under chapter 18.71A RCW;
- Osteopathic physician assistants licensed under chapter 18.57A RCW; and
- Advanced registered nurse practitioners licensed under chapter 18.79 RCW.
Any of the licensed practitioners listed above are considered a “rural provider” if they practice in a county that satisfies the “rural county” definition in RCW 82.14.370. This means that the county has a population density less than 100 people per square mile or is geographically smaller than 225 square miles, as determined by the Office of Financial Management each year. The current list of rural counties is available here.
The credentialing and reimbursement provisions apply to private health insurance carriers.
Recommendation
Review this bulletin to understand the new laws applicable to substitute providers and retroactive reimbursement for credentialed health care providers. Share this information with revenue cycle, reimbursement and finance leaders within your organization or facility. Your human resources department may also need to be made aware of the new process for the use of substitute providers.
Overview
Substitute Provider Background
Hospitals and health clinics often turn to substitute providers when the usual provider is absent due to family or sick leave, continuing medical education, or vacation. Using substitute providers (also called locum tenens or fee-for-time compensation arrangements) in these cases helps ensure patients receive timely care.
Before HB 1552 became law on March 17, 2020, hospitals and health clinics that hired substitute providers to treat Medicaid patients faced reimbursement limitations related to the credentialing process required by Medicaid managed care organizations (MCOs). They also faced limitations on the circumstances for using substitute providers and the types of licensed practitioners who were eligible to be substitute providers.
HB 1552 removed these limitations by adding a new section to chapter 74.09 RCW that:
- Establishes retroactive substitute provider reimbursement criteria for MCOs;
- Allows for the use of substitute providers when recruiting to fill a vacancy; and
- Adds physician assistants, osteopathic physician assistants, and advanced registered nurse practitioners to the list of eligible substitute providers.
Retroactive Reimbursement for Substitute Provider Services
If a hospital, rural health clinic or rural provider uses a substitute provider due to one of the approved circumstances (see below), then the entity is permitted to submit claims for reimbursement to the MCO for services provided to the MCOs enrollees. Under the new law, hospitals, rural health clinics, and rural providers can receive payment at the full contracted rate under their contract with the MCO for up to 60 days. After 60 days, the substitute provider must become credentialed with the MCO for their services to be eligible for reimbursement. Enrollment for the substitute provider with the MCO is effective retroactively to the later of these two dates: the date the substitute provider filed their application for credentials; or the first day the substitute provider started treating Medicaid patients.
It is important for hospitals, rural health clinics, and rural providers to note that the new law states MCO’s may deny credentialing applications from substitute providers who do not meet their enrollment criteria.
Using Substitute Providers While Recruiting to Fill Open Positions
As noted above, the use of substitute providers was previously limited to specific short-term circumstances that included family or sick leave, continuing medical education, or vacation. The new law allows substitute providers to be used when:
- A contracted provider is absent for a limited period due to vacation, illness, disability, continuing medical education, or other short-term absence; or
- A contracted hospital, rural health clinic, or rural provider is recruiting to fill an open position.
This change means that hospitals, rural health clinics, and rural providers may now use substitute providers when recruiting to fill a new position, or when filling a vacant position due to retirement.
Substitute Provider Eligibility for PAs and ARNPs
HB 1552 added physician assistants, osteopathic physician assistants, and advanced registered nurse practitioners to the list of licensed professionals who are eligible to be used as substitute providers. The definition of “substitute provider” now reads:
- Physicians licensed under chapter 18.71 RCW;
- Osteopathic physicians and surgeons licensed under chapter 18.57 RCW;
- Podiatric physicians and surgeons licensed under chapter 18.22 RCW;
- Physician assistants licensed under chapter 18.71A RCW;
- Osteopathic physician assistants licensed under chapter 18.57A RCW; and
- Advanced registered nurse practitioners licensed under chapter 18.79 RCW.
Provider Credentialing
Effective June 11, 2020, RCW 48.43.750 is amended to state that health insurance carriers must only use the credentialing database selected by the Office of the Insurance Commissioner (OIC) as specified in RCW 48.165.035. This change is intended to ensure consistency in the provider credentialing process among health insurance carriers. OIC currently uses ProviderSource as its credentialing database, which means all health insurance carriers are required to use it once the new law takes effect. Current language in RCW 48.43.750 states that health insurance carriers must issue their credentialing decisions within 90 days, effective June 1, 2020.
Credentialed Provider Reimbursement
Private health insurance carriers contract with health care providers to serve patients enrolled in their insurance benefit plans. As part of the contracting process, health insurance carriers issue credentials to individual health care providers so they can be reimbursed for services. However, if a provider treats a patient before their credentials are approved by the health insurance carrier, existing law does not require the insurer to reimburse the health care provider for services provided before their credentials were approved. If it takes a long time for a provider to get credentialed with a plan, this can cause a delay in their ability to be reimbursed for services provided to patients that are enrolled in that health plan. HB 1552 rectifies this by requiring health insurance carriers to reimburse approved health care providers retroactively for services provided before the credentialing application was approved.
Effective June 11, 2020, a new section is added to chapter 48.43 RCW that requires private health insurance carriers to reimburse credentialed health care providers under two different credentialing scenarios:
- When credentialing a new health care provider under a new contract with the health carrier, the carrier must reimburse the health care provider for services provided to its enrollees retrospectively to the date the contract is effective, if the credentialing process extends beyond this date.
- When credentialing an individual provider under an existing contract, the carrier must reimburse the health care provider for services provided to its enrollees retrospectively to the date that the new provider submitted their credentialing application.
In these two scenarios, the health insurance carrier must reimburse the provider at the same rate specified in the service contract as if they were fully credentialed when the services were provided. However, it is important to note that nothing in this legislation requires health insurance carriers to reimburse providers for services when:
- The services provided are outside the scope of the health insurance carrier’s benefit plan;
- The provider’s application for credentials is not approved; or
- If the health insurance carrier and the health care provider do not enter into a contractual relationship.
Next Steps
Hospitals should share this information with their billing and HR departments so they are aware of the new changes.
Background
The substitute provider policy included in the final legislation was a priority as part of WSHA’s rural package in the 2020 legislative session. WSHA worked with several legislative sponsors to craft this policy based on challenges that several rural hospitals were facing. WSHA collaborated with the Washington State Health Care Authority and MCOs to develop the new law impacting use of substitute providers, which is modeled after Medicare’s substitute provider policy.
WSHA also testified in support of the credentialing provisions for private health insurers, as hospitals have faced significant barriers to reimbursement due to the length of time that the credentialing process can take.
References
HB 1552– Health Carrier Provider Credentialing
Chapter 48.43 RCW– Insurance Reform
Chapter 74.09 RCW– Medical Care
WSHA’s 2020 New Law Implementation Guide
Please visit WSHA’s new law implementation guide online, where you will find a list of the high priority laws that WSHA is preparing resources and information on to help members implement the new laws, as well as links to resources such as this bulletin. In addition, you will find the Government Affairs team’s schedule for release of upcoming resources on other laws and additional resources for implementation.
