Practice Management Alert

If your practice is receiving demands for refunds on claims that are years old, paying them with no questions asked will only reduce your bottom line. Instead, experts say, protect your revenues and fight back by refusing to pay. Use your contract language or state laws on claim-filing timeliness to set your own guidelines regarding how long after reimbursement is received you'll accept a refund request.

Like other physician groups across the country, late last year Piedmont HealthCare P.A., a 76-physician group in Statesville, N.C., began receiving recoupment letters from claim-review companies acting on behalf of insurers. The letters requested refunds on 2- to 4-year-old claims, and either denied the original claim outright, or maintained the group was overpaid, says Lloyd E. Matson, its chief executive officer. Piedmont HealthCare has received nearly 100 such refund requests from two commercial indemnity insurers that do not have contracts with the group, he says.

"When we first started receiving these letters, we were floored. We'd never seen this before, and we didn't know what to do. Thinking maybe we did something wrong, we started going back and looking at the claims to see why they were asking for repayments," Matson explains. Retrieving old payment information from the group's computer system, searching a storage room of file cabinets for old explanation of benefit (EOB) forms from the particular carriers, and examining the medical records of the patients for whom the claims were filed took a lot of staff time and effort, and produced no evidence of errors by the group's coders or billers.
What To Say When Refusing To Pay
After consulting its attorney, Piedmont HealthCare decided to reply in writing to requests for refunds from the noncontracted insurers. The response, which could be used as a guide by other practices, included the following three points:
Noncontracted Provider. In one case, an insurance company claimed the refund was due according to their "standard claims-payment policies." Piedmont HealthCare's response letter argues: We contend that no refunds are due. As noncontracted providers, we are not contractually bound to abide by [the insurance company's] "standard claims-payment policies" in determining what amounts due are to be reimbursed.
Correctly Coded Claims. The refusal-to-pay letter continues: A review of the above-referenced audit information indicates that the procedure codes we billed were codes that were included and defined in the applicable year's American Medical Association's (AMA) Current Procedural Terminology (CPT4) manual. The codes billed describe the treatment and healthcare services that were provided to the participant. Therefore, the codes billed do not represent contraindications with CPT4.
State Consequences. The letter states that if the physicians' group continues to have to deal with this issue, it will consider making the insurance [...]