Common use of Cost Avoidance Clause in Contracts

Cost Avoidance. The Contractor shall cost avoid all claims for services that are subject to third-party payment and may deny a service to an enrolled person if it knows that a third party (i.e. other insurer) shall provide the service. However, if a third-party insurer (other than Medicare) requires the enrolled person to pay any copayment, coinsurance or deductible, the Contractor is responsible for making these payments, even if the services are provided outside of the Contractor's network. The Contractor's liability for coinsurance and deductibles is limited to what the Contractor would have paid for the entire service pursuant to a written agreement with the Subcontracted Provider or the ADHS/DBHS max cap rate, less any amount paid by the third party. The Contractor shall decide whether it is more cost-effective to provide the service within its network or pay coinsurance and deductibles for a service outside its network. For continuity of care, the Contractor may also choose to provide the service within its network. If the Contractor refers the enrolled person for services to a third-party insurer (other than Medicare), and the insurer requires payment in advance of all copayments, coinsurance and deductibles, the Contractor shall make such payments in advance. If the Contractor knows that the third party insurer shall neither pay for nor provide the Covered Service, and the service is medically necessary, the Contractor shall not deny the service nor require a written denial letter. If the Contractor does not know whether a particular service is covered by the third party, and the service is medically necessary, the Revised 11-01-01 Effective 10-03-01 Page 24

Cost Avoidance. The Contractor shall cost avoid all claims for services that are subject to third-party payment and may deny a service to an enrolled person if it knows that a third party (i.e. other insurer) shall provide the service. However, if a third-party insurer (other than Medicare) requires the enrolled person to pay any copayment, coinsurance or deductible, the Contractor is responsible for making these payments, even if the services are provided outside of the Contractor's network. The Contractor's liability for coinsurance and deductibles is limited to what the Contractor would have paid for the entire service pursuant to a written agreement with the Subcontracted Provider or the ADHS/DBHS max cap rate, less any amount paid by the third party. The Contractor shall decide whether it is more cost-effective to provide the service within its network or pay coinsurance and deductibles for a service outside its network. For continuity of care, the Contractor may also choose to provide the service within its network. If the Contractor refers the enrolled person for services to a third-party insurer (other than Medicare), and the insurer requires payment in advance of all copayments, coinsurance and deductibles, the Contractor shall make such payments in advance. If the Contractor knows that the third party insurer shall neither pay for nor provide the Covered Service, and the service is medically necessary, the Contractor shall not deny the service nor require a written denial letter. If the Contractor does not know whether a particular service is covered by the third party, and the service is medically necessary, the Revised 11Contractor shall contact the third party and determine whether or not such service is covered rather than requiring the enrolled person to do so. The requirement to cost avoid applies to all AHCCCS Title XIX and Title XXI covered services. In emergencies, the Contractor shall provide the necessary services and then coordinate payment with the third-01party payer. The Contractor shall also provide medically necessary transportation so that enrolled persons can receive third-01 Effective 10-03-01 Page 24party benefits. Further, if a service is medically necessary, the Contractor shall ensure that its cost avoidance efforts do not prevent an enrolled person from receiving such service and that the enrolled person shall not be required to pay any coinsurance or deductibles for use of the other insurer's providers.

Cost Avoidance. The Contractor shall cost avoid all claims for services that are subject to third-party payment and may deny a service to an enrolled person if it knows that a third party (i.e. other insurer) shall provide the service. However, if a third-party insurer (other than Medicare) requires the enrolled person to pay any copayment, coinsurance or deductible, the Contractor is responsible for making these payments, even if the services are provided outside of the Contractor's network. The Contractor's liability for coinsurance and deductibles is limited to what the Contractor would have paid for the entire service pursuant to a written agreement with the Subcontracted Provider or the ADHS/DBHS ADHS max cap rate, less any amount paid by the third party. The Contractor shall decide whether it is more cost-effective to provide the service within its network or pay coinsurance and deductibles for a service outside its network. For continuity of care, the Contractor may also choose to provide the service within its network. If the Contractor refers the enrolled person for services to a third-party insurer Final Sep 30-02 Effective 7-01-02 Page 25 -------------------------------------------------------------------------------- [LOGO] Community Partnership SUBCONTRACT AGREEMENT of Southern Arizona COMPREHENSIVE SERVICE NETWORK Regional Behavioral The Providence Service Corporation Health Authority AMENDMENT #6 ------------------------------------------- CONTRACT NUMBER: A0108 FY 02/03 -------------------------------------------------------------------------------- (other than Medicare), and the insurer requires payment in advance of all copayments, coinsurance and deductibles, the Contractor shall make such payments in advance. If the Contractor knows that the third party insurer shall neither pay for nor provide the Covered Service, and the service is medically necessary, the Contractor shall not deny the service nor require a written denial letter. If the Contractor does not know whether a particular service is covered by the third party, and the service is medically necessary, the Revised 11Contractor shall contact the third party and determine whether or not such service is covered rather than requiring the enrolled person to do so. The requirement to cost avoid applies to all AHCCCS Title XIX and Title XXI covered services. In emergencies, the Contractor shall provide the necessary services and then coordinate payment with the third-01party payer. The Contractor shall also provide medically necessary transportation so that enrolled persons can receive third-01 Effective 10-03-01 Page 24party benefits. Further, if a service is medically necessary, the Contractor shall ensure that its cost avoidance efforts do not prevent an enrolled person from receiving such service and that the enrolled person shall not be required to pay any coinsurance or deductibles for use of the other insurer's providers.

Cost Avoidance. The Contractor shall cost avoid all claims for services that are subject In accordance with Department requirements in the Managed Care Policy and Procedure Guide, the CONTRACTOR must have processes, methods and resources necessary to receive TPL data from the Department and to identify third-party coverage for its members. This information will be used in managing Provider payment at the front end before the Claim is paid. The CONTRACTOR must have appropriate edits in the Claims system to ensure that Claims are properly coordinated when other insurance is identified. The CONTRACTOR’s Medicaid reimbursement and may deny Third Party payment cannot exceed the amount the Provider has agreed to accept as payment in full from the Third Party payer. If the probable existence of TPL has been established at the time the Claim is filed, the CONTRACTOR must reject the Claim and return it to the Provider for a service determination of the amount of any TPL. The CONTRACTOR shall xxxx or inform the Provider to an enrolled person if it knows that a third party (i.e. other insurer) shall provide xxxx the service. However, if a third-party insurer coverage within thirty (other than Medicare30) requires the enrolled person to pay any copayment, coinsurance or deductibleDays of identification. For certain services, the Contractor is responsible CONTRACTOR should not cost-avoid Claims and will pursue recovery under a policy known as “Pay & Chase”. See the Managed Care Policy and Procedure Guide for making these payments, even if the list of services. While Providers of such services are provided outside of encouraged to file with any liable Third Party before the Contractor's networkCONTRACTOR, if they choose not to do so, the CONTRACTOR will pay the Claims and xxxx liable Third Parties directly through a Benefit Recovery Program. The Contractor's liability CONTRACTOR shall deny payment on a Claim that has been denied by a known Third Party payer, as defined in Section 10 of this contract, when the reason for coinsurance and deductibles denial is limited to what the Contractor would have paid for the entire service pursuant to a written agreement with the Subcontracted Provider or Medicaid Managed Care Member’s failure to follow prescribed Procedures, including but not limited to, failure to obtain Prior Authorization, timely filing, etc. Post-Payment Recovery Post-payment recovery is necessary in cases where the ADHS/DBHS max cap rateCONTRACTOR has not established the probable existence of a liable Third Party at the time services were rendered or paid for, less any for members who become retroactively eligible for Medicare, or in situations when the CONTRACTOR was unable to cost-avoid. The CONTRACTOR must have Procedures in place to ensure that a Provider who has been paid by the CONTRACTOR and subsequently receives reimbursement from a Third Party repays the CONTRACTOR either the full amount paid by Medicaid or the full amount paid by the third partyThird Party, whichever is less. CONTRACTOR Post-Payment Recovery Requirements In accordance with Department requirements in the Managed Care Policy and Procedure Guide, the CONTRACTOR must have established Procedures for recouping post-payment. The Contractor Procedures must be available for review upon request by the Department. The CONTRACTOR must void Encounters for Claims that are recouped in full. The CONTRACTOR will submit a replacement Encounter for Recoupments that result in an adjusted Claim value. The CONTRACTOR shall decide whether seek reimbursement in accident/trauma-related cases when Claims in the aggregate equal or exceed $250. The CONTRACTOR shall report all recoveries it is more costcollects outside of the Claims processing system, including settlements. The CONTRACTOR shall treat such recoveries as offsets to medical expenses for the purposes of reporting. Retroactive Eligibility for Medicare The Department or its designee will notify the CONTRACTOR when Medicaid Managed Care Members become retroactively eligible for Medicare. The Department will recoup premium payments that do not reflect the dual status of the member. The Managed Care Policy and Procedure Guide provides specific Procedures for Subcontractor Recoupment of Medicaid payments while the member had dual Medicare and Medicaid coverage. Third-effective Party Liability Reporting Disenrollment Requests The CONTRACTOR must submit a Disenrollment request if it has identified the presence of Third Party resource that results in the individual’s being ineligible for Enrollment in CONTRACTOR’s Health Plan. Third-Party Liability Recoveries by the Department After one hundred and eighty (180) Days from the date of payment of a Claim subject to provide the service within its network or pay coinsurance and deductibles for a service outside its network. For continuity of carerecovery, the Contractor may also choose Department reserves the right to provide the service within its network. If the Contractor refers the enrolled person for services to a third-party insurer (other than Medicare), and the insurer requires payment in advance attempt recovery independent of all copayments, coinsurance and deductibles, the Contractor shall make such payments in advance. If the Contractor knows that the third party insurer shall neither pay for nor provide the Covered Service, and the service is medically necessary, the Contractor shall not deny the service nor require a written denial letter. If the Contractor does not know whether a particular service is covered any action by the third party, and the service is medically necessary, the Revised 11CONTRACTOR. The Department will retain all funds received as a result of any state-01-01 Effective 10-03-01 Page 24initiated recovery or Subrogation action.