All 50 states currently have a Clean Claim Law. The effectiveness of the laws varies dramatically ranging from South Dakota which provides for no financial penalty to Texas where the penalty can go up to a requirement on the payer to pay billed charges; that’s right billed charges.

The fundamental concept behind Clean Claim Laws is that insurance companies must respond to a clean claim within a given period (typically 30 days for electronic claims). Systematic utilization of these laws will allow a medical billing service or medical practice to significantly accelerate and increase collections. In order to take advantage of the clean claim law one must have a monitoring system built into your medical billing process that identifies:

1. To which insurance companies does your state’s clean claim law apply (some payers are exempt);

2. The date your practice initially submits each medical claim;

3. Events that stop the clean claim clock (e.g., an information request from the payer),

4. When your practice has taken actions in response to payer requests;

5. When you received a payment or denial.

The design and implementation of the system and reporting can be challenging, but it can pay huge dividends in terms of the penalties from payers and in the way in which you will make payers take notice of your claims next time. You may actually find, as have other aggressive users of the clean claim law, that you will receive calls from payers assuring you they will process your claims quickly and asking you to please stop submitting complaints.

If you would like to better understand the benefits of implementing a Clean Claim Law tracking system before investing the time and energy into the design and implementation of the system, then run a pilot. Identify a payer that is consistently in violation of the Clean Claim Law. Select 30 to 50 claims from this payer and manually track all of the items outlined above. Once you have some violations, file a report following your state’s guidelines. This process will allow you to better understand what will be required to make such a system a permanent part of your medical billing and see the potential benefit to your practice.

Copyright 2006 by Carl Mays II