Medical Billing Forum

Payments => Insurance Payments => Topic started by: djaeger on January 30, 2010, 12:48:21 PM

Title: retro denial question
Post by: djaeger on January 30, 2010, 12:48:21 PM
Hi everyone.  I am new to this board and new to billing.  We called for approval for pt to have thyroidectomy.  Approval given, doc performed surgery, claim paid.  Later.....told that ins co wants their money back because the patient's employer had quit paying the premiums on the policy, and in fact, patient was NOT covered during the time of the surgery.  (Ins. canceled 7/1/09, we called to verify 7/16, surgery performed 7/21).   Do we have any recourse at all in this case?  Doesn't seem fair that doc has to suck this up.  How can you protect yourself in the future from this happening?  Any ideas?
Thanks in advance!!!!
Title: Re: retro denial question
Post by: Pay_My_Claims on January 30, 2010, 06:33:59 PM
well its one of those things that happens, they tell you "authorizations isn't a guarantee of payment" If the client isn't covered.....he has to pay
Title: Re: retro denial question
Post by: Michele on January 31, 2010, 12:40:06 PM
I'm afraid Charlene's right.  Prior approval is not a guarantee of benefits.  But in this case, the patient should go after their employer.  Bottom line it is the patient's problem.  The dr doesn't need to eat it, the patient has to pay.

Title: Re: retro denial question
Post by: PMRNC on February 03, 2010, 08:25:06 PM
I concur, if a plan's premium is not paid, they are given a grace period. When underwriting cancels, claims paid in error are automatically "rescinded" because technically the patient did not have coverage.
Title: Re: retro denial question
Post by: oneround on February 03, 2010, 09:03:20 PM
Correct me if I'm wrong ladies but in CA. our providers are protected by AB1324.  If a Health plan Auth it, they pay it, as long as the provider determined eligibilty and provided services in good faith upon that Auth.  The payer. at least here,  cannot go after the MD but can go after the policy holder, who in turn should go after their employer.  I have heard that other states have adopted that bill also.  May want to check your state AB's.  Does not hurt to try, you may have one or you may not.  I can say that when I was in claims when we encountered similar scenarios we had to foot the bill up until the auth date ended.  I can check with my legal department on this particular case.  Becausue I remember many mettings with the payors, our UM department and legal on this.  Here is a little blip f that bill

          SUBJECT  :   Health care coverage: rescinded coverage.

           SUMMARY  :   Clarifies and makes specific provisions of law that  
          currently prohibit health care service plans (health plans) and  
          disability insurers selling health insurance (health insurers),  
          where the plan or insurer authorizes a specific type of  
          treatment by a health care provider, from rescinding or  
          modifying the authorization after the provider renders the  
          health care service in good faith and pursuant to the  
          authorization.  Specifically,  this bill  :  

          1)Clarifies that a provider has rendered health care services in  
            good faith when the plan or insurer has authorized services by  
            verifying eligibility of a member or policyholder, or  
            otherwise communicating that the member is covered under the  
            plan contract or insurance policy, or, in the case where the  
            member's plan contract or policy requires preapproval, the  
            provider has obtained the preapproval.

          2)Clarifies that a health plan or insurer does not avoid its  
            obligations related to the existing prohibition against  
            rescinding or modifying an authorization for treatment by  
            rescinding or modifying the contract of the enrollee or  

          3)Finds and declares that the changes in this bill do not  
            constitute a change in, but are declaratory of existing law.

           EXISTING LAW  :

          1)Provides for regulation of health care service plans by the  
            Department of Managed Health Care (DMHC) under the Knox-Keene  
            Health Care Service Plan Act of 1975 (Knox-Keene) and for  
            regulation of disability insurers who sell health insurance  
            (health insurers) by the California Department of Insurance  
            (CDI) under the Insurance Code.

          2)Prohibits health plans and health insurers, where the plan or  
            insurer authorizes a specific type of treatment by a health  

                                                                  AB 1324
                                                                  Page  2

            care provider, from rescinding or modifying the authorization  
            after the provider renders the health care service in good  
            faith and pursuant to the authorization.

          3)Prohibits health plans and insurers from engaging in  
            "post-claims underwriting" defined as rescinding, canceling,  
            or limiting of a plan contract due to a plan or insurer's  
            failure to complete medical underwriting and resolve all  
            reasonable questions arising from written information  
            submitted on or with an application before issuing the plan  
            contract or policy.  For health plans regulated by DMHC,  
            provides that the prohibition against post-claims underwriting  
            does not limit a plan's remedies upon a showing of willful  

          4)Requires applications for health plan contracts or health  
            insurance policies to conform to certain standards for  
            underwriting, including clear and unambiguous questions when  
            health-related questions are used to ascertain an applicant's  

           FISCAL EFFECT  :   None

           COMMENTS  :  

           1)PURPOSE OF THIS BILL  .  According to the author, this bill is  
            necessary because even though existing law explicitly  
            prohibits plans and insurers from refusing to pay providers in  
            the event of retroactive rescission of coverage, health plans  
            and insurers aggressively continue to skirt the legislative  
            intent.  The author argues that this bill will reaffirm that  
            authorization includes verification of eligibility, thereby  
            ensuring that once a treatment is authorized plans and  
            insurers will have no incentive to save money by canceling or
Title: Re: retro denial question
Post by: PMRNC on February 13, 2010, 12:23:07 PM
No.. this is a different topic. There is a difference between RECISSION and Cancellation. Also the plan could have been an ERISA policy.. we don't know.
If you read this paragraph again, you will see that those above regs are there to protect those who's coverage is recinded due to errors on application for coverage (EOI)

"post-claims underwriting" defined as rescinding, canceling, 
            or limiting of a plan contract due to a plan or insurer's 
            failure to complete medical underwriting and resolve all 
            reasonable questions arising from written information 
            submitted on or with an application before issuing the plan 
            contract or policy
  For health plans regulated by DMHC, 
            provides that the prohibition against post-claims underwriting 
            does not limit a plan's remedies upon a showing of willful 

In regards to coverage cancellation.. if it was a premium issue (cobra, etc) Underwriting applies the grace period..when the grace period is past, if claims were submitted they were paid..they have a right to go back and request payment refunds. It is IMPOSSIBLE for underwriting to determine a plan cancellation during the grace period unless the employer actually cancels, if they are just not sending in premium, Underwriting can only apply grace period and wait to see if the check is received. I worked for an insurance company and for the state of California, any examiner who process claims in the state of California has to be certified to process california claims so we had to know their laws specifically in order to process claims. This issue came up all the time due to the verbiage those regs were meant to protect those innocent application omissions or errors for EOI (Evidence of Insurability) they were not meant to be protective of non payment of premium. The issue for the patient in question should be with the employer (labor laws, etc) NOT the insurance company.