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Business Model and Compliance Q&A

  1. Industry and Company Overview
  2. Claims Processing and Payment
  3. Regulatory Issues
  4. Provider Relations
  5. Information Security

1. Industry and Company Overview

What is fueling the growth in ancillary services?
The major drivers for increased use of ancillary services are:
  • An aging population
  • Rising healthcare costs are forcing payors to seek alternatives to costly in-patient care
  • New technologies which, in some cases, are making ancillary services a viable option to in-patient care
  • Ancillary service spending accounts for 20.6% of the total healthcare dollars spent in 2008. That’s more than pharmacy and dental spending combined!


What are ancillary services?
Ancillary services represent one of the fastest growing components of healthcare costs. The ACS benefits management system contracts with providers in 31 specialty categories:


Who is Ancillary Care Services?
Ancillary Care Services is a wholly owned subsidiary of American CareSource Holdings (NASDAQ symbol ANCI), the first national, publicly traded ancillary care network services company, offers a comprehensive national network of over 4,900 ancillary service providers at more than 36,000 sites. Ancillary Care Services offers the regional payer community access to a broad network of ancillary providers, along with a value-added suite of services that results in quantifiable medical and operational cost savings to payors. By assuming responsibility for the most complex and costly interactions between payors and providers (contracting, credentialing, collections, resolution management, and payments) ACS is able to leverage our economies-of-scale and technological superiority to drive down medical and operational costs. Only ACS is able to immediately enhance the breadth (footprint) and depth (specialties) of our clients’ ancillary services by tailoring the network to optimize your fee schedule. These results are achieved without charging access fees or requiring any investment. All this is done without any member disruption, because we augment rather than replace your providers.

What value does ACS add to its clients?
ACS brings significant, tangible value to each of our client relationships. Some of these values include:
  • ACS’s ability to improve ancillary medical cost savings by an additional 8-15% over our clients’ current provider discounts.
  • ACS’ relationship with its providers help you lower the costs of ancillary care for your clients and members.
  • The reduced cost of ancillary care helps extend the benefits offered to your members.
  • ACS clients do not pay any additional access or PEPM fees.
  • Working with ACS immediately augments and expands your current network without an increase in costs for network overhead and administration.
  • ACS targets our client’s high volume providers for continued provider development.
  • ACS helps reduce ancillary claims loss ratio for the payor community.
  • ACS becomes the single point of contact for provider appeal management.

Who are ACS’ clients?
ACS has direct relationships with national, regional, and local PPO’s, TPA’s, unions, self-insured/self-administered employer groups and insurance companies.

How robust is the ACS provider network?
ACS's national provider community has over 4,900 provider sites with more than 36,000 provider locations and the network is growing by 25% per year.

How can I find a provider?
ACS provides extensive search capabilities on our website at www.anci-care.com.

On the home page in the upper right-hand corner of the ACS website click on the Provider Search icon. This will take you to the Ancillary Care Services Provider Search page.


You can search by Provider/Facility Name, Primary Specialty, City/State, or Zip Code as well as specify the radius of the search.

What type of customer service do you provide?
ACS is proud to announce the recent expansion of our Anci-Care Service Center, providing you with the best support. Our highly-trained, HIPAA-compliant Service Center Advocates are ready to help with all of your claims related questions, such as:
  • Claim/payment status
  • Provider payment questions
  • EOP clarification
  • Network affiliation information
  • Electronic remittance
  • Refund requests
  • Repricing validation
  • In-network provider status
  • Documentation Requests

To reach our Anci-Care Service Center:
  • Call 800-370-5994, select option 4, then select option 3,
  • Fax your inquiry at 972-980-2406, Attention: Service Center, or
  • Email your inquiry to customerservice@anci-care.com.

2. Claims Processing and Payment

How does the process actually work?
A customized claims flow process is established during implementation. Our clients forward claims to ACS for repricing via EDI or paper. ACS re-prices the claims then issues a repricing sheet or outbound EDI transmission to the client that shows billed charges, ACS re-pricing and client savings. The client then remits payment to ACS, and ACS remits payments and EOPs to the provider.


Does paying ACS satisfy my timely payment obligation?
The contract between ACS and the provider assigns rights of collection to ACS. Therefore, when the client issues payment to ACS, the client has satisfied their provider payment obligation and can use that transaction to document timely payment or other claim turnaround service requirements. Once payment is made to ACS, it is ACS’s contractual obligation to reimburse the provider the contracted rate for the services rendered.

What is ACS’ collection process?
Two weeks after a claim has been repriced by ACS, we contact the client to verify their receipt of the claim, confirm that all required documentation has been supplied, and answer any questions about payment to ACS. If a client receives a claim directly from the provider, that claim should be routed through the standard claim repricing process.

How does ACS handle appeals?
ACS acts as a provider advocate and will work with the client to resolve any issues ranging from general questions to an appeal. In addition to responding to appeal requests from the provider or member, ACS has many processes in place to identify underpaid claims and will initiate appeals on behalf of the providers where appropriate. If a duplicate payment is received by ACS, the payment is automatically sent back. If a refund is formally requested due to overpayment of a claim, ACS will review the details and refund the appropriate amount.

When a pay-to change is made, will I still be able to track the rendering provider?
After ACS reprices a claim, we transmit two pieces of information back to the client. We provide the repriced HCFA or UB form, showing ACS as the billing provider, along with ACS’s Tax ID #. We also provide a repricing form, summarizing the changes. ACS does not change the rendering provider information, as this is used by the client to track and keep records of the rendering provider.

Who bills the member for deductibles and co-pays?
The client sends ACS an explanation of benefits (EOB) with their payment, indicating patient responsibility (deductibles, co-pays, co-insurance, etc). The client also sends the member an EOB showing the patient responsibility detail and payment to ACS for that provider’s service. ACS then mirrors the client EOB, and sends the provider an ACS EOP along with the ACS contracted payment minus the patient responsibility. The provider is responsible for billing the member for the patient responsibility. ACS’s contract language prohibits providers from billing above the stated patient responsibility. Balance billing is prohibited.

Can members be educated about this process?
As part of the client relationship with ACS, we work with you to develop and distribute educational material through the Member Education and Guidance (MEG) program. Through the MEG program, we help clients inform the member about ACS and the services we provide. If a member has a more specific question about their claim, please refer the individual to the Anci-Care Service Center:
  • Call 800-370-5994, select option 4, then select option 3,
  • Fax your inquiry at 972-980-2406, Attention: Service Center, or
  • Email your inquiry to customerservice@anci-care.com.

3. Regulatory Issues

Why does ACS get paid directly instead of the rendering physician?
One of the value added services we offer our providers is collections. Our contract assigns ACS the obligation to pursue collection activities on the participating providers’ behalf. ACS is in a unique position to provide customer service support for our providers. We are in daily contact with the approximately 600 payors that do business with ACS. We pay our providers promptly with a single check that represents their payments from a multitude of ACS clients and their patient transactions. We simplify their business by becoming one point of contact to follow up and resolve claim issues on their behalf.

As part of our responsibility managing the complex interactions between clients and providers, ACS is contractually obligated to pay the provider once the claim has been adjudicated by the client and paid to ACS. ACS pays the providers within 5-7 days of our receipt of payment. We fully support and administer prompt payment regulations.

Below is the actual language from our provider contract:
  • Appointment of ACS as Representative for Provider

    • Provider hereby authorizes ACS to act as specifically set forth herein and to have full authority to act on behalf of and bind Provider with respect to the following:

      • To receive payments from payors resulting from Covered Services for Covered Persons, and to cause and effectuate payment to Provider in accordance with the Negotiated Rates and the terms of this Provider Agreement.

    • Provider agrees not to deliver Covered Services to Covered Persons except and only pursuant to the terms and conditions of this Provider Agreement with ACS, regardless of whether or not Provider has pre-existing independent contractual provider agreements with any health care plans, networks or health care organizations. This Provider Agreement shall supersede all other contractual arrangements of Provider when Provider delivers Covered Services to Covered Persons.

In addition, we have the ability to pay our providers electronically, with downloadable EOPs that facilitate the management of their practices through the reconciliation of their payments. Just as important, we become one point of contact for you. We will work with you and our providers to assist in the resolution of claims. This includes providing supporting documentation and additional information you may need to successfully resolve a claim.

Is the ACS business model HIPAA compliant?
HIPAA compliance is essential to the success of the ACS business model. To assure compliance, ACS sought legal advice to address this question. In the following legal opinion, written by Jan R. Newsom with Locke, Liddell & Sapp LLP, ACS and its business model are deemed fully HIPAA compliant:
  • HIPAA has identified ten standard transactions for EDI for the transmission of health care data. Claims and encounter information, payment and remittance advice, and claims status and inquiry are several of the standard transactions. Code sets are the codes used to identify specific diagnosis and clinical procedures on claims and encounter forms. The CPT-4 and ICD-9 codes that you are familiar with are examples of code sets for procedure and diagnosis coding. Other code sets adopted under the Administrative Simplification provisions of HIPAA include code sets used for claims involving medical supplies, dental services, and drugs.

  • There is no prohibition regarding changing the information contained in a data element, which is what I assume would be occurring in changing the ultimate payee on a benefit remittance. The data elements under each standard are essentially like boxes in which information (data) is placed. The placement and name of the “boxes” must remain uniform, but the data inside can change at will. Changing the payee of a benefit calculation by revising the content in a data element does not appear to be a violation of HIPAA restrictions, regardless of who actually provides the information.

In addition, ACS, as a publicly traded company, adheres to all SEC reporting regulations and conducts annual financial audits by independent accountants.

If the client receives a claim directly from a provider within the ACS network, does paying ACS relieve that client of their obligation to pay the provider directly for covered benefits and services rendered?
Yes! The provider assigns ACS the rights for billing and collection, on their behalf. By paying ACS, the client is fulfilling their obligation of paying the provider for covered benefits.

How are 1099 filings handled?
Each client submits one 1099 filing to ACS for all provider claims paid to ACS. ACS, in turn, sends each of our providers a 1099 according to the payments that we have made to their Tax ID.

4. Provider Relations

How does ACS expand their current provider network?
ACS identifies highly utilized providers that are not currently contracted by ACS during the NVA process. These providers are considered high priority targets for the ACS Provider Development team. The Provider Development team consists of both in-house contract specialists and external contract consultants. The objective of the team is to expand the ACS network to maximize the client’s utilization in-network and reduce the frequency of out-of-network provider utilization.

Does ACS have binding contracts with each of these providers?
Yes. All providers within our network have an in-force agreement with ACS that gives ACS specific authority to bill and collect all provider claims for ACS clients. Client access to the provider network is based upon the effective date of the contract with the provider.

What steps does ACS take to notify providers which companies ACS works with?
The education of the participating providers begins during the contracting process. The ACS business model is explained, the participating clients are revealed, and the work flow is described. Once a provider has been contracted and approved by the credentialing committee, their fully executed contract and an ACS in-service training manual is sent to the provider. Additional follow up with the provider occurs when ACS signs a contract with a new client. ACS distributes a formal notification to all of our providers 10 days in advance of a new client implementation.

How do our members know what providers are contracted with ACS?
ACS can provide a complete list of participating providers to the client, or you can search for providers in your area by accessing our provider search engine on our website at
Ancillary Care Services Provider Search
.

How can a provider be nominated?
All provider nominations, regardless of the source, should be submitted to ACS Provider Relations. The nomination request should include at least the provider name, provider address, and provider phone number. A nomination request form can be provided upon request. Additionally, clients and members will have the capability of submitting nomination requests via the ACS website.

Are we required to include all of your providers in our network?
No, providers can be included or excluded for a number of reasons. During the Network Value Analysis (NVA) process, ACS evaluates network, both access and savings, against the clients current network experience. This analysis allows ACS to make recommendations to the client regarding the ACS network configuration that would maximize the client’s access to the ACS network.

Where do providers call for questions about payments?
For claim detail, please refer providers to the Anci-Care Service Center:
  • Call 800-370-5994, select option 4, then select option 3,
  • Fax your inquiry at 972-980-2406, Attention: Service Center, or
  • Email your inquiry to customerservice@anci-care.com.

5. Information Security

ACS’s repricing process includes duplicate claim identification and other edits to validate all claim submissions. If there are specific issues that arise from the claims flow or a client’s adjudication software limitations, these can be addressed by our implementation team.

How do I get connected to ACS?
ACS has a standardized on-boarding process which can quickly and effectively get you connected to ACS. We can support a large variety of claim formats and transmission protocols.

What kind of HIPAA-compliant data security measures are in place?
ACS takes client data security very seriously. All data is stored in access controlled data bases which are housed in our secure data center. Our networks are secured by a variety of firewalls and intrusion detection devices. All devices are monitored on an ongoing basis.

Does ACS use encryption when transmitting data?
Yes, all data transmitted in or out of ACS is encrypted using 1024-bit PGP encryption.

Can I receive electronic payments from ACS?
Yes, we have a web site – www.anci-connect.com – which provides the ability to enroll and receive electronic payments and 835 Remittance Advices.

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