MedicaidDocumentationHigh impact
[Indiana] Prepay Auditing Update
CareSource·IN · Psychiatry, Physical Therapy, Speech Therapy +5 more·Provider Bulletin
Effective date
Mar 23, 2026
We identified it
May 9, 2026
Summary
CareSource Indiana is implementing enhanced prepay claims auditing effective March 23, 2026, requiring medical record submission to support coding accuracy for Marketplace and Medicaid claims. Certified coders will review claims flagged with reason code BB1 against CMS, AMA, and AHA coding guidelines; providers must submit supporting documentation within 365 days or claims remain denied. This is an administrative audit focused on coding validation, not medical necessity.
Action Required
By March 23, 2026: (1) Billing and clinical teams must ensure all medical records contain the required documentation elements per the policy table (treatment plans, signed orders/CMN, consent forms, progress notes, diagnostic reports, operative reports where applicable, and proof of delivery for DME). (2) Establish a process to monitor CareSource EOPs for reason code BB1 flags and route flagged claims to designated staff for documentation gathering. (3) Create a submission workflow to upload requested medical records to the CareSource Provider Portal within 30 days of receipt of BB1 notification to maximize approval likelihood. (4) Train providers and clinical staff on proper documentation standards for levels of service, medical decision making, modifier usage, and service unit billing per NCCI, CPT, and HCPCS guidelines. (5) Update EMR/billing system templates to include all required documentation fields specific to each service type (behavioral health, skilled therapy, DME, lab/imaging, medical services). (6) Document all medical record submission dates and tracking to manage the 365-day deadline for claim denial reversal. Failure to submit records will result in permanent claim denial after 365 days; submission does not guarantee payment if documentation does not support the billed codes.