It's a provider nightmare to be sure, having to contend with the murky business of insurance recoupments.
And given the level of returns recoupments reap for insurers — for every dollar spent in investigating overpayments, $7 is recovered, according to BCBS Association statistics — it’s a practice that many health plans will continue to capitalize on for some time.
The process is said to recover hundreds of millions of provider dollars each year, and the doctors themselves are given little opportunity to pose any opposition.
“[Recoupments] represent a simple way for insurers to enhance their profitability with little oversight or complications, by simply demanding money back from providers and then unilaterally taking it back by offsetting the alleged overpayment amounts against new and unrelated claims,” explained Brian Hufford, a partner at New York’s Zuckerman Spaeder, who oversees the firm’s healthcare insurance litigation practice group.
“Insurers have done so while giving providers little, if any, opportunity to challenge the retroactive finding that the previous benefits had been overpaid,” Hufford told Medical Practice Insider.
Many physicians are struggling to combat the insurance tactic, but it doesn’t have to remain as such, Hufford argued. More than half the battle has to do with providers understanding their rights under the Employee Retirement Income Security Act, a remedy that has been reiterated by the courts per recent rulings on the matter.
“ERISA provides rights to beneficiaries, which are defined as 'a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.' This has been interpreted to mean that a provider may become a beneficiary based on an assignment from a patient which designates to the provider the right to receive the benefit payment,” Hufford said.
Moreover, “for an in-network provider, the provider may become a beneficiary due to the fact that the plan itself designates the provider as the party to whom the benefit is paid.”
In light of these findings, providers should consider the following steps when faced with recoupments, according to Hufford:
- Assert your rights under ERISA. This means that [you] should notify the insurers that are seeking a "full and fair review" of the underlying determination that benefits had been overpaid and request access to all underlying documentation or related information that served as a basis for the repayment demand. This will then put [you] in a position to challenge the demand.
- Provide proper patient assignments. Critically, providers need to make sure they have legitimate assignments from their patients so as to eliminate arguments insurers may make about provider standing. These assignments should expressly state that the patient is assigning to the provider not only the right to receive the benefit payment, but also the right to appeal any denials of benefits and to pursue any remedies otherwise available under law, including under ERISA. Ideally, the assignment should also state that the patient is designating the provider to be the patient's "authorized representative" under ERISA, which the Department of Labor requires insurers to recognize. The provider should then show copies of such assignments to the insurer and ask the insurer to recognize the provider as having the right to assert ERISA remedies.
- Facilitate communication and preserve documentation. Maintain communications with insurers and ask for assurances throughout the process that the insurer is accepting as valid the billing protocols being used by the provider. Providers should also ensure that they contact the insurer to verify coverage for each patient, both with respect to the patient being insured by the insurance company and to verify coverage for the services at issue. Maintain verification and authorization records, which can serve as a strong defense should the insurer later come back to deny coverage or seek repayments.