Nobody likes to work for free. Physicians and other healthcare providers are frequently at risk of non-payment for valuable services to patients due to third-party payer mistakes and/or attempts to arbitrarily delay, reduce or avoid reimbursement. A common practice of payers is, for example, to deny reimbursement based on an allegation that the provider did not submit correct paperwork or alleged improper coding. Another tactic of third third-party payers is to simply adjust a payment downward because the payer concludes the physician is entitled to less reimbursement based on what was paid on a prior, “similar” claim. Reimbursement issues have led 49 states to enact laws to address such problems. Unfortunately, State laws only mildly abate the problem for healthcare providers.
Action that a healthcare provider can take to address payer abuse often depends largely on the State in which the provider is located. Some states allow physicians to take direct court action against a third-party payer with regard to reimbursement issues. Other States require providers to appeal to their insurance regulatory agencies to take action against a payer for any prompt pay issues, or similar exhaustion of administrative remedies. A regulatory agency may investigate and take action against a third-party payer. Provider options may also be affected by whether a State’s prompt pay laws are preempted by the Employee Retirement Income Security Act (ERISA), which provides its own remedies in some circumstances.
Steps physicians can take to protect reimbursement revenue and reduce the chance of disputes with payers include:
Read every word in your payer-physician contract: Pay close attention to the language used in the contract and the terms and conditions. Are the policies and procedures affecting payment clearly laid out? Does the language include a requirement for the payer to submit advance notice of any modifications to payment? Does the contract clearly define what is considered a “clean claim”?
Don’t procrastinate: In submitting claims, believe Murphy. Allow your practice more than enough time to submit a claim to a payer. You never know what delays, issues, or human errors could give a payer the opportunity to contend your claim was late or submitted incorrectly.
Be clear about what the payer must approve: Make sure that the third-party payer specifies all services and items that require prior authorization. The contract should include what criteria must be met for medical necessity determinations.
Include a prompt-payment obligation: Negotiate a prompt-payment clause for the contract and specify in the contract which State’s laws apply regarding reimbursement issues. Create a defined timeline for claim submissions and supplemental information for a claim.
Don’t let technology get in the way: Ensure that your computer systems and programs and those of your payer are compatible. Make sure that when your practice files a claim, you know that the third-party payer timely received it.
Unfortunately, with every precaution taken, there will still be ample opportunity for reimbursement disputes. Our boutique business and healthcare law firm is focused on representing healthcare providers and professionals and can advise and represent your medical practice on both the contracting stage and the reimbursement stage of a third-party payer relationship. For a confidential consultation contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta).
*Disclaimer: Thoughts shared here do not constitute legal advice.