Cost-to-Charge Adjustments on Clean Claim Reviews
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Defines how Arizona Complete Health conducts cost-to-charge discrepancy evaluations during clean claim reviews for facility billed charges and the procedures used to adjust billed amounts; applies to company employees and affiliated entities involved in payment integrity.
No material clinical or coverage changes in this revision.
Cost-to-Charge Adjustment Criteria
Cost-to-charge adjustment criteria
Procedures applied when clean claim reviews identify significant cost-to-charge discrepancies for facility billed implantable supplies and pharmaceuticals:
ALL of the following
- Compare billed implantable supply item amounts to median facility-paid amounts from the ECRI Institute database.
- Compare billed pharmaceutical amounts to AWP sources (reimbursementcodes.com, Medispan AWP, or ECRI Institute database).
- If a significant Cost-to-Charge Discrepancy is identified, adjust the billed charge to 8 times the median ECRI facility-paid amount for implantable supplies or 8 times the AWP price for pharmaceuticals.
- Allow providers to submit documentation (e.g., invoices) demonstrating they incurred higher actual costs; Company will review submitted documentation and respond appropriately.
ALL of the following
- Policy basis: Company follows federal guidance including CMS Provider Reimbursement Manual Section 2203 regarding uniform charge structures related to cost and the Company’s fiduciary obligation to review facility charges prior to payment.
Pricing Sources and Calculation
| ECRI Institute database | ECRI Institute's database of medical/surgical supplies and implants (hospital-populated facility-paid amounts) |
| reimbursementcodes.com AWP | AWP pricing provided by www.reimbursementcodes.com (Current AWP package pricing) |
| Medispan AWP | Medispan AWP (Current AWP package pricing) |
| ECRI Institute drug pricing | ECRI Institute's database (Current AWP package pricing, Medicare Part B ASP and hospital APC/OPPS drug pricing information) |
Documentation Requests and Payment Processing
Documentation requests and payment processing for disputed adjustments
If a provider disputes an adjusted allowed amount they may be asked to submit documentation (for example, invoices) showing actual costs; the Company will review submitted documentation and respond. Payment Integrity manages vendors and the internal Payment Integrity Review Unit (PIRU) who perform clean claim reviews, and Claims Operations processes payments based on the review findings.
- Providers may be asked to submit invoices or other cost documentation when disputing an adjusted billed amount.
- Submitted documentation will be reviewed by the Company and a response provided as appropriate.
- Payment Integrity manages vendor(s) and the internal PIRU who conduct clean claim reviews.
- Claims Operations processes member claim payments according to clean claim review findings.
Key Definitions
OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.