As many know, out-of-network providers have much different appeal rights with commercial plans than in-network providers. It is important to understand each health plan’s appeal procedure as well as time requirements for an appeal may vary. However, the appeal process is still one of the most important tools providers have to get paid in the current environment of reduced reimbursements, caps on the number and frequency of services, bundled payments based on specific codes, delayed payments, daily errors in claims processing leading to denied claims, claw backs, and the list goes on. Continue reading →
Cigna recently sued a Texas hospital, Humble Surgical for overpayments. Humble Surgical is an out-of-network (OON) provider. Cigna alleged fraudulent billing practices and that the hospital engaged in a scheme to defraud payors by waiving members’ financial responsibility.
While the suit involved many other allegations our article focuses on the arguments Cigna made on failure to collect co-payments, deductibles, and co-insurance and fee-forgiving practices by the hospital. There were several other issues raised that are important to various practices that Cigna has engaged in with out-of-network providers. Cigna has consistently audited South Florida providers alleging failure to collect patient financial responsibility or fee-forgiveness, then informing the provider that it was not entitled to any reimbursement because these practices fell within the exclusionary language of the member’s plan.
The suit brought under federal law, ERISA and also Texas common law seeking reimbursement for all overpayments. Cigna was seeking equitable relief including imposing a lien or constructive trust on fees paid to the hospital.
Humble Surgical counter sued against Cigna for nonpayment of patients’ claims, underpayment of certain claims and delayed payment of all claims in violation of ERISA, including other causes of action. Here’s what happened: Continue reading →
While your healthcare business may be compliant with billing regulations and coding, this does not mean that your payer is compliant and has paid you correctly per your contract. Providers know that Fraud and Abuse has been one of the largest areas of focus for payers and the government over the past 20 years. Due to this attention, many healthcare businesses engage auditors to audit their compliance of claims quarterly or annually. However, in addition to compliance audits, a provider should be auditing their payer interaction to create a dynamic blueprint of denial management and payment recovery. The AMA states that a 5% denial rate for an average family practice equates to about $30,000 walking of the door. A good benchmark for payer compliance would be a denial rate of 5-10%. Often times, practices and healthcare businesses operate with a much higher rate, and even in the 20-30% range without even knowing it.
When auditing the payer interaction, several components should be included in the review including:
Denial rate percentage
Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period as an Aggregate
Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period by each Payer
Claims denied categorized by denial reason as an Aggregate for previous 12 months
Claims denied categorized by denial reason by each Payer for previous 12 months
Claims that have been appealed, the date submitted, the date of the outcome, the outcome by each Payer
Claims not paid according to fee schedule as an Aggregate for previous 12 months
Claims not paid according to fee schedule by each Payer for previous 12 months
The case is a departure from the usual scenario, which involves (a) providers suing payers for payment and relying on state laws to do so, and (b) provides side stepping those state laws by successfully arguing that the federal ERISA law applies (which usually offers provides less favorable remedies). Continue reading →