Professional Stop Loss

Provider Type

  • Participating Physician Groups (PPG)

The following applies to participating physician groups (PPGs) participating in the Health Net professional stop loss program. Unless otherwise specified in the PPG's Health Net Provider Participation Agreement (PPA), the terms of the program are described below.

Professional stop loss limits the PPG's liability for providing capitation services rendered by participating providers to Health Net members. The PPG's liability for capitation services provided to a Health Net member in a calendar year for a standard contract is limited to the amount specified in the PPA. PPGs must select a professional stop loss level that is acceptable to Health Net and inform Health Net of its selection 60 calendar days prior to the beginning of the calendar year the stop loss level becomes effective. The cost of professional stop loss is deducted from the PPG's monthly capitation; however, if permitted under the PPG's PPA, the PPG may elect to purchase stop loss from a third party. If a PPG elects to purchase stop loss from a third party, it must provide Health Net with proof of stop loss acceptable to Health Net in accordance with the PPA. Self-insurance or stated reserves for Incurred But Not Reported (IBNR) is not stop loss.

When the PPG has made payments exceeding the applicable professional stop loss level and has purchased professional stop loss from Health Net, the PPG must complete and submit a Health Net PPG Professional Claim form (PDF) to Health Net.

Payment Request Submission Requirements

The allowable payment for claims of treating providers under the stop loss program is based on terms set forth in the PPA. If, after Health Net's calculation, the PPG finds that its costs for capitated services provided to a member have exceeded the stop loss threshold, the PPG may make a request for payment under the stop loss program.

Professional stop loss is calculated and paid on a calendar year basis. The PPG notifies the Health Net Reinsurance Unit about eligible professional stop loss cases by supplying the member's name and subscriber identification number.

Treating providers' professional claims submitted through the automated encounter submission process qualify for inclusion in the professional stop loss program, subject to the following exceptions:

The PPG must submit hard copy claims (CMS-1500 or UB-04) of treating providers for multiple surgical procedures, unlisted procedures or unclassified medications, anesthesia time units for anesthesia charges, and any other procedures that are required for further clarification. The PPG should provide its proof of payment (such as Explanation of Benefits (EOB) or Explanation of Payment (EOP)) to treating providers. In order to receive timely payments, the PPG must submit requests for payment and encounter data to Health Net within the timely filing limit set forth in the PPG's PPA.

Requests for payment of the PPG's costs are not processed if the treating provider's claims are incomplete or inaccurate. To receive credit for treating providers' claims, the PPG must resubmit them to Health Net with complete and accurate information. Final adjudication reports, if required, are forwarded to the PPG.

Professional stop loss requests for payment for the current year must be submitted by the PPG on or before April 30 of the following year or within the timely filing limit set forth in the PPA.

Requests for Payment Processing

Health Net excludes all non-covered items from a treating provider's claim prior to processing a PPG's request for payment under the professional stop loss program. The following are not reimbursable through professional stop loss:

  • Services eligible for payment or paid through insured services, shared-risk or eligibility guarantee.
  • Services during a period in which the member's contract is not in effect.
  • Services not covered as a benefit through the plan in which the member is enrolled.
  • Services provided in connection with workers' compensation.
  • Services for which benefits are reimbursable through coordination of benefits (COB) and third-party liability.
  • Copayments required to be paid by Health Net members.

Health Net bases final payment under the professional stop loss program on the calculation of expenses incurred in reaching the professional stop loss level in accordance with terms of the PPG's PPA.

Any amounts exceeding the PPG's attachment point are reimbursed at a negotiated rate specified in the PPA.

The first step in processing the treating provider's claim is calculating the total allowable amount for the claim excluding non-covered items. If the allowable amount does not exceed the PPG's attachment point, the PPG's request for payment pertaining to that treating provider's claim is denied. If the total allowable amount for the treating provider's claim exceeds the PPG's attachment point, a negotiated percentage of the amount exceeding the attachment point is credited to the PPG. Health Net is not under any obligation to pay the PPG for any request for payment not submitted within 120 days of the treating provider's rendition of contract services.

Each PPG must maintain records of services provided by a treating provider in order to determine when the level of liability for covered capitation services has been reached under the stop loss program. The PPG calculates the allowable amounts for professional stop loss monthly, based on the payment schedule set forth in the PPA.

PPGs must maintain the following records for at least one year:

  • Services provided by the treating provider, including medical records and accounting records showing copayments paid, for any third-party liability or coordination of benefits (COB) payments.
  • Billing from referring physicians or agencies showing the direct cost of the services.
  • Treating provider's surgical reports for multiple surgical procedures (modifier -51) and unusual surgical procedures (modifier -22), as well as any surgical procedures with no unit values (BR, SV and RNE).
  • Anesthesia time from surgical reports.