Adjustment Rules

Below multiple scenarios regarding (combination) adjustment rules are described. In the first scenario a combination adjustment rule is used. In the second scenario an adjustment rule is used. In the third scenario a combination of an adjustment rule and a combination adjustment rule is used. Note that the scenarios are independent.

Note that combination adjustment rules are evaluated per serviced person or object, per provider and per price input date. The first three examples, however, focus on the functionality of applying the combination adjustment rules and therefore assume the same person or object, provider and price input date.

Combination adjustment rules are evaluated across claims, not just within a single claim, also taking into account approved claim lines from other finalized claims that have the same serviced person or object, provider and price input date to which the same combination adjustment rule was previously applied. This has as a consequence that the sequence in which claims are reprocessed can lead to different outcomes. Scenarios 4, 5 and 6 describe different variations in the order of processing, where the emphasis is not on the complexity of the rule itself.

Scenario 7 describes a combination adjustment rule where changes are made during manual pricing, with as a result the claim line(s) being marked as keep pricing. Note that this scenario only has an impact within the processed claim: across claims only approved claim lines from other finalized claims are "seen", never claim lines from other unfinalized claims - whether such claim lines are being marked as keep pricing or not.

Scenario 8 describes a combination adjustment rule that applies tertiary reductions.

Scenario 1 (Multiple Procedure Reduction)

When a person undergoes multiple surgical procedures during the same session (entered as multiple claim lines within one claim or as one claim line with multiple units), the primary procedure unit is reimbursed at 100% of the fee schedule rate and all subsequent (secondary) procedure units are reimbursed at 50% of the fee schedule rate. The primary procedure unit is determined based on the highest allowed amount per unit. This adjustment is called Multiple Procedure Reduction. The setup needed to cover this scenario and an example of a claim with multiple surgical procedures applied during the same session are described below.

Combination Adjustment Rules

Rule Determinant Procedures Modifiers Secondary and Tertiary Procedures Phase PPC Quantifier Primary Line Formula Secondary and Tertiary Line Formulas

CAR1[1]

Allowed Amount

(In) Multiple Procedure Reduction Group (range 10000 - 26999)

-

N/A

1

50%

Adjustment Formula 1

-

Adjustment Formula 1

  • The first unit of the primary claim line is reimbursed at 100%

  • The subsequent units of the primary claim line are seen as subsequent (secondary) procedures and are reimbursed at the percentage specified on the provider pricing clause

AdjustmentPercentage = 100 + providerPricingClause.percentage * (triggeringClaimLine.allowedNumberOfUnits -1) newAllowedAmount = (allowedAmount / triggeringClaimLine.allowedNumberOfUnits) * (AdjustmentPercentage / 100)

Claim

Line Price Input Date Procedure Modifiers Price Input Number Of Units Allowed Number Of Units Allowed Amount[2]

1

03-03-2012

10021

-

1

1

$50

2

03-03-2012

27651

-

1

1

$200

3

03-03-2012

11721

23

3

3

$180

4

03-03-2012

17004

-

2

2

$160

5

03-03-2012

27002

26

1

1

$40

6

03-03-2012

10060

-

3

3

$240

Result

  • Claim lines 2 and 5 are not part of the Multiple Procedure Reduction Group so they are not recognized as being part of the combination of claim lines that need to be adjusted, meaning that the allowed amount on the claim lines is not adjusted

  • Claim lines 1, 3, 4 and 6 are part of the Multiple Procedure Reduction Group so they are recognized as being part of the combination of claim lines that need to be adjusted:

    • Claim lines 4 and 6 both have the highest allowed amount per unit ($80); claim line 4 is recognized as the primary claim line because it has a lower sequence number

    • The new allowed amount on the secondary claim lines (1, 3 and 6) is calculated with the quantifier percentage (50%) specified on the provider pricing clause

    • The new allowed amount on the primary claim line (4) is calculated with Adjustment Formula 1

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$25

2

None

$200

3

Secondary

$90

4

Primary

$120

5

None

$40

6

Secondary

$120

Scenario 2 (Bilateral Procedure Payment Adjustment)

Bilateral surgery services (procedures performed on both sides of the body during the same operative session) are reimbursed at 150% of the fee schedule rate; Bilateral surgery services are identified by the modifier with code 50. This adjustment is called Bilateral Procedure Payment Adjustment. The setup needed to cover this scenario and an example of a claim with bilateral surgery services are described below.

Adjustment Rules

Rule Procedures Modifiers Phase PPC Quantifier Formula

AR1[4]

-

50 (In)

1

150%

-

Claim

Line Price Input Date Procedure Modifiers Price Input Number Of Units Allowed Number Of Units Allowed Amount[5]

1

03-03-2012

28001

50

1

1

$50

2

03-03-2012

28035

23

1

1

$200

3

03-03-2012

27402

23 and 50

3

3

$180

4

03-03-2012

27991

-

2

2

$100

Result

  • Claim lines 2 and 4 do not have modifier 50 so the adjustment rule is not applicable, meaning that the allowed amount on the claim lines is not adjusted

  • Claim lines 1 and 3 have modifier 50 so the allowed amount is adjusted with the quantifier percentage (150%) specified on the provider pricing clause

Line Allowed Amount [6]

1

$75

2

$200

3

$270

4

$100

Scenario 3 (Multiple Procedure Reduction in Combination with Bilateral Procedure Payment Adjustment)

In some cases claims may be subject to both the Multiple Procedure Reduction and the Bilateral Procedure Payment Adjustment when a bilateral procedure and other surgical procedure(s) are performed during the same session. This results in further payment adjustment for the bilateral procedure (see Adjustment Formula 2). The setup needed to cover this scenario and an example of a claim with multiple surgical procedures applied during the same session in combination with bilateral surgery services are described below.

Combination Adjustment Rules

Rule Determinant Procedures Modifiers Secondary and Tertiary Procedures Phase PPC Quantifier Primary Line Formula Secondary and Tertiary Line Formulas

CAR1[1]

Allowed Amount

(In) Multiple Procedure Reduction Group (range 10000 - 26999)

-

N/A

1

50%

Adjustment Formula 1

-

Adjustment Formula 1

  • The first unit of the primary claim line is reimbursed at 100%

  • The subsequent units of the primary claim line are seen as subsequent (secondary) procedures and are reimbursed at the percentage specified on the provider pricing clause

AdjustmentPercentage = 100 + providerPricingClause.percentage * (triggeringClaimLine.allowedNumberOfUnits -1) newAllowedAmount = (allowedAmount / triggeringClaimLine.allowedNumberOfUnits) * (AdjustmentPercentage / 100)

Adjustment Rules

Rule Procedures Modifiers Phase PPC Quantifier Formula

AR1[4]

-

50 (In)

2

50%

Adjustment Formula 2

Adjustment Formula 2

  • The amount as calculated by the previous combination adjustment rule plus a percentage of the fee schedule rate per virtual unit

AllowedAmountSubsequentUnits = (unadjustedAllowedAmount / claimLine.allowedNumberOfUnits) * (providerPricingClause.percentage / 100)

newAllowedAmount = allowedAmount + claimLine.allowedNumberOfUnits * AllowedAmountSubsequentUnits

Claim

Line Price Input Date Procedure Modifiers Price Input Number Of Units Allowed Number Of Units Allowed Amount[7]

1

03-03-2012

10021

-

1

1

$50

2

03-03-2012

27651

26

1

1

$200

3

03-03-2012

11721

50

3

3

$180

4

03-03-2012

17004

-

2

2

$160

5

03-03-2012

27002

50

2

2

$40

6

03-03-2012

10060

-

3

3

$240

Result After Phase 1

  • Claim lines 2 and 5 are not part of the Multiple Procedure Reduction Group so they are not recognized as being part of the combination of claim lines that need to be adjusted, meaning that the allowed amount on the claim lines is not adjusted

  • Claim lines 1, 3, 4 and 6 are part of the Multiple Procedure Reduction Group so they are recognized as being part of the combination of claim lines that need to be adjusted:

    • Claim lines 4 and 6 both have the highest allowed amount per unit ($80); claim line 4 is recognized as the primary claim line because it has a lower sequence number

    • The new allowed amount on the secondary claim lines (1, 3 and 6) is calculated with the quantifier percentage (50%) specified on the provider pricing clause

    • The new allowed amount on the primary claim line (4) is calculated with Adjustment Formula 1

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$25

2

None

$200

3

Secondary

$90

4

Primary

$120

5

None

$40

6

Secondary

$120

Result after Phase 2

  • Claim lines 1, 2, 4 and 6 do not have modifier 50 so the adjustment rule is not applicable, meaning that the allowed amount on the claim lines is not adjusted

  • Claim lines 3 and 5 have modifier 50 so the allowed amount is adjusted with the Adjustment Formula 2

Line Allowed Amount[6]

1

$25

2

$200

3

$180

4

$120

5

$60

6

$120

Scenario 4 (Multiple Surgery in Different Claims)

The configuration is a simplification of scenario 1: the primary claim line is reimbursed at 100%, all secondary claim lines are reimbursed at 50%.

Combination Adjustment Rules

Rule Determinant Procedures Modifiers Secondary and Tertiary Procedures Phase PPC Quantifier

CAR1[1]

Allowed Amount

(In) Multiple Procedure Reduction Group (range 10000 - 26999)

-

N/A

1

50%

Claim 1

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$200

2

03-03-2012

26651

$500

3

04-03-2012

11721

$200

4

04-03-2012

17004

$50

Result

  • Claim lines 1 and 2 have the same price input date. Claim line 2 has the highest allowed, so claim line 1 is reduced to 50%.

  • Claim lines 3 and 4 have the same price input date. Claim line 3 has the highest allowed, so claim line 4 is reduced to 50%.

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$100

2

Primary

$500

3

Primary

$200

4

Secondary

$25

Now claim 1 is finalized after which claim 2 is entered and processed.

Claim 2

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$600

2

03-03-2012

26651

$400

Result

  • Claim lines 1 and 2 become secondary because claim line 2 of claim1 is primary even though claim line 1 of claim 2 has a higher allowed amount. An informative message is attached to claim line 1 of claim 2 to draw attention to this fact.

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$300

2

Secondary

$200

Scenario 5 (Multiple Surgery in Different Claims with Reprocessing)

Consider exactly the same configuration and initial processing as in scenario 4. What would happen if we unfinalize and reprocess one or more of these claims:

  • If we unfinalize only claim 2 and reprocess claim 2, the outcome is obviously the same

  • If we unfinalize both claim 1 and claim 2 and reprocess in the same order (that is, claim 1 first), then the outcome is also obviously the same

  • If we unfinalize only claim 1 and reprocess, then the outcome will also be the same: claim line 2 of claim 1 will still become primary because it "sees" that the finalized claim 2 did not deliver the primary

  • If we unfinalize both claim 1 and claim 2 and then first finalize claim 2, however, things change (which is probably exactly why we unfinalized). See how this goes:

Claim 2

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$600

2

03-03-2012

26651

$400

Result

  • Claim line 1 becomes primary because it no longer "sees" another primary.

Line Primary or Secondary Allowed Amount[3]

1

Primary

$600

2

Secondary

$200

After claim 2 has been finalized, we now reprocess claim 1.

Claim 1

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$200

2

03-03-2012

26651

$500

3

04-03-2012

11721

$200

4

04-03-2012

17004

$50

Result

  • Claim lines 1 and 2 now become secondary.

  • Claim lines 3 and 4 are processed exactly as before, because the price input date is different

Line Primary or Secondary Allowed Amount [3]

1

Secondary

$100

2

Secondary

$250

3

Primary

$200

4

Secondary

$25

Scenario 6 (Multiple Surgery in Different Claims with Pending)

Consider exactly the same configuration as in scenario 4. Also assume that the same two claims come in. But now claim 1 is priced and after that pended, either in manual pricing or in manual pricing adjudication.

Claim 1

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$200

2

03-03-2012

26651

$500

3

04-03-2012

11721

$200

4

04-03-2012

17004

$50

Result in Pend Status (Not Finalized Yet)

  • Claim lines 1 and 2 have the same price input date. Claim line 2 has the highest allowed, so claim line 1 is reduced to 50%.

  • Claim lines 3 and 4 have the same price input date. Claim line 3 has the highest allowed, so claim line 4 is reduced to 50%.

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$100

2

Primary

$500

3

Primary

$200

4

Secondary

$25

Now claim 2 is entered and processed.

Claim 2

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$600

2

03-03-2012

26651

$400

Result

  • Because claim 1 is not yet finalized, claim 2 does not see the pricing results from claim 1. Therefore, claim line 1 of claim 2 will be recognized as primary while claim line 2 of claim 2 will be recognized as secondary.

Line Primary or Secondary Allowed Amount[3]

1

Primary

$600

2

Secondary

$200

Now the pend of claim 1 is resolved and submitted after which claim 1 will be either pricing finalized (for external benefits) or finalized (for internal benefits). If the previous results would just become finalized, then the combination adjustment rule would end up having two primary claim lines for the same person, provider and price input date. During pricing finalization or finalization, however, it is detected that claim 2 is finalized in the meantime and therefore claim 1 is priced again taking into account the results of claim 2.

Result After Pend Resolving and Finalization

  • Claim lines 1 and 2 both become secondary because claim line 1 of claim 2 is seen as primary

  • Claim lines 3 and 4 get the same outcome because the results of claim 2 on the 04-03-2012 don’t influence the evaluation on 04-03-2012.

Claim 1

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$100

2

Secondary

$250

3

Primary

$200

4

Secondary

$25

Scenario 7 (Multiple Surgery With Manual Pricing)

Consider exactly the same configuration as in scenario 4 and assume that claim 1 comes in (slightly different from the previous scenarios), is priced and after that pended in Manual Pricing.

Claim 1

Line Price Input Date Procedure Allowed Amount[2]

1

03-03-2012

10021

$100

2

03-03-2012

26651

$50

3

03-03-2012

11721

$50

Result in Manual Pricing (Before Manual Changes)

  • Claim lines 1, 2 and 3 have the same price input date. Claim line 1 has the highest allowed, so claim lines 2 and 3 are reduced to 50%.

Line Primary or Secondary Allowed Amount[3]

1

Primary

$100

2

Secondary

$25

3

Secondary

$25

Now manual changes are being made to one or more claim lines, after which these claim lines are set to Keep Pricing. This leads to a recalculation in which the pricing results of the Keep Pricing claim lines are left untouched, but the evaluation of the combination adjustment rule (including marking them as primary or secondary) is redone. A couple of variations to illustrate this.

Variant 1

We change the allowed amount of claim line 1 to $ 80 and set it to Keep Pricing.

Result

  • Because claim line 1 still qualifies as the highest amount, the evaluation of the combination adjustment rule does not change, so the outcome will be:

Line Primary or Secondary Allowed Amount[3]

1

Primary[8]

$80

2

Secondary

$25

3

Secondary

$25

Variant 2

We change the allowed amount of claim line 1 to $ 40 and set it to Keep Pricing.

Result

  • Now claim line 2 qualifies as the highest amount, the evaluation of the combination adjustment rule changes the outcome to:

Line Primary or Secondary Allowed Amount[3]

1

Secondary[9]

$40

2

Primary

$50

3

Secondary

$25

Variant 3

We change the allowed amount of claim line 2 to $ 125 and set it to Keep Pricing and we set claim line 1 to Keep Pricing without changing the allowed amount.

Result

  • Now claim line 2 qualifies as the highest amount, the evaluation of the combination adjustment rule changes the outcome to:

Line Primary or Secondary Allowed Amount[3]

1

Secondary

$100

2

Primary [10]

$125

3

Secondary

$25

Scenario 8 (Multiple Surgery With Tertiary Reductions)

The configuration is a simplification of scenario 1 (including tertiary reductions): the primary claim line is reimbursed at 100%, all secondary claim lines are reimbursed at 75%. In a specific period tertiary claim lines are reimbursed at 50%; outside this period there is no tertiary reduction.

Combination Adjustment Rules

Rule Determinant Procedures Modifiers Secondary and Tertiary Procedures Phase PPC Quantifier Primary Line Formula Secondary and Tertiary Line Formulas

CAR1[1]

Allowed Amount

(In) Multiple Procedure Reduction Group (range 10000 - 26999)

-

N/A

1

-

-

-

Combination Adjustment Rule Adjustment Percentages

Line Category Percentage Start Date End Date

Secondary

75%

01-01-2012

-

Tertiary

50%

01-01-2012

06-30-2012

Claim

Line Price Input Date Procedure Allowed Amount[2]

1

06-29-2012

10021

$200

2

06-29-2012

26651

$500

3

06-29-2012

22346

$500

4

06-29-2012

20111

$400

5

07-01-2012

18908

$100

6

07-01-2012

11721

$200

7

07-01-2012

17004

$50

Result

  • Claim lines 1, 2, 3 and 4 have the same price input date (inside the tertiary reduction period)

  • Claim lines 2 and 3 both have the highest allowed amount per unit ($500)

  • Claim line 2 is recognized as the primary claim line because it has a lower sequence number

  • Claim line 3 is recognized as the secondary claim line

  • Claim lines 1 and 4 are recognized as tertiary claim lines

  • Claim lines 5, 6 and 7 have the same price input date (outside the tertiary reduction period)

Line Primary or Secondary or Tertiary Allowed Amount[3]

1

Tertiary

$100

2

Primary

$500

3

Secondary

$375

4

Tertiary

$200

5

Secondary

$75

6

Primary

$200

7

Secondary

$37,50
1. The rule is referenced by a provider pricing clause with only a start date filled. The other dimensions of the combination adjustment rule (diagnoses, classification, fee schedule type and other condition) are unspecified. The rule does not specify adjustment percentages.
2. The allowed amount before the evaluation of the combination adjustment rule (calculated using a fee schedule reimbursement method; which is out of the scope of this example)
3. The allowed amount after the evaluation of the combination adjustment rule
4. The rule is referenced by a provider pricing clause with only a start date filled. The other dimensions of the adjustment rule (diagnoses, classification, fee schedule type and other condition) are unspecified.
5. The allowed amount before the evaluation of the adjustment rule (calculated using a fee schedule reimbursement method; which is out of the scope of this example)
6. The allowed amount after the evaluation of the adjustment rule
7. The allowed amount before the evaluation of the adjustment rules (calculated using a fee schedule reimbursement method; which is out of the scope of this example)
8. Note that the claim line is no longer tracked (only evaluated) as primary because the tracking is deleted when the allowed amount is updated
9. Note that the claim line is not tracked (only evaluated) as secondary because the tracking is deleted when the allowed amount is updated
10. Note that the claim line is not tracked (only evaluated) as primary because the tracking is deleted when the allowed amount is updated