Exhibit 12 - Accounts Payable - Protocol for Estimating Claims - Form CMS-

400.12 - Exhibit 12 - Accounts Payable - Protocol for Estimating Claims - Form CMS- H750A/B, Statement of Financial Position - (Rev. 5, 08-30-02) A1-1960.12, B1-4960.12 Accounts Payable Protocol for Estimating Claims Form CMS-H750A/B, Statement of Financial Position The amounts recorded in accounts payable (A/P) may be estimated based on actual volumes and historical rates; therefore, the FI or carrier calculates and accrues a new estimated liability each reporting period and reverses the accrual for the previous period in full. It charges the expense accounts, rather than the A/P, as actual payments are made. INTERMEDIARY PROCEDURES Methodology for Calculating Average Reimbursement Amount and Average Interest for Pricing Claim Liabilities To assign an estimated value to claims for which the amount to be paid is unknown, the contractor counts claims and multiplies the total by the average reimbursement amount (net of interest) and an average interest amount (CPT), if applicable, determined as follows: The intermediary calculates the average reimbursement amount by taking a representative sample of the most recent 12 months of paid claims history. It totals the reimbursement amount minus interest and divides by the total number of claims processed. It calculates the Claims Payment Timelines (CPT) by adding the interest from the same claims and divides by the total number of claims (not just those bearing interest). The intermediary performs these calculations by bill types and will be segregated between Part A and Part B. (See Intermediary Manual, Part 3, §3894.3.) GENERAL PROCEDURES These methods may be used to assign an estimated value to claims in the following categories: 1. In-house, unprocessed claims; and MR/UR PRO 2. Claims suspended for prepayment review Claims MR/UR PRO