There is little more infuriating for a physician than to have provided services, in good faith, billed the patient’s insurance company, and gotten paid for those services to now receive a letter claiming that the payment was in error, and demanding its return. The physician is left to chase the patient or swallow the loss. And these letters come out of the blue and may come months, even years after services were rendered and paid.
If you are practicing in New York, or in any state with regulatory protections there is an end to this madness. In New York physician rights when it comes to insurance companies and HMOs can be found In Insurance law section 3217-b, 3224-a, 4325, 4803 and Public Health law sections 4403, 4406-c, and 4406-d.
When it comes to those recovery demands, the first thing to look at is the date of payment you received on the claim. The regulations prohibit recoveries more than 24 months after the date you received payment.
This is important to know because as an executive of United once said when challenged why they were sending letters seeking recoveries that were older than 24 months, “Just because we can’t offset the claims, does not mean that we cannot ask for the money back. Physicians are expected to know their contract and the regulations”. In other words, there is nothing that stops a payer form asking for the money back, and if you do not know this regulation, you or your staff may be intimidated by the official-sounding letter into dashing off a payment to the insurer.
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In addition, these official letters even when within the recovery window, cannot be mysterious. Under NYS regulation, other than the recovery of duplicative payments, HMOs and insurance companies must give physician 30 days’ notice before engaging in overpayment recovery efforts – like off-setting current claims for the alleged overpayment. And the letters must include the patient’s name, service date, payment amount, the proposed adjustment, and a reasonably specific explanation of the proposed adjustment. If the recovery demand does not include the foregoing, send back their letter with a cover letter that says that you dispute this recovery pending the receipt of information consistent with NYS regulations. And if they press on without responding, send their letter as a complaint to the NYS Department of Financial Services (NYS Insurance Department) or the applicable state regulatory agency.
This will not only get the regulators to ask the plan to explain but will cost the plan money to respond to the regulators, always a good thing.
Now most letters will be about another payer being primary. Don’t fight it, just bill the primary insurance company, which they should be identifying, and send back to the requesting plan a letter that you have billed the alleged primary and will repay them when and if the alleged primary makes payment. When that insurer pays, refund the requesting company. If they deny, just send the requestor a copay of the denial, with a note that they are responsible. (It's not your job to debate insurance coverage).
If the recovery demand is for any other reason, check out their reasoning. If they are right, then refund, if they are questionable, or you can’t determine from their letter, send back a letter saying you dispute their request until you see…..whatever information you need to confirm the correctness of their representation.
One little problem with all of the above is that it does not apply to governmental programs, or to self-insured plans. However, you will not readily know if the recovery is on behalf of a self-insured plan, so follow the same guidance. Even if you end up owing the money, better to make the plan work for the money, rather than readily surrender your earned dollars.
