Transcript Insurance Reimbursement in Virginia

Insurance Legal Reimbursement Issues
presented to
Western Reserve AAHAM
Legal Reimbursement Issues
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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.

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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:
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♦
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)
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♦
♦
♦
♦
♦
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:
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♦
♦
“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…



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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
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