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Hospitals face Medicaid denials under new ORP rule
By Jeffrey Herman on October 31, 2019 at 11:10 AM

Image of medical professionalAs of Nov. 1, 2019, hospitals — as well as other types of health care providers — submitting claims to Missouri or Illinois Medicaid programs will be subject to a new restrictive rule concerning ordering, referring and prescribing providers (ORP). The ORP rule may result in hospitals unexpectedly having some Medicaid claims denied. Below is a description of the rule, some differences between Missouri and Illinois, where the rule comes from, and what claims it applies to.

Under the ORP rule (called the “OPR” rule in Missouri), hospital claims will be denied if any providers listed on the claim form are not enrolled in that state’s Medicaid program (also known as “non-participating” providers). Put differently, every provider listed on a hospital claim form must be enrolled in Medicaid. If not, the claim will be denied. That goes for attending providers, referring providers, prescribing providers, operating providers and other providers performing services for which the hospital files a claim, whether for a facility fee or otherwise.

Missouri includes an express exception to the ORP rule for “out-of-state emergency services,” pursuant to 13 CSR § 65-2.020(1)(B). This makes sense. A Medicaid beneficiary cannot be expected to shop around for services in an emergency situation when visiting another state. Even if he or she could, it would be difficult to try to ensure that all physicians who might be involved are enrolled in the Missouri Medicaid program.

In contrast, there is (as of yet) no exception to the ORP rule in Illinois, not even for out-of-state emergency services, which may result in some harsh claim denials. Fortunately, patients and hospitals may at least try to find out if a particular provider participates in Medicaid by checking the Illinois Medicaid Provider Directory.

Missouri physicians may also use a special, simpler enrollment process so their involvement in a patient’s care won’t result in Medicaid claim denials. This enrollment is limited, however, as these providers may not bill Medicaid directly for their services. In Illinois, there is no streamlined enrollment process. A physician who wants to order or refer services for Medicaid patients must go through the regular provider enrollment process, which some providers may find arduous.

The ORP rule comes from Section 6401(b) of the Patient Protection and Affordable Care Act. That legislation added 42 U.S.C. § 1396a(kk)(7), which requires “all ordering or referring physicians or other professionals to be enrolled under the State plan or under a waiver of the plan as a participating provider.” There is also a federal regulation located at 42 CFR § 455.410(b). Each provider’s National Provider Identifier (NPI) must also be listed on the claim form.

States have been implementing the ORP rule at different times. The ORP rule originally was set to go into effect in Illinois on Jan. 1, 2019, but the effective date was delayed and then delayed again until Nov. 1, 2019. It will apply not only to hospital claims, but to all other claims that require ordering or referring providers, including claims for physicians, nurse practitioners, durable medical equipment, home health and imaging.

In Missouri, the ORP rule has been applied since Nov. 1, 2017, to claims for durable medical equipment, home health, independent laboratories and radiology. Beginning on Oct. 24, 2018, drug claims became subject to denial for violating the ORP rule, while other types of claims received only warning messages instead of denials. On Nov. 1, 2019, however, violation of the ORP rule will result in denied claims for hospitals, mental health hospitals, state institution long-term care facilities, nursing homes, private home-ICF/IDs, home health agencies, rural health clinics and hospice claims.

In both states, a denied claim could potentially be approved if all non-participating providers become timely enrolled in Medicaid and the claim is resubmitted. But that may be more hassle than it’s worth, depending on the circumstances.

If you have questions about the ORP rule, please ask one of the attorneys in our Health Care industry group.

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