Look to law if payer’s recoupment process is flawed
September 14, 2017
By Roy Edroso
If a payer is threatening to recoup alleged overpayments and doesn’t have an appeals process (or has only a shell of one), make sure you get the protection to which you’re entitled — and use state or federal law to get them to pay attention.
Medicare recoupment is more straightforward. You may be aware that, thanks to section 935 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, you can keep Medicare contractors from recouping overpayments during the first two levels of appeal, redetermination and reconsideration: You have to formally request an appeal within 30 days from the original notice, and within 60 days of a negative redetermination decision. (If you lose the reconsideration, they can start taking the money even if you’re appealing to the third level. And while the recoupment is stopped, interest on what they say you owe will still accrue, so you’ll have to pay that if your appeal doesn’t succeed.)
Even if you’re not sure of your chances of success in appealing, you can at least stall the recoupments by doing so — and, given the Medicare appeals backlog, that could be a considerable delay, says Wayne J. Miller, health care law attorney and partner at Compliance Law Group in Los Angeles (PBN blog 1/13/17).
Tip: Do your appeal submission right. It’s very important to follow Medicare’s procedural requirements that include providing all of the patient claim information, says Miller. “This may involve not only sending a copy of Medicare’s overpayment letter, but also including a list or spreadsheet that provides all of the requested information about each claim. Medicare may refuse to stop recoupment if procedures aren’t followed.”
Private plan problems
With commercial payers, though, if you’re in network, there may be an appeals process written into your contract — or there may not; sometimes the contract just refers to a process in their policies and procedures, which you may have to go dig for at their website, says Damaris Medina of the Buchalter law firm in Los Angeles.
These processes can be little more than formalities designed to meet legal requirements without giving the provider a real chance to win. So “if the claim is big enough, and the provider has been unsuccessful going through the plan’s appeals process, it may be economically feasible for the provider to litigate against the plan either in Court or in arbitration — depending on whether the contract has an enforceable arbitration provision,” says Medina.
The plan many argue, if all your claims haven’t gone through the appeals process when you go to law, that you don’t have standing because they haven’t exhausted that process. “However, the provider can argue that the plan’s process is futile if the plan doesn’t often overturn its decision,” says Medina. “The concept is that you won’t have to bang your head against the wall if the plan never changes its mind.”
From there you can challenge the plan’s finding on a variety of grounds. You could, for example, send your claims out to an auditor and (assuming the result is favorable) use their opinion to bolster your case. “That can put you in an advantageous position, especially with specialty coding — because plans don’t always have certified coders, particularly in some specialties,” says Medina.
You can also contest their math: The plan may have put out a 30-chart query, determined a 10% error rate, and applied that to a year of claims to determine what they overpaid; you could send a year’s worth of charts to an auditor and contest their extrapolation on the strength of the auditor’s finding, says Medina.
4 tips for out-of-contract challenges
If you get a recoupment request on out-of-network claims, there’s a good chance the payer will not offer you any recourse or appeal at all. In that case, Miller advises you look to the law — not necessarily to bring suit (though in the case of large payments that may be an option), but as a possible bargaining chip to take to the payer when you negotiate.
Check the law for limitations. Your state law may restrict the payer from asking for certain recoupments. “In California, we have a law that specifically says payers cannot recoup or even seek refunds for dates of service that are from more than a year before the notice by the payer,” says Miller. “When payers don’t follow that provision, that qualifies as an unfair payer practice, — and you can challenge that not only internally but also to the state Department of Insurance or the Department of Managed Health Care.”
Argue ERISA. ERISA is a federal law which is sometimes neglected by providers as a basis for insurer challenges, including on recoupments (PBN 8/1/16). “If the patient is in a group plan, which ERISA covers, that will at minimum require an appeals process if you have assignment of benefits,” says Miller, and you could also argue that while you’re going through the appeal they can’t recoup. Also, since it’s federal law, you can go to the U.S. Department of Labor to complain, or at least use that as a chip to get to negotiation.
Request permission to come aboard. If you don’t have a contract but are open to becoming contracted with that payer, you may want to introduce that prospect in negotiations, says Medina. “That may put them in a different mindset when it comes to settling past claims.”
Negotiate to close the file. If you get to negotiation, negotiate for more than the payments — negotiate closing the file with the payer so none of your claims with the payer can be reopened. “After the settlement they may want to go back and look for new issues, so it’s a good idea to pursue that,” he says.
One more tip, to do before it comes to this:
Get full assignment of benefits from the patient. If you don’t have a contract with the patient’s plan, the patient will. That’s why your admission form probably has assignment-of-benefits boilerplate to cover you when it comes time to collect charges. But, says Miller, it’s important to get the patient to assign you the specific right to pursue claims against the payer.
“What trips up providers is they sometimes get patients to make assignment in their boilerplate that’s generic, and it might not be specific enough for the courts,” says Miller.
Used by permission of Part B News.
