The Vermont Statutes Online

Title 18 : Health

Chapter 221 : Health Care Administration

Subchapter 002 : CLAIMS PROCESSING AND CONTRACT STANDARDS

• § 9418a. Processing claims, downcoding, and adherence to coding rules [Effective until January 1, 2025; see also section 9418a effective January 1, 2025 and section 9418a effective January 1, 2026, set out below]

  (a) Health plans, contracting entities, covered entities, and payers shall accept and initiate the processing of all health care claims submitted by a health care provider pursuant to and consistent with the current version of the American Medical Association’s Current Procedural Terminology (CPT) codes, reporting guidelines, and conventions; the Centers for Medicare and Medicaid Services Healthcare Common Procedure Coding System (HCPCS); American Society of Anesthesiologists; the National Correct Coding Initiative (NCCI); the National Council for Prescription Drug Programs coding; or other appropriate nationally recognized standards, guidelines, or conventions approved by the Commissioner.

  (b) When editing claims, health plans, contracting entities, covered entities, and payers shall adhere to edit standards except as provided in subsection (c) of this section:

  (1) the CPT, HCPCS, and NCCI;

  (2) national specialty society edit standards; or

  (3) other appropriate nationally recognized edit standards, guidelines, or conventions approved by the Commissioner.

  (c) Adherence to the edit standards in subdivision (b)(1) or (2) of this section is not required:

  (1) when necessary to comply with State or federal laws, rules, regulations, or coverage mandates; or

  (2) for edits that the payer determines are more favorable to providers than the edit standards in subdivisions (b)(1) through (3) of this section or to address new codes not yet incorporated by a payer’s edit management software, provided the edit standards are developed with input from the relevant Vermont provider community and national provider organizations and provided the edits are available to providers on the plan’s websites and in their newsletters.

  (d) Nothing in this section shall preclude a health plan, contracting entity, covered entity, or payer from determining that any such claim is not eligible for payment in full or in part, based on a determination that:

  (1) the claim is contested as defined in subdivision 9418(a)(2) of this title;

  (2) the service provided is not a covered benefit under the contract, including a determination that such service is not medically necessary or is experimental or investigational;

  (3) the insured did not obtain a referral, prior authorization, or precertification, or satisfy any other condition precedent to receiving covered benefits from the health care provider;

  (4) the covered benefit exceeds the benefit limits of the contract;

  (5) the person is not eligible for coverage or is otherwise not compliant with the terms and conditions of his or her coverage agreement;

  (6) the health plan has a reasonable belief that fraud or other intentional misconduct has occurred; or

  (7) the health plan, contracting entity, covered entity, or payer determines through coordination of benefits that another entity is liable for the claim.

  (e) Nothing in this section shall be deemed to require a health plan, contracting entity, covered entity, or payer to pay or reimburse a claim, in full or in part, or to dictate the amount of a claim to be paid by a health plan, contracting entity, covered entity, or payer to a health care provider.

  (f) No health plan, contracting entity, covered entity, or payer shall automatically reassign or reduce the code level of evaluation and management codes billed for covered services (downcoding), except that a health plan, contracting entity, covered entity, or payer may reassign a new patient visit code to an established patient visit code based solely on CPT codes, CPT guidelines, and CPT conventions.

  (g) Notwithstanding the provisions of subsection (d) of this section, and other than the edits contained in the conventions in subsections (a) and (b) of this section, health plans, contracting entities, covered entities, and payers shall continue to have the right to deny, pend, or adjust claims for services on other bases and shall have the right to reassign or reduce the code level for selected claims for services based on a review of the clinical information provided at the time the service was rendered for the particular claim or a review of the information derived from a health plan’s fraud or abuse billing detection programs that create a reasonable belief of fraudulent or abusive billing practices, provided that the decision to reassign or reduce is based primarily on a review of clinical information.

  (h) Every health plan, contracting entity, covered entity, and payer shall publish on its provider website and in its provider newsletter if applicable:

  (1) the name of any commercially available claims editing software product that the health plan, contracting entity, covered entity, or payer utilizes;

  (2) the standard or standards, pursuant to subsection (b) of this section, that the entity uses for claim edits;

  (3) the payment percentages for modifiers; and

  (4) any significant edits, as determined by the health plan, contracting entity, covered entity, or payer, added to the claims software product after the effective date of this section, which are made at the request of the health plan, contracting entity, covered entity, or payer.

  (i) Upon written request, the health plan, contracting entity, covered entity, or payer shall also directly provide the information in subsection (h) of this section to a health care provider who is a participating member in the health plan’s, contracting entity’s, covered entity’s, or payer’s provider network.

  (j) For purposes of this section, “health plan” includes a workers’ compensation policy of a casualty insurer licensed to do business in Vermont.

  (k) BlueCross BlueShield of Vermont and the Vermont Medical Society are requested to continue convening a work group consisting of health plans, health care providers, State agencies, and other interested parties to study the edit standards in subsection (b) of this section, the edit standards in national class action settlements, and edit standards and edit transparency standards established by other states to determine the most appropriate way to ensure that health care providers can access information about the edit standards applicable to the health care services they provide. The work group is requested to provide an annual progress report to the House Committee on Health Care and the Senate Committees on Health and Welfare and on Finance.

  (l) With respect to the work group established under subsection (k) of this section and to the extent required to avoid violations of federal antitrust laws, the Department shall facilitate and supervise the participation of members of the work group. (Added 2007, No. 203 (Adj. Sess.), § 28, eff. June 10, 2008; amended 2009, No. 61, § 30; 2011, No. 21, § 18; 2011, No. 171 (Adj. Sess.), § 11a, eff. May 16, 2012; 2023, No. 111 (Adj. Sess.), § 2, eff. January 1, 2025 and January 1, 2026; 2023, No. 111 (Adj. Sess.), § 8, eff. January 1, 2028.)

• § 9418a. Processing claims, downcoding, and adherence to coding rules [Effective January 1, 2025; Effective until January 1, 2026; see also section 9418a effective until January 1, 2025, set out above and section 9418a effective January 1, 2026, set out below]

  (a) Health plans, contracting entities, covered entities, and payers shall accept and initiate the processing of all health care claims submitted by a health care provider pursuant to and consistent with the current version of the American Medical Association’s Current Procedural Terminology (CPT) codes, reporting guidelines, and conventions; the Centers for Medicare and Medicaid Services Healthcare Common Procedure Coding System (HCPCS); American Society of Anesthesiologists; the National Correct Coding Initiative (NCCI); the National Council for Prescription Drug Programs coding; or other appropriate nationally recognized standards, guidelines, or conventions approved by the Commissioner.

  (b) When editing claims, health plans, contracting entities, covered entities, and payers shall adhere to edit standards except as provided in subsection (c) of this section:

  (1) the CPT, HCPCS, and NCCI;

  (2) national specialty society edit standards; or

  (3) other appropriate nationally recognized edit standards, guidelines, or conventions approved by the Commissioner.

  (c) Adherence to the edit standards in subdivision (b)(1) or (2) of this section is not required:

  (1) when necessary to comply with State or federal laws, rules, regulations, or coverage mandates; or

  (2) for edits that the payer determines are more favorable to providers than the edit standards in subdivisions (b)(1) through (3) of this section or to address new codes not yet incorporated by a payer’s edit management software, provided the edit standards are developed with input from the relevant Vermont provider community and national provider organizations and provided the edits are available to providers on the plan’s websites and in their newsletters.

  (d) [Reserved.]

  (e)(1) Except as otherwise provided in subdivision (2) of this subsection, no health plan, contracting entity, covered entity, or payer shall subject any health care provider to prepayment coding validation edit review. As used in this subsection, “prepayment coding validation edit review” means any action by the health plan, contracting entity, covered entity, or payer, or by a contractor, assignee, agent, or other entity acting on its behalf, requiring a health care provider to provide medical record documentation in conjunction with or after submission of a claim for payment for health care services delivered, but before the claim has been adjudicated.

  (2) Nothing in this subsection shall be construed to prohibit targeted prepayment coding validation edit review of a specific provider, provider group, or facility under certain circumstances, including evaluating high-dollar claims; verifying complex financial arrangements; investigating member questions; conducting post-audit monitoring; addressing a reasonable belief of fraud, waste, or abuse; or other circumstances determined by the Commissioner through a bulletin or guidance.

  (f) Nothing in this section shall preclude a health plan, contracting entity, covered entity, or payer from determining that any such claim is not eligible for payment in full or in part, based on a determination that:

  (1) the claim is contested as defined in subdivision 9418(a)(2) of this title;

  (2) the service provided is not a covered benefit under the contract, including a determination that such service is not medically necessary or is experimental or investigational;

  (3) the insured did not obtain a referral, prior authorization, or precertification, or satisfy any other condition precedent to receiving covered benefits from the health care provider;

  (4) the covered benefit exceeds the benefit limits of the contract;

  (5) the person is not eligible for coverage or is otherwise not compliant with the terms and conditions of his or her coverage agreement;

  (6) the health plan has a reasonable belief that fraud or other intentional misconduct has occurred; or

  (7) the health plan, contracting entity, covered entity, or payer determines through coordination of benefits that another entity is liable for the claim.

  (g) Nothing in this section shall be deemed to require a health plan, contracting entity, covered entity, or payer to pay or reimburse a claim, in full or in part, or to dictate the amount of a claim to be paid by a health plan, contracting entity, covered entity, or payer to a health care provider.

  (h) No health plan, contracting entity, covered entity, or payer shall automatically reassign or reduce the code level of evaluation and management codes billed for covered services (downcoding), except that a health plan, contracting entity, covered entity, or payer may reassign a new patient visit code to an established patient visit code based solely on CPT codes, CPT guidelines, and CPT conventions.

  (i) Notwithstanding the provisions of subsection (f) of this section, and other than the edits contained in the conventions in subsections (a) and (b) of this section, health plans, contracting entities, covered entities, and payers shall continue to have the right to deny, pend, or adjust claims for services on other bases and shall have the right to reassign or reduce the code level for selected claims for services based on a review of the clinical information provided at the time the service was rendered for the particular claim or a review of the information derived from a health plan’s fraud or abuse billing detection programs that create a reasonable belief of fraudulent or abusive billing practices, provided that the decision to reassign or reduce is based primarily on a review of clinical information.

  (j) Every health plan, contracting entity, covered entity, and payer shall publish on its provider website and in its provider newsletter if applicable:

  (1) the name of any commercially available claims editing software product that the health plan, contracting entity, covered entity, or payer utilizes;

  (2) the standard or standards, pursuant to subsection (b) of this section, that the entity uses for claim edits;

  (3) the payment percentages for modifiers; and

  (4) any significant edits, as determined by the health plan, contracting entity, covered entity, or payer, added to the claims software product after the effective date of this section, which are made at the request of the health plan, contracting entity, covered entity, or payer.

  (k) Upon written request, the health plan, contracting entity, covered entity, or payer shall also directly provide the information in subsection (j) of this section to a health care provider who is a participating member in the health plan’s, contracting entity’s, covered entity’s, or payer’s provider network.

  (l) For purposes of this section, “health plan” includes a workers’ compensation policy of a casualty insurer licensed to do business in Vermont.

  [Subsection (m) repealed effective January 1, 2028.]

  (m) There is established a working group comprising the health plans, contracting entities, covered entities, and payers subject to the reporting requirement in subsection 9414a(b) of this title; representatives of hospitals and health care providers,; representatives of the Department of Financial Regulation and of other relevant State agencies,; and other interested parties to study trends in coding and billing that health plans, contracting entities, covered entities, or payers, or a combination of them, seek to address through claim editing. The working group shall provide a progress report to the House Committee on Health Care and the Senate Committees on Health and Welfare and on Finance upon request.

  [Subsection (n) repealed effective January 1, 2028.]

  (n) With respect to the working group established under subsection (m) of this section and to the extent required to avoid violations of federal antitrust laws, the Department shall facilitate and supervise the participation of members of the working group. (Added 2007, No. 203 (Adj. Sess.), § 28, eff. June 10, 2008; amended 2009, No. 61, § 30; 2011, No. 21, § 18; 2011, No. 171 (Adj. Sess.), § 11a, eff. May 16, 2012; 2023, No. 111 (Adj. Sess.), § 2, eff. January 1, 2025 and January 1, 2026; 2023, No. 111 (Adj. Sess.), § 8, eff. January 1, 2028.)

• § 9418a. Processing claims, downcoding, and adherence to coding rules [Effective January 1, 2026; see also section 9418a effective until January 1, 2025 and section 9418a effective January 1, 2025, set out above]

  (a) Health plans, contracting entities, covered entities, and payers shall accept and initiate the processing of all health care claims submitted by a health care provider pursuant to and consistent with the current version of the American Medical Association’s Current Procedural Terminology (CPT) codes, reporting guidelines, and conventions; the Centers for Medicare and Medicaid Services Healthcare Common Procedure Coding System (HCPCS); American Society of Anesthesiologists; the National Correct Coding Initiative (NCCI); the National Council for Prescription Drug Programs coding; or other appropriate nationally recognized standards, guidelines, or conventions approved by the Commissioner.

  (b)(1) Except as provided in subsection (c) of this section, when editing claims, health plans, contracting entities, covered entities, and payers shall require not more than the following edit standards, processes, and guidelines:

  (A) for claims for outpatient and professional services, the NCCI as in effect for Medicare;

  (B) for facility claims, the Medicare Code Editor as in effect for Medicare;

  (C) for pharmacy claims, appropriate nationally recognized edit standards, guidelines, or conventions; and

  (D) for any other claim not addressed by subdivision (A), (B), or (C) of this subdivision (1), other appropriate nationally recognized edit standards, guidelines, or conventions approved by the Commissioner.

  (2) For outpatient services, professional services, and facility claims, a health plan, contracting entity, covered entity, or payer shall apply the relevant edit standards, processes, and guidelines from NCCI or Medicare Code Editor pursuant to subdivisions (1)(A) and (B) of this subsection that were in effect for Medicare on the date of the claim submission; provided, however, that if Medicare has changed an applicable edit standard, process, or guideline within 90 days prior to the date of the claim submission, the health plan, contracting entity, covered entity, or payer may use the version of the edit standard, process, or guideline that Medicare had applied prior to the most recent change if the health plan, contracting entity, covered entity, or payer has not yet released an updated version of its edits in accordance with subsection (d) of this section.

  (c) Adherence to the edit standards in subsection (b) of this section is not required:

  (1) when necessary to comply with State or federal laws, rules, regulations, or coverage mandates; or

  (2) for edits that the payer determines are more favorable to providers than the edit standards in subsection (b) of this section or to address new codes not yet incorporated by a payer’s edit management software, provided the edit standards are:

  (A) developed with input from the relevant Vermont provider community and national provider organizations;

  (B) clearly supported by nationally recognized standards, guidelines, or conventions approved by the Commissioner of Financial Regulation; and

  (C) available to providers on the plan’s websites and in its newsletters or equivalent electronic communications.

  (d) Health plans, contracting entities, covered entities, and payers shall not release edits more than quarterly, to take effect on January 1, April 1, July 1, or October 1, as applicable, and the edits shall not be implemented without filing with the Commissioner of Financial Regulation to ensure consistency with nationally recognized standards guidelines, and conventions, and at least 30 days’ advance notice to providers. Whenever Medicare changes an edit standard, process, or guideline that it applies to outpatient service, professional service, or facility claims, each health plan, contracting entity, covered entity, or payer shall incorporate those modifications into its next quarterly release of edits.

  (e)(1) Except as otherwise provided in subdivision (2) of this subsection, no health plan, contracting entity, covered entity, or payer shall subject any health care provider to prepayment coding validation edit review. As used in this subsection, “prepayment coding validation edit review” means any action by the health plan, contracting entity, covered entity, or payer, or by a contractor, assignee, agent, or other entity acting on its behalf, requiring a health care provider to provide medical record documentation in conjunction with or after submission of a claim for payment for health care services delivered, but before the claim has been adjudicated.

  (2) Nothing in this subsection shall be construed to prohibit targeted prepayment coding validation edit review of a specific provider, provider group, or facility under certain circumstances, including evaluating high-dollar claims; verifying complex financial arrangements; investigating member questions; conducting post-audit monitoring; addressing a reasonable belief of fraud, waste, or abuse; or other circumstances determined by the Commissioner through a bulletin or guidance.

  (f) Nothing in this section shall preclude a health plan, contracting entity, covered entity, or payer from determining that any such claim is not eligible for payment in full or in part, based on a determination that:

  (1) the claim is contested as defined in subdivision 9418(a)(2) of this title;

  (2) the service provided is not a covered benefit under the contract, including a determination that such service is not medically necessary or is experimental or investigational;

  (3) the insured did not obtain a referral, prior authorization, or precertification, or satisfy any other condition precedent to receiving covered benefits from the health care provider;

  (4) the covered benefit exceeds the benefit limits of the contract;

  (5) the person is not eligible for coverage or is otherwise not compliant with the terms and conditions of his or her coverage agreement;

  (6) the health plan has a reasonable belief that fraud or other intentional misconduct has occurred; or

  (7) the health plan, contracting entity, covered entity, or payer determines through coordination of benefits that another entity is liable for the claim.

  (g) Nothing in this section shall be deemed to require a health plan, contracting entity, covered entity, or payer to pay or reimburse a claim, in full or in part, or to dictate the amount of a claim to be paid by a health plan, contracting entity, covered entity, or payer to a health care provider.

  (h) No health plan, contracting entity, covered entity, or payer shall automatically reassign or reduce the code level of evaluation and management codes billed for covered services (downcoding), except that a health plan, contracting entity, covered entity, or payer may reassign a new patient visit code to an established patient visit code based solely on CPT codes, CPT guidelines, and CPT conventions.

  (i) Notwithstanding the provisions of subsection (f) of this section, and other than the edits contained in the conventions in subsections (a) and (b) of this section, health plans, contracting entities, covered entities, and payers shall continue to have the right to deny, pend, or adjust claims for services on other bases and shall have the right to reassign or reduce the code level for selected claims for services based on a review of the clinical information provided at the time the service was rendered for the particular claim or a review of the information derived from a health plan’s fraud or abuse billing detection programs that create a reasonable belief of fraudulent or abusive billing practices, provided that the decision to reassign or reduce is based primarily on a review of clinical information.

  (j) If adding an edit pursuant to subsection (b) or subdivision (c)(1) or (2) of this section, a health plan, contracting entity, covered entity, or payer shall publish on its provider website and in its provider newsletter or equivalent electronic provider communications:

  (1) the name of any commercially available claims editing software product that the health plan, contracting entity, covered entity, or payer utilizes;

  (2) the specific standard or standards that the entity uses for claim edits and how those claim edits are supported by those specific standards;

  (3) the payment percentages for modifiers; and

  (4) the specific edit or edits added to the claims software product.

  (k) Upon written request, the health plan, contracting entity, covered entity, or payer shall also directly provide the information in subsection (j) of this section to a health care provider who is a participating member in the health plan’s, contracting entity’s, covered entity’s, or payer’s provider network.

  (l) For purposes of this section, “health plan” includes a workers’ compensation policy of a casualty insurer licensed to do business in Vermont.

  [Subsection (m) repealed effective January 1, 2028.]

  (m) There is established a working group comprising the health plans, contracting entities, covered entities, and payers subject to the reporting requirement in subsection 9414a(b) of this title; representatives of hospitals and health care providers,; representatives of the Department of Financial Regulation and of other relevant State agencies,; and other interested parties to study trends in coding and billing that health plans, contracting entities, covered entities, or payers, or a combination of them, seek to address through claim editing. The working group shall provide a progress report to the House Committee on Health Care and the Senate Committees on Health and Welfare and on Finance upon request.

  [Subsection (n) repealed effective January 1, 2028.]

  (n) With respect to the working group established under subsection (m) of this section and to the extent required to avoid violations of federal antitrust laws, the Department shall facilitate and supervise the participation of members of the working group. (Added 2007, No. 203 (Adj. Sess.), § 28, eff. June 10, 2008; amended 2009, No. 61, § 30; 2011, No. 21, § 18; 2011, No. 171 (Adj. Sess.), § 11a, eff. May 16, 2012; 2023, No. 111 (Adj. Sess.), § 2, eff. January 1, 2025 and January 1, 2026; 2023, No. 111 (Adj. Sess.), § 8, eff. January 1, 2028.)