In part 1 of this article (Oct. 7 issue), I gave specific advice on how to handle the increasingly popular pest known as the "refund request." In short, you may have the law on your side if a payer does not request funds back in a timely manner or for adequate reason. My suggestion in that previous article was to research the issue thoroughly before you write the check refunding your hard-earned money, and to appeal or deny the request if appropriate.
Many readers responded positively to my suggestions, but the most common question I received was: "What do you do when the insurance company simply ignores your appeal and takes the overpayment out of future reimbursements?" Here's what you can do.
Preventing Payment Offsets
Payment "offsets" (that is, an insurance payer taking the money you refuse to refund out of your future reimbursements) are another common problem we face as providers and are certainly no less frustrating than the fact that payers attempt to inappropriately recoup funds in the first place. In a perfect world, the simplest way to prevent payment offsets would be to inform the payer that it cannot do this.
Unfortunately, the current health care marketplace is not so black and white. In some cases and in some states under some circumstances, this approach will work. In others, it is not so easy. I certainly can't go into great detail on the particulars of each state and its respective laws, but here is some general background about this issue that can increase the odds that you navigate these complex waters successfully.
Timing Is Critical
The first step in winning the battle of refund requests is to determine your state's prompt payment laws. A time limit is critical for two reasons: 1) If an insurer has gone beyond its legal time limit for requesting the repayment, you may not have to legally repay the money back; and 2) In many states, the carrier cannot recoup the refund by offsetting current reimbursements until your time to appeal the refund expires.
Let's deal with these two issues separately. First, in most states, there are recoupment laws that prohibit a payer from seeking a refund beyond a certain time period. For example, if your state law dictates that the payer can seek a refund on claims up to 18 months prior (determined by the date of service), then a refund request for a claim from three years ago is inappropriate and should be appealed. Similarly, most states also require that the payer inform you in writing of an attempt to request a refund via a separate notice clearly identifying the claim, the name of the patient, the date of service and including a clear explanation of the basis upon which the plan believes the amount paid on the claim was in excess of the amount due.
The second level of protection you may have access to is in regards to time limits you have to wage your appeal to deny the refund request. This step is critical to halting "automatic recoupments" or the payer's attempt to get your refund by offsetting future payments. For example, if your state has a prompt payment law that forbids "automatic recoupments" within 45 days of a written refund request, then you have 45 days to notify the payer of your appeal. Notification does not mean that you will win your appeal, but it does mean the payer cannot legally take the refund out of future reimbursements until the dispute is settled.
On the other hand, if you fail to notify the payer of your appeal (which you should do in writing, via certified mail), then the payer may legally engage its system of "automatic recoupments" and take the refund from current payments.
Depending on the type of insurer, you may have additional rights in regards to timeliness or how the recoupment can be made via ERISA or through your state, but the timely appeal is the first step to preventing the insurance company from automatically offsetting the refund in future payments.
Understanding the Refund Process
The next step in thwarting a payer's attempt to inappropriately take your money back requires you to understand the "process" that many insurance companies have in place for refunds. If you are a provider, a copy of your contract should give you the details of how you must handle the appeals process and how overpayment requests need to be handled.
The key item to note in this step is that most payers have a clearly identifiable process for handling claim and reimbursement disputes. If you fail to follow their guidelines correctly, most insurance companies simply withhold or deduct such "overpayment" from subsequent benefit reimbursements, asserting that overpayment is non-disputed and that the provider agreement provision has authorized the withholding of such non-disputed overpayments.
In other words, because you failed to follow the payer's rules, you have waived your right to dispute the refund request and granted the payer the ability to recoup the money from future claims.
Know and Fight for Your Rights
As I mentioned in part 1, chiropractors are not alone in this battle. The AMA's Council on Medical Services reported in December 2000 that more than 40 percent of physicians are facing repayment demands on a regular basis and estimate that one-tenth of all claims are denied retrospectively. At this point, our best defense is to understand our legal rights, know our contractual obligations and be willing to fight payers who inappropriately demand refunds.
If you are unaware of the recoupment laws, I will gladly provide you with a list of state regulations regarding recoupments so that you can prepare yourself for battle, if necessary. Just send me an e-mail at info@strategicdc.com, noting that you read this article in Dynamic Chiropractic, and I will be glad to provide you with this list.
Finally, I am not naive enough to believe that you will win every case and prevent every dollar from being refunded to a payer. But if you notice a pattern of inappropriate demands or violation of your state statutes from a particular payer, I strongly encourage you to inform your state and national chiropractic associations, as well as your insurance commissioner. In cases of flagrant or widespread abuse, we are too small to win the battles alone, but by banding together we can achieve victory!
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