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Reduced and Denied Health Insurance Claims
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- Mega Life Settles With MA AG...
Posted on 10/27/2009
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General
- Health Insurers' Bad UCR Rate Data on Out-of Network Claims Subject to Liability
- Do You Have Holes In Your Reimbursement Bucket? The “Public Option” May Make Those Holes Bigger
- Illegitimate UCR Rate Reductions Apply to All Types of Out-of-Network Medical Providers
- Wrong Fee Schedules and Other Underpayments on Managed Care Contracts Can Cripple Your Practice
- Auto Insurance Companies and Worker’s Compensation Insurance Companies Continue to Be Sued Over Silent PPO Discounts on Medical Claims
Reduced and Denied Health Insurance Claims
UCR Rate Problems: Health Insurers Covering Up Their Mistakes
Now that it is widely alleged that the Ingenix UCR rate data invalidly reduced medical provider reimbursements, what are the insurance companies that used the database to reduce medical claims doing about it? Charged with such knowledge are they reviewing and auditing their claims payment history and paying providers back for the wrongful reductions? You would think that when the insurer learned of such a systemic problem it would take its obligation to pay claims seriously, retrospectively audit its claims paying practices and re-pay wrongfully reduced claims. How about notifying its insureds about how UCR rates are calculated and changing its insurance policies to disclose exactly what standard will be used to determine usual and customary charges? I have seen audioconference advertisements targeted at insurers as "Health Plan Strategies for Minimizing Financial and Legal Risks" but I have not heard bout one insurer proactively auditing claims to pay back invalidly reduced UCR reductions.Mega Life and Health $17M Settlement with MA AG
In addition to the $20 million fine by regulators, the Massachusetts Attorney General's office reached a $17 millions settlement with Mega Life in Massachusetts. The Massachusetts case involved similar practices as those investigated by regulators. The case also focused on minimum coverages required by Massachusetts law that Mega Life was not providing. We will try to find out if any other states are pursuing similar cases against Mega Life and report back here.Silent PPOs in CA Workers Comp?
There has been a battle brewing in California over whether Silent PPO discounts are being taken on certain workers compensation medical claims. In these types of cases, there is always the threshold question of what court hears the case because, as a general rule, unpaid work related medical bills are typically adjudicated by a workers compensation court. If a challenge is brought in a workers compensation court, which is typically an administrative court, the court first decides whether it has jurisdiction, i.e. the authority, to hear such a dispute because it involves delving into private contracts between medical providers, PPOs and insurers, something usually left to a court of more general jurisdiction. If the workers compensation court exercises jurisdiction, it then analyzes whether PPO discounts can be applied under the state's workers compensation laws. Sometimes the state workers compensation laws address PPO discounts and sometimes they are silent on the issue (no pun intended). For any court to get its hands around this issue, it will invariably have to examine the PPO contract between the medical provider and the PPO, whether there is any kind of relationship between the provider and the insurer taking the discount and whether there were any steerage mechanisms in place to get the injured worker to the provider's office.Mega Life and Health Fined $20 Million for Market Conduct Issues
A Multi-State Market Conduct Examination of Mega Life and Health and its affiliates resulted in a whopping $20 million fine for market conduct violations. http://www.oic.wa.gov/oicfiles/marketconduct/2007mc/MegaReportFinal.pdf. A Market Conduct Examination is when the insurance regulators examine an insurance company's practices. The examination made several significant findings relevant to medical providers who deal with The Healthmarkets, Inc. Insurance Companies comprised of Mega Life, Mid-West Life National Life Insurance Company of Tennessee and The Chesapeake Life Insurance Company. The examiners found 1) deficient claims handling practices, 2) changing CPTs codes while adjudicating claims, 3) delaying new claims while waiting for information on pending claims and 4) failing to adjudicate claims in the correct insurance entity. All of these findings are significant to a medical provider trying to get paid from one of these entities. Medical providers also need to be vigilant of any use of PPO discounts and UCR reductions by these entities. With findings such as changing CPT codes and processing claims in the name of the wrong insurance entity, medical providers need to be on the watch for Silent PPO discounts and wrongful UCR reductions.Will the Silent PPO Model Law Help Medical Providers?
The National Conference of Insurance Legislators (NCOIL) convened last Fall to draft a model Silent PPO Law called the "Rental Network Contract Arrangements Model Act." This model Silent PPO Law should be read by all medical providers (and the provider's lawyers and medical auditors) who deal with PPOs. http://www.ncoil.org/HomePage/2008/AdoptedRentalNetworkModel.pdf.
The same concerns addressed in the model law are discussed in detail in plain English in our book The Ultimate Provider's Guide to Silent PPOs. I wish the NCOIL had allowed me to testify at any hearings they had on this issue. I am most concerned about the practical meaning of Section IV of the proposed law entilted "Contracting Entity Rights and Responsibilities," which seeks to make the downstream accesser of discounts contractually obligated to the terms and conditions of your contract with the PPO. A well intended concept but it would have been better to legislate basic "steerage" requirements in the model law rather than leave it to PPOs and discount providers to manipulate their contract language for their benefit. If your practice does not negotiate the terms of its contracts with the PPOs, loose contract language (i.e. the "terms and conditions of the provider network contract") could cause you to lose a lot of money. There is no mention of steerage in the bill, in any form, and the onus is still on your contract negotiator to figure all this out before a contract is signed.
All Types of Medical Providers Fall Victim To Ingenix UCR Rate Reductions
The Senate report on the UCR rate investigation concluded that the Ingenix data appeared "to be regularly used to calculate reimbursements in many other insurance products that pay medical claims" besides health insurance companies. Click Here For example, the Senate Committee received evidence that workers compensation insurers and that catastrophic medical and accident insurance policies used Ingenix UCR rates. In addition, these UCR reductions seem to have been used on claims of all types of medical providers, including dentists. The Senate report indicates that the Ingenix UCR rate reduction problem, which arose in the context of out-of-network claims, appears to be much larger than expected. Medcial providers and consumers are in all likelihood owed millions of dollars due to low UCR reimbursement rates. Although some of the larger insurance companies have been sued for the use of the Ingenix database, there are still scores of smaller insurance companies that are trying to fly under the radar of the UCR rate litigation. Now that these insurers know about the problem, are they going to come forward and reimburse medical providers and consumers for invalid UCR reductions?
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Phillips & Garcia, P.C.
13 Ventura Drive
North Dartmouth, MA 02747
Toll Free: (877) 892-5620