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MES Certification Repository

Claims Processing

How this system supports the Medicaid Program

Claims processing systems cover the ingestion and validation of claims against rules. These systems may also generate reports to support Federal reporting requirements.


CMS-Required Outcomes

Each CMS-Required outcome is based on statutory or regulatory requirements. CMS-Required Outcomes and Metrics are used to demonstrate that a system is compliant with the applicable federal regulations which pertain to that specific system or module. CMS-Required outcomes form the baseline for system/module functionality, which must continue to receive enhanced federal funding for operations.

Reference # CMS Required Outcomes Default Metrics Regulatory Sources
CP1 Receipt and Ingestion The system receives, ingests, and retains claims, claims adjustments, and supporting documentation submitted both electronically and by paper in standard formats. - Count/percentage of claims received by submission channel (paper vs. electronic).
- Median processing time for ingestion of non-electronic claims/documentation (from receipt to correct ingestion of/association with the associated claims record).
45 CFR 162.1102
CP2 Validation The system performs comprehensive validation of claims and claims adjustments, including validity of services. - Count/percentage of claims/claims adjustments accepted/suspended/rejected for processing. 42 CFR 431.052
42 CFR 431.055
42 CFR 447.26
42 CFR 447.45(f)
45 CFR 162.1002
SMD Letter 10-017
SMM Part 11 Section 11300
CP3 Prior Authorization The system confirms authorization for services that require prior approval to manage costs or ensure patient safety, and that the services provided are consistent with the authorization. The system accepts use of the authorization by multiple sequential providers during the period as allowed by state rules. Prior-authorization records stored by the system are correctly associated with the relevant claim(s). - Count/percentage of claims/claims adjustments requiring prior-authorization accepted/suspended/rejected for processing based on prior authorization or lack thereof. SSA 1927(d)(5)
42 CFR 431.630
42 CFR 431.960
SMM Part 4
SMM Part 11 Section 11325
CP4 Calculation and Resolution The system correctly calculates payable amounts in accordance with the State Plan and logs accounts payable amounts for payment processing. The system accepts, adjusts, or denies claim line items and amounts and captures the applicable reason codes. - Count/percentage of transactions by reason code.
- Count/percentage of transactions re-priced post-payment by underpayment/ overpayment and, if applicable, reason code or other applicable categorization available to the State.
42 CFR 431.052
CP5 Provide Submission Status The state communicates claims status throughout the submission and payment processes and in response to inquiry. If there are correctable errors in a claims submission, the system suspends the claims, attaches pre-defined reason code(s) to suspended claims, and communicates those errors to the provider for correction. The system associates applicable error or reason code(s) for all statuses (e.g., rejected, suspended, denied, approved for payment, paid) and communicates those to the submitter. The system shows providers, case managers and members current submission status through one or more of the following:
- Automatic notices as appropriate based on claims decision or suspension.
- Explanation of Benefits (EOB).
- Providing prompt response to inquiries regarding the status of any claim through a variety of appropriate technologies, and tracking and monitoring responses to the inquiries.
- Application programming interface (API)
- Count/percentage of claims suspended for correction/corrected by reason code.
- Count/percentage of inquiries/responses/communications by submission/response channel.
45 CFR Part 162.1402(c)
45 CFR Part 162.1403 (a) & (b)
42 CFR 431.60 (a) & (b)
SMM Part 11 Section 11325
CP6 Record-Keeping The system tracks each claim throughout the adjudication process (including logging edits made to the claim) and retains transaction history to support claims processing, reporting, appeals, audits, and other uses. - Records must be retained for a minimum of 3 years for fiscal records, 5 years for records related to cost reports, 6 years for medical records of covered entities, and 10 years for managed care records (or greater if required under State laws) – periods are measured from the date of closure of all related actions for a given record.
- Pass/Fail that the state can demonstrate that 100% of records were retained for the appropriate number of years indicated above.
42 CFR 447.45
42 CFR 431.17
SMM Part 11 Section 11325

State-Specific Outcomes - CMS Approved

States requesting enhanced FFP for systems that fulfill state-specific program needs, beyond minimum legal requirements and the baseline of the CMS-required outcomes, should propose State-Specific Outcomes which address the proposed enhancements.

When drafting state-specific outcomes statements, keep these tips in mind.

Examples for Claims Processing

We are actively gathering and evaluating outcomes statements crafted by states for this business area.

Please send examples from your state that you’d like to share to MES@cms.hhs.gov. Our team will collect and share the best examples.

State Medicaid Program Goal Outcome Statement Metric(s)