Terms and Conditions (TAC)

The TAC is the portion of the contract profile that contains the definitions and formulas used to calculate expected reimbursement. These items are entered using common contract terms, system terminology, and mathematical expressions, all of which are covered in training.

When a claim is calculated, the system references each TAC section in the order in which it is listed to locate a matching service type and/or reimbursement term. Assuming there are matching service types, the system then looks at the TAC section of the contract profile to determine the reimbursement rates for the services.

The following list summarizes how the system uses each section of the TAC to calculate expected reimbursement rates. The section names are numbered to show the order in which the system looks for a matching service type.

During repricing, if the system finds a service type on the claim that matches one in this section, it:

• Exclusions – Subtracts the expected amount for the service type from billed charges.
• Pass-Through – Adds the expected amount for the service type to the amounts in the Reimbursement section.
• Reimbursement – Pays the rate calculation calculated by the specified reimbursement method.
• Stop Loss/Cap – Overrides all calculations from previous sections with the expected amount for the service type.

Exclusions

The Exclusions section contains services and products that are excluded from percentage reimbursement. During recalculation, the system finds a matching service type in this section and subtracts the expected amount from billed charges to produce billed charges adjusted. Therefore, billed charges adjusted is equal to billed charges minus the expected amount of any service loaded in the Exclusions section.

Pass-Through

The Pass-Through section typically contains services and products for which cost is passed through to the payor (e.g., specialty items such as implants and high-cost drugs). Calculations from this section are added to those in the Reimbursement section.

Reimbursement

The Reimbursement section contains services and products for which the negotiated rates are calculated. The majority of a contract’s definitions and formulas are contained in the this section. During recalculation, if the system finds a matching service type in this section, it pays the rate calculation.

Stop Loss/Cap

This section contains definitions of stop loss and stop cap clauses. These are the terms that provide for the protection of the provider or payor from high dollar claims. If “lesser-of” or similar clauses are present in the contract, they are entered in this section. The calculations in this section override all calculations from other sections when a stop loss/cap clause is applicable in a contract.