What to Do When Services are Not Paid by a Commercial Payer

If a practice is contracted as a participating provider with commercial insurers and networks, it must pay close attention to the patient "Hold Harmless" sections of the agreements. Many agreements prohibit billing the patient for services that are unpaid due to the insolvency of a payer (which may be the insurer or a self-funded employer), when the payer deems a service not medically necessary, for lack of compliance with utilization programs, or for failure to file a claim in a timely manner. Some agreements even go so far as to prohibit a practice from having a waiver signed by the patient in which the patient agrees to be responsible in these circumstances.

The best way to protect a practice so that it can bill the patient for services not paid for by the plan is twofold:

1. Re-negotiate the language in agreements in the Member Hold Harmless provision, sometimes called "Billing the Patient," or the like, to more favorable language.
2. Implement a patient financial responsibility statement / waiver* and signature process so that your patients acknowledge their responsibility to pay during these circumstances.

In re-negotiating the contract language, be sure the terms reflect that it is "only when required by applicable law" that you will not bill the patient / member under the circumstances that the plan is insolvent or has determined that the billed services are not medically necessary. In many states, practices are bound by such provisions by state regulations, but only with respect to state regulated HMOs and certain fully insured or government plans. These plans are generally required by law to retain reserves that will pay claims for a matter of months should the plans become financially unstable.

The majority of the members / patients that practices see under most agreements are in self-funded plans that operate under the federal Employee Retirement Income Security Act (ERISA). These plans do not have the same regulatory reserve requirements as the plans discussed above, and the contract should reflect that a patient waiver for such plans can be used to hold patients financially responsible if a self-funded plan does not pay for any service. The risk of a self-funded plan going belly up overnight and not having funds reserved to pay recent claims is therefore much greater. If a practice signs a network agreement that says that it can never bill the member for services not paid for by the self-funded plan, even in the case of insolvency or when the plan determines the service to be medically unnecessary, then billing the patient is technically prohibited even when there is a waiver signed by the patient agreeing to pay for claims in these cases.

In revising your patient responsibility statement or waiver for patients covered under private payer plans, be sure to specifically include the patient's promise that he or she will be financially responsible, as allowed by applicable law, in the event that:

• His or her insurer or self-funded employer does not pay the claim in a timely and accurate manner
• The insurer or payer deems the service to be either not medically necessary or to be an excluded or non-covered service
• The payer or insurer denies the claim for lack of timely filing or adherence to utilization or payment policies
• A claim is prospectively or retroactively denied due to lack of eligibility or benefits

Although the practice is obliged to adhere to utilization management programs and payment policies in most agreements, many payers' programs and policies are not readily accessible, especially when leased networks are involved. The patient needs to be financially responsible and compliant with program requirements. When a multitude of claim administrators and employers are renting a network such as Multiplan, Galaxy, or Three Rivers Provider Network, each party leasing the network may have unique programs and policies that are not found on a central web site or portal. There can be some very good reasons to contract with leased networks, but these varying policies can make monitoring those who rent the networks more challenging. Sometimes these networks are less likely to modify the hold harmless language so as to appease all of their renting parties.

In addition to the hints provided above, when defining and administering the terms of the patient responsibility statement / waiver, the practice should be prepared to advise the patient in advance of denial, if it is aware that a service may not be covered. Provide the patient with the likely cost and payment terms that will be accepted, preferably in writing, including any prompt pay or hardship discounts that might apply. This type of communication can assist you in managing the patient's expectations and his or her commitment to timely payment. These extra steps can also add to the practice's compliance with the newly negotiated and more favorable hold harmless terms.

 

From the Jan/Feb issue of HBMA Billing by Penny Noyes http://www.hbma.org/news/public-news/n_what-to-do-when-services-are-not-paid-by-a-commercial-payer

 

Four Areas to Review to Reduce Denied Medical Claims

Tracking your practice's denials is a fantastic idea. It helps you identify where your mistakes are occurring, so that you can update your internal policies and procedures accordingly. But, more importantly, there are several other areas that you can track to ensure that your denials continue to decrease. This shows that you are managing this area of your practice effectively.

There are at least four areas that you can review on a monthly basis that will ensure your denials will continue to decrease, they are:

1. Your charges out, your payments in, your adjustments and your percent collections.
It's not just the charges out and payments in. If your billing staff is making decisions to write off accounts without your knowledge, your adjustments percent will be higher than contractually necessary. Track this on a monthly basis and see how this will change.

2. Your billing register should tell you lots of information about your billing department. You will have your monthly charges, and the amount you actually billed out. The difference will be the number of re-bills completed. Your billing department rebills a claim when a correction has been made. A correction is driven from a denial. The number of rebills is a direct correlation to the number of denials.
You'll take the dollars billed out minus your monthly charges, and get your dollars rebilled.

3. Your paper denials are the next area to review. Conduct a physical count each month on how many of these paper denials come into your practice. This is complete transparency of your billing department.
Contractual adjustments are not denials, but if a therapist cannot code correctly, this is an area to review.

4. Electronic Explanation of Benefits (E-EOBs) is the next area. These are very similar in context to the paper denials, the E-EOBs reveal a lot of information that can help you review your systems and processes.
E-EOBs can be easily tracked by your billing department. An accurate hand count should be completed monthly.

The key to reviewing all of this information is to utilize the results in an effective manner. If you find that you are seeing a workers' compensation patient that has an out-of-state plan, they may not use the workers' compensation codes for your state. The best thing to do is to call the nurse-case manager and ask! Don't just write those off as un-collectable. Make a five-minute phone call and find out.


If you are managing an insurance contract that places a monetary cap on how much a patient can use for their medical treatment, adhere to that cap. When you exceed it, it is much less likely that you will be able to recover those claims. If there is any other visit limit, or number of times you can code a procedure within a year's time, find out when the front office performs the insurance verification.


There is a reason why insurance companies dominate the healthcare market, and small practices are going out of business. They bank on the fact you won't follow up. Make this a priority of yours, today.

Article By P.j. Cloud-moulds - See more at: http://www.physicianspractice.com/blog/four-areas-review-reduce-denied-medical-claims#sthash.8t9HvDwD.dpuf