Category State Health Reform

Aetna Fined $500,000 After Denying 93% of ER Claims in 2019

Aetna has been in the news quite a bit lately and it seems the insurance giant can’t get out of its own way. On August 25, 2020, the California Department of Managed Health Care (DMHC) ordered Aetna to stop improperly denying emergency claims and fined Aetna $500,000 for repeatedly failing to correct the problem after a sampling of claims from 2019 found it had denied 93% that it deemed unnecessary.

According to the DMHC’s recent press release:

This is not the first time Aetna has run into problems for questionable practices. In 2018, then Aetna Medical Director, Iinuma Jay Ken MD, admitted under oath, he never looked at patients’ records when deciding whether to approve or deny care. This revelation prompted then California Insurance Commissioner Dave Jones, to launch an investigation into Aetna’s practices.

During his videotaped deposition in October 2016, Iinuma — who signed the pre-authorization denial — said he never read Washington’s medical records and knew next to nothing about his disorder. He further said he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient. “Do I know what happens?” the doctor said. “Again, I’m not sure. … I don’t treat it.”

Just months after Aetna’s then medical director admitted he denied coverage for treatments without ever bothering to look at the patients’ medical records, an Oklahoma jury slammed Aetna with a stunning $25.5 Million verdict for recklessly denying medical coverage for proton beam therapy. The jury awarded the family of the deceased patient $15.5 million in emotional distress and another $10 million in punitive damages after denying proton beam therapy to Aetna policyholder Orrana Cunningham as being “investigational” or “experimental,” despite years of research and hundreds of medical experts who say otherwise.

The case details are very common and happen everyday across the nation: Patient pays for health insurance, patient gets sick and seeks treatment, insurer denies claim under the guise that services are deemed experimental or investigational.

According to the family’s attorney, Doug Terry,

“[this] case represents/exposes so much of what is wrong with health insurance,…This case gave the jury a look behind the curtain so they could see what goes on at a health insurance company when they deny claims.  The evidence showed Aetna’s denial of her claim involved overworked, under-qualified doctors working in the interest of their employer’s bottom line who are compensated in part based on the profitability of the company.”

Aetna was acquired by CVS Health in 2018.  The subsequent jump in CVS Health’s profits of more than 50% has been partly attributed to the fact that elective procedures Aetna health plan pays for were postponed or delayed amid the spread of the Coronavirus strain Covid-19. CVS Health’s net income soared 54% to $2.9 billion in the second quarter compared to $1.9 billion in the year-ago period, the company said in its earnings report issued Wednesday. It is not immediately clear if the emergency room denials have significantly contributed to earnings.

Avym has helped Self-Insured Health Plans recover millions from TPAs that engage in questionable practices. Avym advocates for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets on behalf of hard-working Americans. To find out more about Avym’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.

Originally Published by By ROI-NJ, By Anjalee Khemlani; Trenton | Jul 1, 2019 at 10:00 am : http://www.roi-nj.com/2019/07/01/healthcare/third-party-auditor-bill-signed-into-law-despite-insurers-opposition/

Third-party auditor bill signed into law

A bill that some insurers lobbied quietly to quash made its way through the Legislature and was signed by Gov. Phil Murphy on Sunday.

The bill calls for a third-party auditor to real-time audit the State Health Benefits Plan and School Employees Health Benefits Plan.

It was first introduced in October 2018 by state Sen. Paul Sarlo (D-Wood-Ridge), and came from a report commissioned by a New Jersey doctor that alleged

health insurers were skimming off the top of claims payments for the SHBP and SEHBP.

The report was published by California-based AVYM.

ROI-NJ previously reported that the state’s contracts with Aetna and Horizon Blue Cross Blue Shield of New Jersey are set to expire this year, allowing a revamp of the Request for Proposal process and changing the type of contracts the state has with insurers who administer the state plans.

The Office of Legislative Services said in its fiscal analysis of the bill that it could not put a specific savings amount from the audited claims, even though

the AVYM report alleges savings of more than $1 million to the state.

“Hiring a third-party medical claims reviewer to provide regular, frequent and ongoing review and oversight of the claims process, which process includes, but is not limited to, the receipt, management, adjudication and payment of claims, serves the best interests of the state, participating employers and the thousands of employees and their dependents covered under the (SHBP and SEHBP),” according to the legislation.

The goal is to have a medical claims reviewer hired in time to review claims from plans that will be in effect in January 2020.

Originally Published by By ROI-NJ, Anjalee Khemlani
Trenton | Apr 30, 2018 at 6:55 am : https://www.roi-nj.com/2018/04/30/healthcare/sarlo-in-letter-to-muoio-asks-n-j-to-look-into-details-of-health-insurance-contracts/

Budget and appropriations chair has questions about reimbursements, audits. State Sen. Paul Sarlo has asked Treasurer Elizabeth Muoio about the state heath plans’ third-party administrators. Reining In health care costs continues to be a challenge for many corporations and self-funded plans.

The story Isn’t any different for the state of New Jersey, the largest employer In the state. State Sen. Paul Sarlo (D-Wood-Ridge) is trying to find new solutions – and potentially hundreds
of millions of dollars In savings for the state – by addressing the Issue In a different way: Paying closer attention to how the state pays its contracted plan managers.

Last week, in a letter to state Treasurer Elizabeth Muoio, Sarlo asked the Department of the Treasury to determine if the health insurers are keeping any recovered funds, through savings from appeals, and if the plans are charging the state anything additional to what they pay the providers. 

Sarlo Letter to NJ Treasurer re TPA & Response

Sarlo also asked about surcharges related to out-of-state visits by plan members, and whether or not the state can cap those. 

In addition, he asked if the state is auditing Aetna and Horizon Blue Cross Blue Shield of New Jersey, the third-party administrators of the State Health Benefits Plan and School Employers’ Benefits Plan, which together cover more than 600,000 current and retired state employees and cost the state $6 billion in 2016 alone. 

The contract for both is set to expire in June, and a request for proposals with the same rules and requirements as the existing contract is currently out for bid. 

And, while the RFP adds to the timeliness of Sarlo’s request, it was not necessarily the impetus. 

Legislators began looking into the process in January after a New Jersey doctor, Rajnik “Raj” Raab, alerted them to a white paper he paid a California-based health care reimbursement recovery firm, AVYM, to produce. 

In the six-page white paper, the firm said New Jersey could save up to $1 billion annually: AVYM Transparency and Disclosure in Health Care Insurance

AVYM said such huge savings are possible because third-party administrators may not be paying back the state any savings they receive over time from claim appeals. 

Sarlo, the deputy majority leader who serves as the chair of the Senate Budget and Appropriations Committee, told ROI-NJ how such a scenario could play out. 

“Here’s what we think happens,” he said. “A public worker in town XYZ cuts his hand, severs his hand, it’s a serious accident. He incurs $50,000 worth of bills. He petitions the fund representing the town … we pay. Now they (insurers) scrutinize and, over time, after arguing back and forth, reduce it to only $40,000.” And, if the reduced amount comes after the $50,000 has already been paid to the insurers, there is no way to check or prove the extra $10,000 is returned the state. Sarlo said there is no evidence that the state has ever received a refund from the insurers. 

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The contract between the state of New Jersey and Aetna and Horizon, which ROI-NJ obtained through an Open Public Records Act request, shows that the practice in question is prohibited, and that the state can audit the payments at any time. 

Representatives from Horizon and Aetna declined or did not return requests for comment on the issue, pointing instead to the agreements they have with the state.  

The contract with the insurers addresses potential overpayments. 

According to the contract, the state only reimburses the insurer after the payment is made.  

“The (insurer) will be reimbursed for claim checks and electronic fund transfers to providers that have cleared the (insurer’s) bank account by the (insurer) transmitting the total amount cleared via electronic mail or facsimile machine to the Commission by 11:00 a.m., EST daily, to determine the total amount that will be funded by wire transfer to the (insurer)’s designated bank on the same day. The transmission must include a breakdown between state and local amounts,” according to the contract. 

The contract also has a provision about any overpayments or refunds: 

“(Insurer) must disclose, fully account for, and remit, to the Commission any and all funds received by it as the result of a recovery of an overpayment or incorrect payment, prescription drug rebates and other pharmaceutical revenues, or subrogation of a claim or lien. Any discounted or negotiated rates or payment arrangements, any price adjustment, or refunds, and any retroactive or supplemental payments or credits negotiated with regard to covered services received by SHBP members must be remitted to the Commission. (Administrative) fees must take into consideration this provision,” according to the contract. 

And, if the state believes there is a problem with the payments, it can audit at any time. 

“(Insurers) must cooperate in the administration of routine audits performed by the Commission or its designee, on various aspects of the administration of the Plan, including but not limited to claims processing, medical management and enrollment data.  The various audits are designed to ensure (1) contract compliance, (2) that the interface system is working properly, (3) proper payment of claims where the individual should have coverage or (4) proper rejection of claims where the individual’s coverage has terminated, and (5) correct allocation of claims according to SHBP experience groups and (6) efficient and effective medical management,” the contract said. 

“An audit may be conducted if the Commission has a reasonable and good faith belief that a situation exists that will result in harm to the Plan. Audits must encompass records held by any subcontractor or related organization and held by any entity that is a member of the contractor group of companies.” 

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AVYM co-founders Mark Flores and Vincent Flores told ROI-NJ that the organization specializes in helping providers navigate claims and has seen a number of questionable practices since its inception in 1999. 

The white paper looked at claims from a Sparta school employee’s surgery and suggested that the provider was only paid 50 percent of the amount originally claimed, and the remainder was pocketed by the insurer. 

“Based on court cases (cited in the paper), it seems apparent TPAs can and do hide ‘undisclosed’ administrative compensation fees within medical claims payments. These undisclosed fees, which can account for 30 to 60 percent of a plan sponsor’s health claims expenditures, are usually siphoned into the TPA variance account through ‘retention reallocations’ and ‘cross plan overpayment’ offsets, among other techniques. Based on industry estimates and national claims processing standards, we believe the New Jersey State Health Benefits Plan and the School Employees’ Health Benefits Plan can realize a $1 billion (per) year reduction in expenditures by rigorous monitoring of TPA practices,” the AVYM report said. 

Mark Flores said that the actions of the TPA occur in a black box and are not visible to the state. “The big issue is that there’s no way to confirm whether or not the doctor is receiving the amount the (state) is paying the TPA for the claim,” he said. And that could save the state at least 30 percent of its current medical claims expenditures. 

Sarlo said one of the reasons he is pursuing the matter is the insurers’ response to transparency legislation. 

“When I had in my bill, when I had transparency disclosure to follow the money on these claims, which include TPAs out to providers, they opposed that bill,” Sarlo said. “Aetna, Horizon and all the health insurers opposed that bill.” 

Sarlo hopes the answers from Muoio will result in, at the very least, changing language for the new contract with the insurers. 

“Greater transparency on the operations of these third-party administrators will help identify cost savings that should be passed on to the state,” Sarlo said in a statement accompanying the letter. “There needs to be an accounting of the savings that insurance companies retain as fees and commissions.  

“We must ensure that the majority of these savings flow to the state as they should. Every year, doctors and other health care providers complain of decreasing reimbursements. At the same time, health care consumers complain of rising premiums and increasing costs. The obvious question that needs to be asked is: Where is all the money going?” 

Sarlo told ROI-NJ he realizes the answer won’t be a cure-all for the state, but it’s one worth getting. 

“I’m not saying this is going to save the budget at the end of the day,” he said. “But it’s worth a look. 

“This is serious dollars. The state of New Jersey is paying $37,000 per employee. If we can find savings in those health care plans, we must do it.” 

$24 Billion Solution to High Deductible Health Plans.

Educating patients on HSA’s my not only be the right thing to do, it may also make very good business sense. The latest reports and surveys show an increase in the total number of HSA’s and an increase in the average balance ($2300). How much of the $24 Billion in medical savings/reimbursement account assets is your practice collecting?

In today’s environment of higher health insurance deductibles, increasing out-of-pocket costs and shrinking provider networks why aren’t more medical providers taking advantage of Health Savings Accounts (HSA’s)?  According to the latest reports, medical savings/reimbursement account asset balances nationwide are in the $24 Billion range. Yes, that’s Billion with a “B”!

The trends also show that HSA’s are outpacing health reimbursement arrangements (HRA’s). A health savings account or HSA, is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. Only consumers with on a high-deductible health insurance plan can qualify for HSA’s. Consumers don’t have to set up their HSA’s with their employer; they can also set them up individually. Contributions to HSA’s may be made on a tax exempt basis and can also be made by an employer.

Any contributions made to the account stay in the account until you use them. Contrary to popular belief, with HSA’s if you “Don’t Use it-You Don’t Lose it”, even if you change jobs. While interest and other earnings in the accounts are tax free, distributions may only be tax free when used for “Qualified Medical Expenses”.

For IRS information on HSA’s, Qualified Medical Expenses and contribution limits, click HERE.

Every practice should advocate for patient’s affordable care and have HSA programs and policies in place. On Jan 10, 2015, Avym Corporation announced its 2015 HSA & PPACA Claim Specialist Programs to train both in-network and out-of-network healthcare providers on: (1) PPACA internal and external appeal laws, (2) the latest health claim overpayment ERISA laws and (3) how to get paid with $24 billion in patient HSA’s in 2015.

The two-day basic PPACA HSA Claim Specialist Program was designed to get providers paid even in the face of High Deductible Health Plans (HDHP). With HSA assets estimated to be over $24 Billion in 2015 and as high as $40 Billion by the end of 2016, the one-day basic PPACA-HSA Claim Specialist program is designed to comply with new federal laws in 2015.

The eight-day advanced Certified PPACA & ERISA Claim Specialist programs were designed to comply with 2015 full implementation of PPACA Claims regulations for both internal and external appeals for all claims denials, and especially for sky-rocketing payer overpayment claims and newly approved claim withholding or offsetting denials, in accordance with the latest Court rulings and DOL legal guidance on the increasing overpayment or repayment disputes.

Fast Facts on HSA’s:

1. Medical savings and reimbursement asset levels are growing-Assets grew to approximately $23.8 billion in 2013-up from $18 billion in 2012
2. Account balances increased-Average HSA account balance increased to $2311 in 2013-up from a little over $1400 in 2008
3. Length of time patients have with HSA account has impact-—Not surprisingly, the length of time that an individual has had an account has a major impact on the amount of money in the account.
4. Experts estimate HSA assets to be around $40 Billion by the end of 2016
5. HSA’s can pay for transportation expenses-In cases of emergency, HSA funds can be used to pay ambulance bills; also people with mobility issues can use HSA funds to pay for taxi or shuttle services to and from medical facilities.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support services.

To sign up for our newsletter and become an Avym Insider please click here.

Court of Appeals Docket #: 10-20868, United States Court of Appeals for the 5th Circuit, Filed on 10/05/2012

Access Mediquip, L.L.C. v. UnitedHealth Group, Inc., et al, Court of Appeals-En Banc Decision

On October 5, 201, the Federal Court of Appeals for the Fifth Circuit ruled against UnitedHealthcare (UHC) in a landmark ERISA case with wide-ranging implications regarding the scope of ERISA pre-emption in the context of medical-provider claims. 

According to the en banc decision, Access Mediquip, L.L.C. v. UnitedHealth Group, Inc., et al, against UHC: ERISA does not preempt a service provider’s state law claims against an ERISA plan’s insurer for negligent misrepresentation, promissory estoppel, and violations under the Texas Insurance Code.  Federal ERISA Law protects healthcare providers.  Providers can seek new remedies and expand the scope of liabilities for health plans.

“In order to successfully appeal and litigate adverse benefit denial decisions, healthcare providers and their attorneys must be educated on the implications of ERISA preemption in order to prevail in ERISA claims and state law claims,” said Vincent Flores, President and Co-Founder of Avym Corporation (Avym) and national expert on PPACA and ERISA appeals and compliance.  Avym offers webinars to discuss the profound impact of this landmark court decision for healthcare providers.

This decision will have far-reaching effects not only in the Fifth Circuit, but also in courts across the country.  It dramatically changes the landscape for all healthcare providers, health plans, insurers and defense attorneys that have strategically used ERISA pre-emption against healthcare provider claims for decades.

“ERISA preemption has been the No. 1 defense by the healthcare insurance industry for more than 95% of healthcare claims in the past 37 years,” said Dr. Zhou, President of ERISAclaim.com, a national expert on PPACA and ERISA appeals and compliance.

Nearly all healthcare and managed care cases appealed to the Supreme Court over the last 30 years have been denied based on ERISA pre-emption.

Health care providers typically rely on insurer representations when planning or carrying out treatment for patients.  Therefore, the risk of loss should reasonably be imposed on the entity making the inaccurate representation.  In the absence of shared risk with the entity that makes an inaccurate representation, providers must prioritize the economic viability rather than the medical needs of the patient in order to ensure they get paid for their services.

According to the Fifth Circuit en banc decision:

“The court took en banc this case, which raises questions about the scope of liability of an ERISA plan administrator and fiduciary for allegedly misrepresenting a plan beneficiary’s coverage in its advice to a provider of health devices.”

Without any detailed explanation, the Court made a very short en banc decision:

“Having reconsidered this case en banc, we reinstate the panel opinion and overrule, to the extent inconsistent with its reasoning, the court’s opinions in Cypress Fairbanks, Hermann I and Hermann II.

The judgment of the district court is REVERSED and the case REMANDED for further proceedings consistent herewith.”

A summary of the case, which embodies typical problems faced by providers in their daily routine, is provided below by the DOL Access Mediquip Amicus Brief:

STATEMENT OF THE CASE

Plaintiff, Access Mediquip, LLC (“Access”), supplies medical devices to healthcare providers. Am. Compl. at ¶ 14. Typically, providers ask Access to furnish a medical device before the procedure is done. Id. Rather than selling the device to the provider, Access contacts the patient’s insurer to confirm that the insurer will reimburse Access for the device and pay for Access’s services. Id. at ¶ 19.  Access generally refuses to procure or finance a device, if the insurer tells Access that the patient is not covered. Id. at ¶ 58.

    In this case, Access sued defendant-insurer, UnitedHealthcare Insurance Company (“United”), with respect to alleged misrepresentations concerning coverage and payment for Access devices for over two thousand patients covered by numerous health care plans.  Access, Mediquip L.L.C. v. UnitedHealthcare Ins. Co., 662 F.3d 376, 377 (5th Cir. 2011) (panel decision). The district court limited the Summary Judgment Motions to three “test” cases that would serve as examples. Id. at 378.

    In each of these test cases, the patients obtained United’s health insurance through participation in an ERISA health plan benefit. Access Mediquip L.L.C. v. UnitedHealth Group Inc., Case No. H–09–2965, 2010 WL 3909544, at *1 (S.D. Tex. Oct. 4, 2010) (district court decision). The facts of these cases are similar: a hospital asked Access to procure or finance a medical device for an operation. Id. When Access contacted United, a representative assured Access that the patient was covered and authorized Access to bill United directly for the device. Id. After Access provided the device for the procedure, United concluded that the applicable ERISA plan did not cover the procedure requiring the device and thus refused to fully pay for the device. Id. at *1-*3.”

The DOL goes on to opine:

“as several circuits have recognized, preempting the service provider’s claims against the plan’s insurer in these circumstances would likely harm participants and beneficiaries, and thus undermine ERISA’s purposes. “[P]reemption of a third-party provider’s independent state law claims would discourage health care providers from treating patients without first evaluating the solvency of each patient or requiring patients to pay in advance the cost of their medical services.” In Home Health, 101 F.3d at 606-07; accord The Meadows, 47 F.3d at 1011; Mem’l Hosp., 904 F.2d at 247; see St. Joseph’s Hosp., 742 P.2d at 313 (citing testimony from a hospital employee). Without any legal remedies, “health care providers can no longer rely as freely [on representations of health care coverage] and must either deny care or raise fees to protect themselves against the risk of noncoverage. . . . [T]he employees whom Congress sought to protect would find medical treatment more difficult to obtain.” Lordmann, 32 F.3d at 1533. Thus, the panel decision is consonant not only with the law of ERISA preemption as set forth by the Supreme Court, other courts in analogous circumstances, and the best-reasoned decisions of this Court, but with ERISA’s policy goals in general and its preemption provision in particular.”

CONCLUSION

    For the reasons set forth above, the Secretary requests the en banc Court to adopt the panel decision’s reasoning and holding regarding the non-preemption of the plaintiff’s state law claims for promissory estoppel, negligent misrepresentation, and violations of the Texas Insurance Code.”

The fifth circuit en banc decision can be found here

The fifth circuit panel decision can be found here

DOL Access Mediquip Amicus Brief, in support of plaintiff-appellant can be found here

To find out more about PPACA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.

CA State officials allege in court papers that Dr. Martello aggressively collected or attempted to collect more from patients than insurance companies paid, a practice known as balance billing.  According to the article, the underlying issue is familiar: many physicians don’t believe they are getting paid enough for their services.  Doctors bill insurance firms and frequently get a fraction of their full fees.

Martello’s attorney, Andrew Selesnick, acknowledged his client was “very persistent” about collecting bills but said she was lawfully pursuing her rights to recoup fees for her services. http://www.latimes.com/news/local/la-me-southpas-doctor-20120818,0,6165119,full.story

At the same time, AETNA has filed multiple lawsuits against various providers for allegedly NOT collecting patient’s out of pocket costs.  “Feb. 3 (Bloomberg) — Aetna Inc. is suing seven California surgery centers for a billing system that it claims “recklessly subverts” health care delivery.

“The lawsuit seeks to stop the centers from waiving the co-insurance payments people are supposed to be charged when they use doctors or facilities that don’t have contracts with their insurers according to the suit.”

The court case info: Aetna Life Insurance Co. v. Bay Area Surgical Management LLC, File 02/02/2012, Case #: 112CV217943, The Superior Court of California, County of Santa Clara.

It seems providers have been put in a very precarious position.   Selesnick argued that the state’s case against his client underscores a larger problem: no one wants to pay for medical services. “Dr. Martello is definitely passionate about being a physician,” he said. “She is equally as passionate about getting paid for the work that she did.”

In Aetna’s complaint, they allege that the providers participated in a “scheme” to “induce (Aetna’s) members to use a defendant facility’s out-of-network services, the defendant waives the patient member’s coinsurance and otherwise relieves the members from obligation to pay their charges. “

Aetna’s complaint further alleges that “By illegally striking at the very financial core of (Aetna’s) managed care network, their scheme also recklessly subverts and imperils (Aetna’s)  well-structured and successfully functioning managed care network made up of subscribers, medical care providers and medical facilities, which has heretofore served as a proven process for delivering excellent, affordable healthcare to citizens of California.”

On one hand you have carriers demanding providers collect all patient out-of-pocket costs or risk getting sued.  On the other hand when providers attempt to collect patient’s out-of-pocket costs that are legally owed to them, they are sued by the state.

Ultimately, patients and providers suffer by this process which undermines all Dr-Patient relationships.  Nancy Hauser, whose teenage daughter was treated by Dr. Martello, in CA, at Huntington Hospital in 2009 after falling at a friend’s house and cutting her head, said she was still dealing with the financial fallout of the physician’s billing practices.  “You go to a doctor with an understanding that the person has your interests at heart,” Hauser said.

It is essential for all providers to understand the rules and regulations that govern these issues.  Implementing compliant policies and procedures can go a long way in prevention.

On July 16, 2012, California Department of Managed Health Care ordered Anthem Blue Cross to stop trying to collect millions in reimbursement from providers for medical claims the health plan thinks were overpaid.

Avym announces free executive webinars designed to examine the California Department of Managed Health Care’s order and discuss the profound impact of the entire overpayment recoupment market, estimated to be in the billions of dollars.

State regulators ordered Anthem Blue Cross on July, 16 2012 to stop trying to collect millions in reimbursement from providers for medical claims the health plan alleges were overpaid.

California State law allows health plans to seek reimbursement for overpaid medical claims within a year of the payment date. In order for a plan to collect on claims more than a year old, it must demonstrate fraud or misrepresentation by the provider.

Earlier this year, the California Department of Managed Health Care (DMHC) investigated collection attempts by Anthem Blue Cross between 2008 and 2011 and found the plan tried to collect overpayments from at least 535 providers for claims that were more than a year old. Anthem did not provide evidence of fraud or misrepresentation, the agency said in a news release Monday.

The plan alleged providers had improperly coded the claims using upcoding, unbundling or miscoding procedures, the cease-and-desist order shows.

Anthem, which is based in Thousand Oaks, CA, tried to collect payments from another 13 providers who allegedly had billed for services they had not rendered.

“Health care providers should not face unexpected demands for reimbursement of medical claims they believe were appropriately paid years ago,” agency director Brent Barnhart said in the release. “Anthem’s recoupment practices violate California law and are unfair to providers who are acting in good faith.”

Anthem spokesman Darrel Ng stressed in a prepared statement that the issue does not involve patient care or safety: “The issue is about Anthem Blue Cross’s efforts to keep health care affordable,” he said. “Anthem Blue Cross believes medical providers should be compensated for services provided, but should not receive payment twice for the same procedure.”

According to Mr. Ng, Anthem sought reimbursement for overpayments due to double billing which is consistent with guidelines from the American Medical Association.  “We will closely examine today’s action by DMHC and are considering our options,” he said.

Many providers are still trying to figure out what to do in light of the DMHC’s order.  The California Medical Association (CMA), which made the initial request to the DMHC to investigate, issued a press release urging the DMHC to take further action, including imposing heavy fines to deter future abuses. CMA is also asking DMHC to require Anthem refund to physicians any overpayments collected in violation of the law.

No decision has been made about whether the collected alleged overpayments will have repaid, but DHMC offered this advice: If a provider receives (or has received) a notice from Anthem (or any plan) requesting recoupment of alleged overpayments from claims older than one year, they should first file an appeal with the plan. If the appeal is unsuccessful, the plan is non-responsive or they are unsatisfied with the response, the provider should file a complaint with the DMHC Provider Complaint unit at: http://www.dmhc.ca.gov/providers/clm/clm_comp.aspx

This comes on the heels of Anthem’s recent troubles with the CA DMHC.  In January of 2012, Anthem was ordered pay doctors and hospitals money owed for services going back to 2007.  The action is a result of Anthem’s refusal to remediate providers following a financial claims audit that identified errors in payment of medical claims

This is in addition to a lawsuit, intended to be a class action, filed by consumer advocate group Consumer Watchdog.  the complaint challenges alleged “bait and switch” tactics affecting more than 100,000 individual plan members hit by deductible increases and other changes in May. It also targets other changes that allow Blue Cross to alter terms of health plan contracts several times in a year, with 60 days’ notice.

What does this mean to overpayment request by payors?  AVYM offers free webinars that will examine the importance of appealing overpayment requests, including an analysis of the GAO Report findings “When denied reimbursement by an insurance company, one of the biggest mistakes made is not appealing the decision. When denied reimbursement for services you have the right to appeal and the Insurance Company/Plan Administrator is required to explain why they denied the claim. Doing so often pays off, with an estimated 59 percent of appeals being decided in favor of the claimant.”

Avym webinars will:

• Focus on the number one healthcare dispute right now in the U.S. against health plans, providers and patients as well as the relevance of recent US Supreme Court decisions and their effects on claims denials, audits, and litigation of claim disputes. 77% of insured Americans under employer sponsored health plans are affected by these issues;
• Analyze the new federal health reform law, PPACA claim regulations, which have adopted ERISA law as the minimum claim regulations standard for all health plans which now includes individual market claims outside of Medicare;
• Analyze and discuss ERISA claim regulation which, for the last 36 years, has provided very specific provisions regulating the “circumstances which may result in disqualification, ineligibility, or denial or loss of benefits”;

To find out more about ERISA/PPACA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.

On June 12, 2012, According to a unit of UnitedHealth Group Inc., (NYSE: UNH) it will “will stick with some of the patient relationship requirements set by the federal Patient Protection and Affordable Care Act of 2010 (PPACA) no matter what the U.S. Supreme Court concludes about the constitutionality of the law.”

“UnitedHealthcare also will continue to follow the new appeals process standards”.

The Patient Protection and Affordable Care Act (PPACA) was signed into law by President Obama on March 23, 2010.  PPACA claims regulations will govern all claims processing, reimbursement, denials and appeals for almost all healthcare claims outside Medicare: ERISA claims and non-ERISA claims as well as all individual policies.  PPACA claims regulations adopted ERISA claims regulation in its entirety as PPACA internal appeals process, and adopted NAIC’s external model as PPACA external appeals process.

If a health plan fails to strictly adhere to all requirements of the new federal appeals regulations, claimants who appeal have immediate and powerful protections and remedies which include expedited external appeals, continued coverage and Lawsuits (including possible monetary damages).  These regulations set forth six new requirements in addition to those in the DOL claims procedure regulation:

• Clarification of meaning of adverse benefit determination
• Expedited notification of benefit determinations involving urgent care
• Full and fair review
• Avoiding conflicts of interest
• Notice (New EOB Standards)
• Deemed exhaustion of internal claims and appeals processes.

According to a White House Press Examiner release, among the provisions that UnitedHealth will continue to promote are  “Providing Clear and Timely Options for Appeals-UnitedHealthcare will continue to ensure that consumers are offered a simple, accessible external appeals channel and a process that is clear and timely. The company will give consumers notice of available appeals processes and the opportunity to review their files and present evidence as part of the appeals process.”

UnitedHealth President, Stephen Hemsley, stated that “that the company is voluntarily agreeing to keep the standards because the standards promote access to quality care and can help control health care costs.”

(http://www.examiner.com/article/unitedhealthcare-will-offer-obamacare-regardless-of-the-us-supreme-court-ruling)

On June 13, 2012, Humana Inc. (NYSE: HUM) announced that it will also maintain important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in the case pending before the Court. Humana is the second major health insurance provider to authenticate The Patient Protection and Affordable Care Act (PPACA).

Among the PPACA provisions Humana will continue to enforce are ERISA PPACA appeals rules: “Humana will continue to provide a clear and simple process for appealing claims decisions, as well as the option for health plan members to have their cases reviewed by independent review organizations. Humana believes in providing a clear, timely and accessible avenue for health plan members to appeal and resolve disagreements.”

(http://www.examiner.com/article/humana-will-also-offer-obamacare-regardless-of-the-us-supreme-court-ruling)

On June 14, 2012, AETNA joined UnitedHealth and Humana in pledging to keep key elements of the PPACA.  Even as more companies are expected to follow suit, the three companies pledge that regardless of how the U.S. Supreme Court rules in the case currently pending before the Court, major provisions will remain part of the coverage.

According to the latest White House Press Examiner release, among the specific provisions that will be extended by UnitedHealthcare, Humana, and Aetna is the provision that provides clear (and timely) options for appeal.

(http://www.examiner.com/article/aetna-joins-unitedhealthcare-and-humana-pledge-to-keep-portions-of-obamacare)

In spite of the fact that the U.S. Supreme Court is expected to rule shortly about the constitutionality of the act, more healthcare insurance providers, in addition to the three already announced, are expected to follow suit and adopt the same major portions of the law.

AVYM offers free webinars that will examine the importance of appealing denied claims, including an analysis of the GAO report findings “When denied reimbursement by an insurance company, one of the biggest mistakes made is not appealing the decision. When denied reimbursement for services you have the right to appeal and the Insurance Company/Plan Administrator is required to explain why they denied the claim. Doing so often pays off, with an estimated 59 percent of appeals being decided in favor of the claimant.”

Avym webinars will:

• Focus on the number one healthcare dispute right now in the U.S. against health plans, providers and patients as well as the relevance of recent US Supreme Court decisions and their effects on claims denials, audits, and litigation of claim disputes. 77% of insured Americans under employer sponsored health plans are affected by these issues;

• Analyze the new federal health reform law, PPACA claim regulations, which have adopted ERISA law as the minimum claim regulations standard for all health plans which now includes individual market claims outside of Medicare;
• Analyze and discuss ERISA claim regulation which, for the last 36 years, has provided very specific provisions regulating the “circumstances which may result in disqualification, ineligibility, or denial or loss of benefits”;

To find out more about ERISA/PPACA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.