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DPW Implements Prudent Payment Process
February 26, 2006

The Department of Public Welfare (DPW) will implement prudent payment for the majority of provider types and provider specialty codes in the Fee-For-Service program effective April 1. The process has already been implemented for several provider types. Prudent payment refers to the business practice of paying clean claims within 30 days of receipt, but not sooner. Claims will be processed through the claims processing edits and audits, then will be held up to day 21 before being processed through the financial cycle. Only paid claims are subject to prudent payment. Denied claims will not be held.

Prudent payment will be implemented for the affected provider types in three monthly increments beginning April 1, with full implementation by July 1. The initial increment will hold claims for seven days before processing through the financial cycle. The next will hold claims for 14 days, the third for 21 days, and thereafter claims will be held for 21 days before processing through the financial cycle for payment. DPW requests that providers continue to submit claims as they have in the past. Only the processing timeframes will be changed and payment should be received within thirty days. If a claim does not appear on a remittance advice within 45 days, providers are advised to submit a new claim as described in the current billing instructions and to contact the toll free number for their provider type if payment is not received within 30 days of the date of receipt of the approved claim.

PCPA received a copy of the bulletin for distribution prior to the mailing date of March 1. The bulletin, including the list of affected providers, is available from this link. Please contact Betty Simmonds with questions.

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