When a provider submits a claim to CMS, the payor must remit payment within the applicable number of days. If the claim is not processed per established timeframes, CMS must pay interest on the unpaid balance (the current rate through June 2022 is 1.625%). How does it all work? Read on for details.
The Medicare Claims Processing Manual explains its guidelines for a “clean claim.” The payment ceiling – or deadline for CMS to process a claim – is 30 days from date of receipt. This is the period the CMS contractor has to pay or deny the claim. The receipt date is the date the claim was received in the correct format and with sufficient data as to be deemed complete or clean. Electronic claims transmitted directly to a contractor or to the contractor’s contracted clearinghouse must be received by 5:00pm in the contractor’s time zone, or by its closing time, if different.
The same timeframes apply for paper claims as long as they are delivered to the contractor’s place of business. Paper or electronic claims that don’t meet legibility, format or completion requirements are not considered received and may be rejected.
The payment floor is a waiting time during which the contractor may not pay or issue a final determination on the claim. The payment floor date is the earliest day after receipt of a clean claim that the payment may be made and the count begins on the day after the date of receipt. The payment floor for electronic claims is 13 days and 26 days for paper claims.
The CMS contractor must pay interest on a clean (non-PIP) claim for which it doesn’t make payment – and for which payment is due – within the payment ceiling. Interest is due on the net payment, minus deductible, copayment and/or MSP. Payments are rounded to the nearest penny.
Interest is not payable on clean claims that were paid after an initial denial and provider appeal.