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Operating Rules FAQs

Can a health plan require a provider to use the health plan’s own proprietary Claims Adjustment Reason Code (CARC) and Remittance Advice Remark Code (RARC) combinations?

What is the applicability of CORE “safe harbor"?

Can providers require both paper and electronic remittance advice (ERA) from a health plan?

If a health plan cannot be certain whether an individual will be covered for a particular claim or what the patient financials will be – because, for instance, the health plan is a secondary payer and waits for adjudication by the primary payer before this information is known– is the health plan required to comply with the CORE Rule 260 Eligibility and Benefits Data Content (270/271) Rule?

Do the CAQH CORE Phase I and Phase II Operating Rules for the Eligibility for a Health Plan and Health Care Claim Status transactions apply to direct data entry (DDE) transactions?

Is CORE certification required for covered entities to be compliant with the CORE operating rules for eligibility and claims status?

Who is required to comply with the adopted operating rules for claims status and eligibility under the Affordable Care Act?

If a health plan's product is not designed to require co-pays, deductibles, and/or co-insurance, is the health plan required to comply with the CORE Rule 260 Eligibility and Benefits Data Content (270/271) Rule; i.e. the requirement to return base financial responsibility related to the deductible, co-pay and co-insurance in response to an electronic eligibility query?

What is the relationship between an operating rule and a standard?

Where can I get answers to technical questions and help with implementing the ASC X12 5010 TR3 Reports, NCPDP D.0 and 3.0 and the CORE Operating Rules?


Q: Can a health plan require a provider to use the health plan’s own proprietary Claims Adjustment Reason Code (CARC) and Remittance Advice Remark Code (RARC) combinations?

A: No. A health plan cannot require a provider to use the health plan’s proprietary Claims Adjustment Reason Code (CARC) and Remittance Advice Remark Code (RARC) combinations. All covered entities must comply with the adopted Phase III operating rule requirements, which include specific CARC and RARC combinations to be used in EFT or ERA transactions. Payers are allowed to use (proprietary) combinations of CARCs and RARCs that are not in the CORE Operating rule as long as those combinations do not conflict with or fall within the 4 business scenarios and the combinations allowable under those scenarios. Suggested changes and/or additional combinations for regular CARCs and RARCs outside of the CORE Rules may be submitted using the Washington Publishing Company's (WPC) change request form. These CARC and RARC lists are updated 3 times a year at WPC. However, any change requests for new CARC/RARC combinations allowable under the CORE Rules should be submitted to CAQH-CORE via the yearly Market-Based Adjustment process. These change requests should not be submitted to WPC.

Q: What is the applicability of CORE “safe harbor"?

 A: The Phase I CORE 153 Connectivity Rule, Version 1.0.0 provides business rules and guidelines for what CORE refers to as a “Safe Harbor” for connectivity that application vendors, providers, and health plans (or other information sources) can be assured would be supported by any HIPAA covered trading partner. The “Safe Harbor” connectivity is HTTP/S. The Phase II Connectivity Rule extends the “Safe Harbor” reference by further specifying the connectivity message envelope standards. While it is expected that all health plans and health care clearinghouses would be able to implement the Safe Harbor connectivity if requested by trading partners, the rule is not intended to require trading partners to remove existing connections that do not match the rule, nor is it intended to require that all covered entities use this method for all new connections

Q: Can providers require both paper and electronic remittance advice (ERA) from a health plan?

A: Yes, according to the CAQH CORE EFT & ERA Operating Rule Set, providers can request both paper and electronic remittance advice (ERA) from a health plan during the provider’s initial implementation testing of the v5010 X12 835. Per the CAQH CORE operating rules, specifically the Phase III CORE 350 Health Care Claim Payment/Advice (835) Infrastructure Rule, a health plan is required to offer dual delivery for up to three payment cycles or 31 days, whichever is longer. Upon mutual agreement between the provider and the health pan, the timeframe for delivery of the proprietary paper claim remittance advices may be extended by an agreed-to timeframe.

Q: If a health plan cannot be certain whether an individual will be covered for a particular claim or what the patient financials will be – because, for instance, the health plan is a secondary payer and waits for adjudication by the primary payer before this information is known– is the health plan required to comply with the CORE Rule 260 Eligibility and Benefits Data Content (270/271) Rule?

A: Health plans must comply with the adopted operating rules and standards for the eligibility for a health plan transaction. The operating rules assume there is uncertainty with regard to individual coverage for a particular claim and patient financials because they recognize that a response to an eligibility inquiry is not final. An eligibility response from a health plan does not guarantee that the health plan will reimburse the provider for health services when a claim is submitted. For more information on how to implement or comply with any given operating rule in a specific circumstance and for technical questions, see the web site for CAQH CORE, the operating rules authoring entity: http://www.caqh.org/COREv5010.php

For more information on how to comply with any given ASC X12 standard in a specific circumstance and for technical questions, see the ASC (Accredited Standards Committee) X12 web site: http://www.caqh.org/COREv5010.php

For more information on the Electronic Funds Transfers (EFT) standard, see the NACHA: The Electronic Payments Association web site: https://healthcare.nacha.org/

For technical questions about the pharmacy transactions and standards, subject matter experts may be reached through the National Council for Prescription Drug Programs (NCPDP): http://www.ncpdp.org/

Q: Do the CAQH CORE Phase I and Phase II Operating Rules for the Eligibility for a Health Plan and Health Care Claim Status transactions apply to direct data entry (DDE) transactions?

A: No, the CAQH CORE Phase I and Phase II operating rules for the Eligibility for a Health Plan and a Health Care Claim Status transactions would not apply to DDE transactions. For more information on the CAQH CORE Phase I and Phase II operating rules, please go to http://www.caqh.org/COREv5010.php

Q: Is CORE certification required for covered entities to be compliant with the CORE operating rules for eligibility and claims status?

A: No. We do not require compliance with any aspect of CORE certification. CORE currently administers a voluntary certification process for a fee. In support of that certification process, the CORE operating rules include many references to, requirements for, and policies about certification. We recognized the existence of those references, requirements, and policies and explicitly declined to adopt them in the interim final rule, “Administrative Simplification: Adoption of Operating Rules for Eligibility for a Health Plan and Health Care Claim Status Transactions,” published in the Federal Register on July 8, 2011. We stated in that rule, “We are not requiring covered entities to obtain CAQH CORE certification or to adhere to the CAQH certification policies for Phase I and Phase II operating rules. The CORE Phase I and II operating rules now apply to all HIPAA-covered entities. For example, Phase I CORE 153: Eligibility and Benefits Connectivity Rule states: “CORE-certified entities must be able to implement HTTP/S Version 1.1 over the public Internet as a transport method for the ASC X12 005010X279A1 Eligibility Benefit Request and Response (270/271)... transactions.” As per the interim final rule that adopts operating rules for the eligibility for a health plan and health care claim status transactions, all covered entities that are considered an information source for the eligibility for a health plan transaction must now be able to implement HTTP/S Version 1.1 over the public Internet. In another example, Phase I CORE 152: Eligibility and Benefit Real Time Companion Guide Rule states: “Conformance with this rule must be demonstrated through successful completion of the approved CORE test suite for this rule with a CORE-authorized testing vendor.” While covered entities must conform to the operating rules, the demonstration of conformance through a CORE test suite is voluntary, as it is a prerequisite for CORE certification and, therefore, a CAQH certification policy. We are not requiring covered entities to adhere to the CAQH certification policies.

Q: Who is required to comply with the adopted operating rules for claims status and eligibility under the Affordable Care Act?

 A: All covered entities as defined by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are required to comply with the operating rules for claims status and eligibility. Covered entities include all health plans, health care clearinghouses, and health care providers who transmit health information in electronic form in connection with a transaction for which the Secretary has adopted a standard.

Q: If a health plan's product is not designed to require co-pays, deductibles, and/or co-insurance, is the health plan required to comply with the CORE Rule 260 Eligibility and Benefits Data Content (270/271) Rule; i.e. the requirement to return base financial responsibility related to the deductible, co-pay and co-insurance in response to an electronic eligibility query?

A: Health plans must comply with the adopted operating rules and standards for the eligibility for a health plan transaction. However, if a health plan’s product is not designed to require co-pays, deductibles, and/or coinsurance, the operating rules allow a health plan to report patient financials as “0.” For more information on how to implement or comply with any given operating rule in a specific circumstance and for technical questions, see the web site for CAQH CORE, the operating rules authoring entity: http://www.caqh.org/COREv5010.php

For more information on how to comply with any given ASC X12 standard in a specific circumstance and for technical questions, see the ASC (Accredited Standards Committee) X12 web site: http://www.caqh.org/COREv5010.php

For more information on the Electronic Funds Transfers (EFT) standard, see the NACHA: The Electronic Payments Association web site: https://healthcare.nacha.org/

For technical questions about the pharmacy transactions and standards, subject matter experts may be reached through the National Council for Prescription Drug Programs (NCPDP): http://www.ncpdp.org/.

Q: What is the relationship between an operating rule and a standard?

A: Operating rules support the adopted standards for health care transactions by fostering and enhancing uniform use of the standards across the health care industry. The Affordable Care Act defines operating rules as “the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications [adopted under HIPAA].” The statutory definition was codified at section 45 CFR 162.103 in the interim final rule titled “Administrative Simplification: Adoption of Operating Rules for Eligibility for a Health Plan and Health Care Claim Status Transactions” on July 8, 2011. Operating rules are business rules and guidelines that are not already defined by the standards, which means they do not duplicate what is in the standard. Nor are operating rules inconsistent or in conflict with the standard. Operating rules typically go above and beyond the standard with regard to a number of aspects, including data content. Thus, it is possible for covered entities to implement both the operating rules and the standards in every case. Here is an example of how operating rules and standards work together where the operating rule calls for requirements above and beyond the standard: For the eligibility for a health plan transaction, the adopted standard (ASC X12 TR3 270/271) states that “an information source is not required to generate an explicit response to an explicit [eligibility] request if their system is not capable of handling such requests.” The operating rule for the same transaction requires a health plan or information source to support an explicit request for specific service types by returning an explicit response, according to the business rules and guidelines in Operating Rule Phase II Core 260.

Q: Where can I get answers to technical questions and help with implementing the ASC X12 5010 TR3 Reports, NCPDP D.0 and 3.0 and the CORE Operating Rules?

A: For technical questions about the ASC X12 transactions and standards, the Accredited Standards Committee (ASC) X12 provides support through its work group and committee members. The names of those subject matter experts can be found on the X12 website at www.x12.org. The site also offers clarifications for certain common issues: For technical questions about the pharmacy transactions and standards, subject matter experts may be reached through the National Council for Prescription Drug Programs (NCPDP): http://www.ncpdp.org/. For technical questions about the operating rules, staff members at the Committee on Operating Rules for Information Exchange (CORE) can be contacted at: http://www.caqh.org/CORE_overview.php.