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Download AHC Presentation - AAHAM Western Reserve Chapter
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Insurance Legal Reimbursement Issues presented to Western Reserve AAHAM Legal Reimbursement Issues Who We Are ♦A/R Management Firm - Founded in 1992 - 512 Clients in 43 States, including DC - 600+ Employees (100+ Attorneys) ♦Attorney Involvement ♦Utilization of the Law - State and federal regulations drive protocols ♦Technological - Accounts worked or managed by an attorney - Attorney-written payment demands and appeals - Research and litigation attorneys Advantages - Denial management technologies - Document imaging and workflow distribution - Web based client reporting Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Reimbursement Issues ♦ Parental Liability ♦ Misquote of Benefits ♦ Spousal Liability ♦ COBRA ♦ Wrongfully Delayed ♦ Medical Necessity Denials ♦ Preauthorization Denials ♦ Refund Demands ♦ Auto Accident/Third Party Claims ♦ Usual & Customary Denials ♦ Silent PPOs ♦ Pre-existing Conditions Liability Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Parental Liability Common Scenario ♦ Child is 5 years old, is covered under father’s health insurance plan, but lives with mother. ♦ Child is hospitalized. ♦ Who is ultimately responsible for Child’s hospital bill? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Parental Liability Legal Concepts Doctrine of Necessaries ♦ Minor child is not responsible. ♦ Parents’ liability for necessary medical treatment is ‘joint and several’, meaning each parent may be pursued individually for the obligations of both. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Spousal Liability Common Scenario ♦ Mary and Jason are married. However, they file separate taxes and have separate bank accounts. ♦ Jason becomes hospitalized for a heart related illness and dies. ♦ Who is ultimately responsible for Jason’s hospital bill? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Spousal Liability Legal Concepts - Pennsylvania In Pennsylvania, an individual may be held liable for the necessary medical care of his or her spouse. See Porter v. Karivalis,718 A.2d 823 (1998) & Pa. Stat. Ann. tit. 23, § 4102. ♦ Practically speaking: If Husband cannot pay his bills, Provider can seek payment from Wife’s assets. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Wrongfully Delayed Claims Common Scenarios ♦ High balance review ♦ Medical review ♦ Audit ♦ Deny receipt of claim ♦ “The claim shuffle” Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Wrongfully Delayed Claims Health Insurance - Prompt Pay 31 Pa. Code § 154.18 & 40 P.S. § 991.2166 ♦ Licensed insurer or managed care plan must pay clean claim or uncontested portion of claim within 45 days of receipt. ♦ “Paid” is defined as check mailed or funds transferred. ♦ Penalty is interest equal to 10% per annum on the proceeds or benefits due on claims delayed for more than 45 days. Interest must be paid within 30 days of claim payment. Interest less than $2 does not have to be paid. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues ERISA State v. Federal Jurisdiction Selffunded Fullyfunded ERISA & U.S. DOL State Insurance Laws Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Wrongfully Delayed Claims ERISA Claims ACTION TIME LIMIT Initial Benefit Decision 30 days from date of claim Extension 15 days if plan notifies claimant Claimant Forward Requested Info 45 days from date of notice Appeal a denial 180 days from notice of decision Decision on 1st Level Appeal 60 days from receipt Decision on 2nd Level Appeal 30 days from receipt Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Wrongfully Delayed Claims Workers’ Compensation - Pennsylvania Pa. Stat. Ann. tit. 77, § 531(5) & 34 Pa. Code § 127.210 ♦ Within 30 days of receiving a completed medical bill the carrier must: ♦ pay per fee guidelines; or dispute the reasonableness or necessity of the treatment. Penalty: 10% per annum on claims not paid timely. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Wrongfully Delayed Claims What Can You Do? ♦ Verify date claim received. ♦ If receipt denied, fax claim and confirm receipt with claims representative. ♦ Overnight or mail claim return receipt requested. ♦ Quote statutory language when speaking to claims representative. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Usual & Customary Denials Common Scenario ♦ Hospital is not contracted with Stonewall Insurance. ♦ Patient is insured through Stonewall Insurance and comes to Hospital for treatment. ♦ Hospital submits claim to Stonewall Insurance for payment. ♦ Stonewall Insurance pays a small part of the claim and denies the balance as “above the usual & customary rate.” ♦ Hospital receives an explanation of benefits with only partial payment. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Usual & Customary Denials Legal Concepts ♦ If provider is not contracted with payer, payer is NOT entitled to a discount. DISCOUNT Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Usual & Customary Denials What Can You Do? ♦ Verify that patient is not a member of a contracted PPO. ♦ Do not accept payer’s determination at face value. Demand… - a detailed itemization of all denied or reduced charges; - an explanation of the evidence relied upon in determining that charges were excessive; - a printout containing the charges of the other providers against which your facility was compared; and - the age of the evidence utilized in the comparison. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent Preferred Provider Organizations Common Scenario Patient $100,000 Total Charges Payer Non-Contracted 100% of Total Charges Hospital Expected Reimbursement = $100,000 Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent PPO Patient Common Scenario $100,000 Total Charges Payer PPO Broker Buy Into Existing Network Hospital ABC Network Actual Reimbursement = $60,000 40% Discount EOB notates “ABC Network Discount – 40%” Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent PPO Legal Concepts There is no quid pro quo! ♦ Payer has not given anything to the provider, and is therefore not entitled to anything from the provider. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent PPO What Can You Do? ♦ ♦ Copy patient’s insurance card during admission, and note PPO logos in the computer. Cross check this with the EOB upon receipt. ♦ Unexpected discount? Contact payer and question it. ♦ Check your contracts… Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent PPO What Can You Do? Check your contracts to ensure . . . ♦ Insurer is not permitted to sell or distribute negotiated rates ♦ Mandatory notification when payers are added or deleted ♦ Provider can cancel if network unacceptably expanded ♦ Logo type and location on card is specified Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Silent PPO PPO Logos ♦ ♦ ♦ ♦ PPO logos appear on insurance cards to indicate the networks the payer is a part of. Rule of thumb: Use largest logo on card to determine expected network discount. If all logos are the same size, go in order from left to right, top to bottom. Copy the patient’s ID card and note all logos that appear on the card in the account notes. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Pre-existing Condition Investigations/Denials Common Scenario ♦ Patient enrolls in her group health plan 10/1/10. ♦ Patient is treated by Hospital for an injury to her right knee on 03/01/11. ♦ Hospital submits claim to Payer and 30 days later is told that the claim is pending a pre-existing condition investigation. ♦ Hospital does some research and finds out that Patient’s left knee was treated on 07/01/10. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Pre-existing Condition Investigations/Denials Legal Concepts - HIPAA Health Insurance Portability and Accountability Act of 1996 (HIPAA) ♦ ♦ ♦ ♦ ♦ ♦ Applies to most group health plans. Limits pre-existing condition exclusions: - 6 month maximum look-back and - 12 or 18 month maximum exclusionary period. Credits prior coverage to reduce exclusionary period. HIPAA mandates that state law cannot be broader. Never a pre-existing condition: pregnancy & genetic information. Newborns & adopted children added within 30 days are not subject to pre-existing condition exclusions. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Pre-existing Condition Investigations/Denials Legal Concepts - Pennsylvania Group Health Plans (31 Pa. Code § 89.402) ♦ The look-back period can be no more than 90 days; the preexisting waiting period can be no longer than 12 months. Individual Health Plans (Pa. Stat. Ann. tit. 40, § 776.6) ♦ The pre-existing waiting period can be no longer than 12 months for any pre-existing condition not specifically excluded from coverage by the policy. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Pre-Existing Conditions What Can You Do? ♦ ♦ Get policy’s definition of ‘pre-existing condition.’ If enrolled in group health plan, make sure payer applies HIPAA definition: ♦ ♦ “A condition for which medical advice, diagnosis, care or treatment was recommended or received within 6 months of the enrollment date.” Review records for any prior treatment for same condition Two types of appeals are possible: Demand end of investigation with medical evidence showing condition could not be pre-existing, OR Demand end of investigation with evidence of prior creditable coverage showing there is no applicable exclusion period. To illustrate… Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Pre-Existing Conditions Evaluate Creditable Coverage/Effective Dates 8/5/2007 Began working for XYZ Chemical 9/15/2010 Last day at XYZ Chemical 10/17/2010 Began working at ABC Printing 11/17/2010 ABC Group Health Plan effective date 12/15/2010 Treatment Date 3 Yrs & 45 Days 31 Days 30 Days Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Misquote of Benefits Common Scenario ♦ Patient insured through Cigna. ♦ Needs elective back surgery. ♦ Hospital calls Cigna to verify benefits prior to admission. ♦ Hospital is told by Cigna representative that Patient has coverage. ♦ Hospital submits claim. ♦ Claim denies due to “No coverage on that date of service.” Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Misquote of Benefits Legal Concepts Promissory Estoppel ♦ Occurs when Payer makes a promise to Hospital and Hospital reasonably relies on that promise to its detriment. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Misquote of Benefits What Can You Do? ♦ Verify benefits. ♦ Be timely. ♦ Keep detailed records of phone calls. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues COBRA Common Scenario ♦ Patient has a major medical condition and is provided extensive care by the Hospital. ♦ Patient does not have health insurance and does not qualify for Medicaid. ♦ Patient recently had health insurance, but was “downsized” last month. ♦ Is there any way Patient could still have health insurance? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues COBRA Legal Concepts Consolidated Omnibus Budget Reconciliation Act of 1985 ♦ ♦ Applies to Employer-sponsored Health Insurance Coverage. Requires Employer to notify COBRA eligible employees. - When must Employer notify? - How must Employer notify? ♦ ♦ ♦ Qualifying event results in 18 or 36 months of coverage. 60 days to elect COBRA coverage. 45 days to pay premium. - Who can pay premium? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues COBRA What Can You Do? ♦ If patient’s coverage has lapsed, determine whether patient has COBRA coverage or can elect it. ♦ If election period has passed, determine whether employer gave patient sufficient notice. - Employer who fails to notify is responsible for claims. ♦ If patient has not paid his premium, Hospital can pay premium. - Weigh costs and benefits of paying premium as there are no restrictions on who may pay premium. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Medical Necessity Denials Common Scenario ♦ Patient was admitted via the Emergency Room for chest pain. ♦ Patient spent 2 days inpatient. ♦ Hospital submits Patient’s claim to Blue Cross for payment. ♦ Blue Cross pays Day 1, but denies Day 2 stating “Patient could have been treated at a lesser level of care.” Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Medical Necessity Length of Stay Reviews 60% of medical necessity issues are due to length of stay Appropriate Reasons Fever Wound Infection Labs IV/IM Medications Pain Other procedures requiring acute professional care Inappropriate Reasons x No rooms for transfer x Patient not ready x Family not ready x Weekend x Additional Testing x Patient Age x Delays of any kind Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Preauthorization Denials Common Scenario ♦ Patient was assessed and stabilized in the Emergency Room and was then admitted for further observation and testing. ♦ Hospital calls number on Patient’s Humana card and attempts authorization, but can only leave a message. Humana does not call back. ♦ Hospital submits Patient’s claim to Humana for payment. ♦ Humana denies claim as not preauthorized and states that balance should be written off. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Medical Necessity Denials Legal Concepts ♦ Medical standards applied by Insurer in its determination must be consistent with community medical standards. ♦ Policy definition of “medically necessary” should be construed liberally so that uncertainties about the reasonableness of treatment is resolved in favor of coverage. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Medical Necessity Denials What Can You Do? ♦ ♦ ♦ ♦ Obtain specific reason for the denial and criteria utilized by carrier to determine medical necessity. Have utilization review examine the entire medical record. Use Interqual Criteria and DRG guidelines in appeal. Appeal to payer more than once. - Try to get claim to independent medical examiner; often at a second level of appeal. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Preauthorization Denials Legal Concepts - Pennsylvania 31 Pa. Code § 154.14 ♦ Managed Care Plans are prohibited from requiring that enrollees or health care providers obtain prior authorization for emergency services. ♦ Plans are required to pay all reasonably necessary costs for enrollees meeting the prudent layperson definition of emergency services provided. ♦ The provider should notify the managed care plan of the emergency services delivered within 48 hours of treatment or on the next business day, whichever is later. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Preauthorization Denials What Can You Do? ♦ ♦ Document all information from preauthorization call Strong appeals can be based on the fact that: - preauthorization was attempted, but not obtained and insurer does not allow authorization 24 to 48 hours after admit; - hospital was told that authorization is unnecessary for specified treatment; or - member failed to advise the hospital of the coverage. ♦ If scope of treatment changes after authorization - verbally request that the authorization be changed; or - submit appeal requesting retroactive authorization of the admission, with the medical records to show the medical necessity of the inpatient treatment. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Refund Demands Common Scenario ♦ Hospital submits Patient’s $5,500 claim to Aetna for payment. ♦ Hospital received a $5,000 payment from Aetna. ♦ Three weeks later, “Accent Recoveries” sends a letter saying: - Patient’s coverage limits exceeded; and - Aetna’s payment was in error; and - Hospital must refund $5,000. ♦ Is Hospital legally required to refund Aetna the $5,000? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Refund Demands Legal Concepts Contract ♦ Contract language will dictate outcome of refund request Unjust Enrichment ♦ Occurs only when provider receives payment that exceeds total charges. Knowledge of Mistake or Fraud ♦ Provider has knowledge of mistake or fraud regarding coverage. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Refund Demands What Can You Do? Assess the situation! ♦ Contracted payer. Language may dictate outcome ♦ Non-contracted payer. Do not automatically refund. Argue that… Care was authorized, provided, reimbursed in good faith; Hospital had no knowledge of mistake in payment; and Hospital would not be unjustly enriched. Lastly, appeal based on the reason for the refund request. Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Auto Accident/Third Party Liability Common Scenario ♦ ♦ ♦ ♦ ♦ Bessie and Carl were in an auto accident because Carl ran the red light. Bessie was rendered unconscious due to serious head trauma. Bessie was rushed to Hospital’s Emergency Room. Bessie later sues Carl for damages, including the hospital bill. Who is responsible for Bessie’s hospital bills? Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Auto Accident/Third Party Liability Legal Concepts - Pennsylvania Liens ♦ Pennsylvania statute does not provide for a lien by a healthcare provider against a settlement from a third party liability action paid to a patient. Letters of Protection ♦ Necessary to protect hospital’s right to payment from damages recovered from a liable third-party. Subrogation Agreements Western Reserve AAHAM © AHC, Inc. 2010 Legal Reimbursement Issues Auto Accident/Third Party Liability What Can You Do? ♦ Obtain all necessary information including: - date of injury and accident details; - city and county where the injury occurred; and - relevant accident insurance (usually automobile insurance) policy information and health insurance information. ♦ Make sure Liens are filed before money is paid to an entitled person and in strict compliance with the statute. ♦ Scrutinize Letters of Protection and make sure they have: - Promise to pay and promise for full payment prior to any payment to patient; and - Promise that no additional attorney’s fees will be taken from the provider’s portion and Promise for regular status updates. Western Reserve AAHAM © AHC, Inc. 2010 Insurance Legal Reimbursement Issues presented to Western Reserve AAHAM THE END Are There Any Questions?
