Recently, a Florida court considered the constitutionality of the dispute resolution process outlined in Fla. Stat. § 408.757 (2010). That section allows a medical provider or health insurer to submit disputed claims for review and determination by an independent organization appointed by The Agency for Health Care Administration (AHCA).
After Maximus (the organization chosen by AHCA) issued a decision favorable to the healthcare providers and ACHA adopted Maximus's decision, Blue Cross Blue Shield of Florida (BCBS) appealed the decision to the First District Court of Appeals, challenging the statute's constitutionality. The court held that inasmuch as the statute gave BCBS the right to withdraw from the dispute resolution process and file a lawsuit at any time, the statute passed constitutional muster and BCBS would be bound by Maximus's decision. The full opinion can be read here.
Providers and health plans should be aware of their rights should a payment dispute arise. In addition to the legal rights existing under ERISA and the Florida HMO Act (and other state law), alternative dispute resolution may be available, and is often a successful tool in amicably resolving payment disputes, both under contracts between the provider and the payor and under non-contracted provider payment rules.
Tuesday, June 7, 2011
Tuesday, May 24, 2011
United States Supreme Court Expands Remedies Available to Healthcare Providers and Patients Under ERISA
The United States Supreme Court recently ruled in CIGNA Corp. v. Amara, 563 U.S. ____, 348 Fed. Appx. 627 (May 16, 2011), that a fiduciary of an Employee Benefits Plan (including a Health Plan) can be sued for unpaid benefits under ERISA § 503(a)(3). Previously, courts had been reluctant to order payment of money under this section, which by its terms authorizes "other appropriate equitable relief," on the ground that the payment of money was traditionally a legal remedy, not an equitable one. The Supreme Court has now dismissed that idea, discussing in detail the history of courts of equity, and stating that, "[t]he power to reform contracts (as contrasted with the power to enforce contracts as written) is a traditional power of an equity court, not a court of law," and further, "[e]quity courts possessed the power to provide relief in the form of monetary compensation for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment." Therefore, a suit may now be maintained under § 503(a)(3) for reformation of a contract and for the payment of money, among other things.
This holding is of utmost importance to healthcare providers and patients who have been denied payment by a health insurance company. The only recourse for payment of benefits prior to this ruling was a lawsuit under § 503(a)(1)(B) for wrongful denial of benefits. But this lawsuit could only be brought against the Plan itself, and not necessarily against a plan administrator or fiduciary. Now, it would seem, recourse is available against the plan fiduciary as well as the Plain itself.
Healthcare providers, including hospitals, ancillary care providers, physician practice groups, and individual practitioners, are encouraged to carefully follow up on denied claims, and to seek third party review wherever possible. Medical Accounts Systems provides this service on a contingency fee basis (a fee is only owed if recovery is made), and when necessary, Jorge M. Abril, P.A. files suit in Federal Court to recover payment for services provided to ERISA participants and beneficiaries.
This holding is of utmost importance to healthcare providers and patients who have been denied payment by a health insurance company. The only recourse for payment of benefits prior to this ruling was a lawsuit under § 503(a)(1)(B) for wrongful denial of benefits. But this lawsuit could only be brought against the Plan itself, and not necessarily against a plan administrator or fiduciary. Now, it would seem, recourse is available against the plan fiduciary as well as the Plain itself.
Healthcare providers, including hospitals, ancillary care providers, physician practice groups, and individual practitioners, are encouraged to carefully follow up on denied claims, and to seek third party review wherever possible. Medical Accounts Systems provides this service on a contingency fee basis (a fee is only owed if recovery is made), and when necessary, Jorge M. Abril, P.A. files suit in Federal Court to recover payment for services provided to ERISA participants and beneficiaries.
Monday, September 20, 2010
Out of Network Provider Payment and Balance Billing under the Patient Protection and Affordable Care Act
One of the most common issues we encounter between providers and payors is how the provider should be paid for treating a patient who is covered by a health plan that doesn't have a contract with the provider. We've previously written about it here, in the context of insurers' controversial use of the Ingenix database to calculate usual and customary rates, and here, in the context of a report issued by the Senate Commerce Committee detailing the affect these underpayments have on consumers who are billed the remaining balance.
This article discusses the issue in the context of the Patient Protection and Affordable Care Act (PPACA), the health care reform legislation signed by President Obama in March of this year. One of the lesser known provisions of this legislation requires Health and Human Services (the "Department") to implement rules addressing the amount to be paid to out of network providers who provide emergency services. The Department proposed its interim final rules in the Federal Register on July 28, 2010. According to the interim rules, which took effect August 27, 2010, health plans must cover emergency services without requiring pre-authorization, and they must reimburse the provider the greater of (a) the median in-network rate, (b) the usual and customary rate, calculated using the plan's formula, or (c) the Medicare rate.
The Problem
This is an important development for healthcare providers, health plans, and patients. In the absence of Federal law on point, the parties were forced to look to state law to determine who should be responsible for reimbursing the provider under these circumstances and how much should be paid. Unfortunately, state laws addressing these circumstances vary greatly, if they exist at all.
Some states have no laws addressing the situation, in which case the health plan will pay nothing, leaving the provider and the patient to fight amongst themselves about how much should be paid. This creates problems for the provider, who must hope that payment is collectable from the individual patient. It also creates problems for the patient, who assumed his or her services would be covered, and who is now stuck with a bill that is usually much higher than the amount the insurer would have paid, and often more than the patient can afford, leading to poor credit and/or Bankruptcy.
Other states have laws addressing how much the health plan should pay the provider. For instance, in Florida the health plan is required to reimburse the provider the lesser of the provider's charges (which are often significantly higher than the amount paid by contracted health plans), the agreed upon rate (which almost never exists), or the usual and customary rate, pursuant to Fla. Stat. § 641.513(5). This does not afford the provider a complete remedy, because the state law in question may be preempted by ERISA with respect to health plans obtained by the patient through his or her employer, and because even if the law is not preempted in a given case, it does not provide a minimum reimbursement amount, leaving the health plan with the option to unilaterally calculate the usual and customary rate in the manner most consistent with its own interests and thereby underpay the provider. [Aside: there is a bevvy of litigation concerning the appropriate method for determining the usual and customary rate, in the context of Workers' Compensation, Personal Injury Protection, and in this scenario; we are in the process of compiling this authority and publishing it separately, but opinions are fashioned faster than we can comment on them. See Baptist Memorial Hospital-Desoto, Inc. v. Crain Automotive, Inc., No. 08-6094 (5th Cir. 2010), which was decided while this article was being drafted. The usual and customary rate calculation was at issue in that case the context of an ERISA-governed plan. The court held that a plan administrator abused his discretion in making a determination of the usual and customary rate without a sufficient factual basis, which should include more than just a comparison to other claims received by the plan.]
However, many states with laws similar to this one don't prohibit balance billing for out-of-network providers, meaning the patient is left to pay the difference after the plan pays according to the statute. See this chart for a list of the many different state laws.
This creates an unacceptable uncertainty of terms between healthcare providers, health plans, and payors. Providers and payors are required to implement state-specific policies with regard to balance billing and payment rates (which can be costly). And patients are required to be intimately familiar with their plan documents, to ensure in advance that all providers from whom they seek treatment are in network, or to obtain the provider's charges in advance of treatment (which is impossible).
The Proposed Solution
The interim final rules propose to eliminate some of the uncertainties discussed above by setting forth a minimum amount that must be paid to an out-of-network provider for emergency services- the Medicare rate, and by providing for additional payment when either the usual and customary rate or the median in-network rate exceeds the Medicare rate. According to the Department, these regulations will significantly increase the amount health plans will be required to pay when their members go to the emergency room at a non-contracted facility, which will reduce the amount the patient is responsible for. The regulations, which do not apply to grandfathered health plans under PPACA (as discussed in this CRS Report), have already taken effect.
Remaining Issues
The interim rules set a minimum payment amount (the Medicare rate), but they do not eliminate the uncertainty associated with the usual and customary rate. First, by the language of the rules, the health plan is still charged with sole discretion to calculate the usual and customary rate, which will upset providers, who have considered themselves victims of underpayments by health insurers (i.e. Ingenix) for quite some time. See this letter filed by the American Hospital Association in opposition to the interim rules, which also argues that by setting a rate, the Department has eliminated the health plan's incentive to contract with providers. Additionally, and most important to consumers, the interim rules do not prohibit balance billing, which will still leave patients unexpectedly footing a substantial bill (albeit a little less than what they would be paying otherwise); and there remains doubt as to whether PPACA's express allowance of balance billing preempts state laws to the contrary. If so, the interim rules represent a step in the wrong direction for patients residing in states like California.
If nothing else, the above shows that without additional guidance, providers, payors, and patients should expect to continue to litigate out-of-network claims on an individual basis, notwithstanding the interim rules. If you are a provider, health plan, or patient, with an opinion relevant to this issue, please feel free to comment below. If you would like to retain the services of an agency or attorney in connection with an issue you are currently facing, please feel free to contact Medical Accounts Systems or Jorge M. Abril, P.A.
This article discusses the issue in the context of the Patient Protection and Affordable Care Act (PPACA), the health care reform legislation signed by President Obama in March of this year. One of the lesser known provisions of this legislation requires Health and Human Services (the "Department") to implement rules addressing the amount to be paid to out of network providers who provide emergency services. The Department proposed its interim final rules in the Federal Register on July 28, 2010. According to the interim rules, which took effect August 27, 2010, health plans must cover emergency services without requiring pre-authorization, and they must reimburse the provider the greater of (a) the median in-network rate, (b) the usual and customary rate, calculated using the plan's formula, or (c) the Medicare rate.
The Problem
This is an important development for healthcare providers, health plans, and patients. In the absence of Federal law on point, the parties were forced to look to state law to determine who should be responsible for reimbursing the provider under these circumstances and how much should be paid. Unfortunately, state laws addressing these circumstances vary greatly, if they exist at all.
Some states have no laws addressing the situation, in which case the health plan will pay nothing, leaving the provider and the patient to fight amongst themselves about how much should be paid. This creates problems for the provider, who must hope that payment is collectable from the individual patient. It also creates problems for the patient, who assumed his or her services would be covered, and who is now stuck with a bill that is usually much higher than the amount the insurer would have paid, and often more than the patient can afford, leading to poor credit and/or Bankruptcy.
Other states have laws addressing how much the health plan should pay the provider. For instance, in Florida the health plan is required to reimburse the provider the lesser of the provider's charges (which are often significantly higher than the amount paid by contracted health plans), the agreed upon rate (which almost never exists), or the usual and customary rate, pursuant to Fla. Stat. § 641.513(5). This does not afford the provider a complete remedy, because the state law in question may be preempted by ERISA with respect to health plans obtained by the patient through his or her employer, and because even if the law is not preempted in a given case, it does not provide a minimum reimbursement amount, leaving the health plan with the option to unilaterally calculate the usual and customary rate in the manner most consistent with its own interests and thereby underpay the provider. [Aside: there is a bevvy of litigation concerning the appropriate method for determining the usual and customary rate, in the context of Workers' Compensation, Personal Injury Protection, and in this scenario; we are in the process of compiling this authority and publishing it separately, but opinions are fashioned faster than we can comment on them. See Baptist Memorial Hospital-Desoto, Inc. v. Crain Automotive, Inc., No. 08-6094 (5th Cir. 2010), which was decided while this article was being drafted. The usual and customary rate calculation was at issue in that case the context of an ERISA-governed plan. The court held that a plan administrator abused his discretion in making a determination of the usual and customary rate without a sufficient factual basis, which should include more than just a comparison to other claims received by the plan.]
However, many states with laws similar to this one don't prohibit balance billing for out-of-network providers, meaning the patient is left to pay the difference after the plan pays according to the statute. See this chart for a list of the many different state laws.
This creates an unacceptable uncertainty of terms between healthcare providers, health plans, and payors. Providers and payors are required to implement state-specific policies with regard to balance billing and payment rates (which can be costly). And patients are required to be intimately familiar with their plan documents, to ensure in advance that all providers from whom they seek treatment are in network, or to obtain the provider's charges in advance of treatment (which is impossible).
The Proposed Solution
The interim final rules propose to eliminate some of the uncertainties discussed above by setting forth a minimum amount that must be paid to an out-of-network provider for emergency services- the Medicare rate, and by providing for additional payment when either the usual and customary rate or the median in-network rate exceeds the Medicare rate. According to the Department, these regulations will significantly increase the amount health plans will be required to pay when their members go to the emergency room at a non-contracted facility, which will reduce the amount the patient is responsible for. The regulations, which do not apply to grandfathered health plans under PPACA (as discussed in this CRS Report), have already taken effect.
Remaining Issues
The interim rules set a minimum payment amount (the Medicare rate), but they do not eliminate the uncertainty associated with the usual and customary rate. First, by the language of the rules, the health plan is still charged with sole discretion to calculate the usual and customary rate, which will upset providers, who have considered themselves victims of underpayments by health insurers (i.e. Ingenix) for quite some time. See this letter filed by the American Hospital Association in opposition to the interim rules, which also argues that by setting a rate, the Department has eliminated the health plan's incentive to contract with providers. Additionally, and most important to consumers, the interim rules do not prohibit balance billing, which will still leave patients unexpectedly footing a substantial bill (albeit a little less than what they would be paying otherwise); and there remains doubt as to whether PPACA's express allowance of balance billing preempts state laws to the contrary. If so, the interim rules represent a step in the wrong direction for patients residing in states like California.
If nothing else, the above shows that without additional guidance, providers, payors, and patients should expect to continue to litigate out-of-network claims on an individual basis, notwithstanding the interim rules. If you are a provider, health plan, or patient, with an opinion relevant to this issue, please feel free to comment below. If you would like to retain the services of an agency or attorney in connection with an issue you are currently facing, please feel free to contact Medical Accounts Systems or Jorge M. Abril, P.A.
Friday, September 3, 2010
Welcome to Healthcare Provider Payment
Welcome to Healthcare Provider Payment, a blog authored by Medical Accounts Systems and Jorge M. Abril, P.A. Here we will discuss relevant news and emerging trends in healthcare reimbursement, from insurance litigation news and Managed Care contracting issues, to health law and policy. We maintain this site as a service to our existing clients and as a news source for the general public. We encourage you to browse our blog entries and to post comments via the comment form. If at all possible, we will respond accordingly, subject to our terms of use, our comment policy and the limitations provided herein. Thank you.
We begin by reposting articles originally posted on the Florida Collection Law Blog in the Healthcare category, which you will find below.
We begin by reposting articles originally posted on the Florida Collection Law Blog in the Healthcare category, which you will find below.
Saturday, February 13, 2010
HITECH Act's Changes to HIPAA Privacy Rule Soon Taking Effect
Covered entities and business associates subject to the HIPAA Privacy Rule, including health care providers and revenue cycle vendors, should take note that the amendments to the Rule brought about by the Health Information Technology for Economic and Clinical Health Act, §§13400-13424 of the American Recovery and Reinvestment Act of 2009 (the "HITECH Act"), take effect February 17, 2010.
Previously, business associates' only liability for mishandling Protected Health Information (PHI) arose under the business associate's contract with the health care provider, and the only party responsible for ensuring the existence of a proper Business Associate Agreement was the provider itself. Under the amended regulations, a business associate can now be held directly responsible for improper use of PHI and for the failure to maintain proper policies for its protection. §13404(a).
The HITECH Act makes the following provisions, previously directed at covered entities only, applicable to business associates:
The breach notification requirements affecting covered entities and business associates have also changed. The HITECH Act requires notification by a covered entity to the individual whose PHI has been breached, within a reasonable time, not longer than 60 days. Business associates must notify covered entities of any breach within the same time period. The notice must be sent in writing via first class mail, and in the case where the breach concerns 10 or more individuals and the individuals cannot be located, notice must be posted on the breaching party's website and through public media. Notice regarding the breach must also be provided to the Secretary, immediately in the case of a breach concerning 500 or more individuals, and via an annual log in the case of a breach of fewer than 500 individuals. §13402.
The penalties for failing to comply with these provisions include criminal charges, §13409, and civil sanctions, §13410.
From a practical standpoint, this means that agencies should implement their own documented policies for protecting PHI and should immediately ensure that a Business Associate Agreement is executed with the covered entities with which they do business. Covered entities should review the policies of each and every business associate. If an agreement already exists (which it should), it may need to be amended. It must limit the exchange and use of PHI to the minimum amount necessary for the business associate to carry out its function. HHS has a website discussing the recommended contract language, here. Our sample contract is found below. Note: the agreement requires customization based upon the use of PHI contemplated by the parties' business relationship.
Previously, business associates' only liability for mishandling Protected Health Information (PHI) arose under the business associate's contract with the health care provider, and the only party responsible for ensuring the existence of a proper Business Associate Agreement was the provider itself. Under the amended regulations, a business associate can now be held directly responsible for improper use of PHI and for the failure to maintain proper policies for its protection. §13404(a).
The HITECH Act makes the following provisions, previously directed at covered entities only, applicable to business associates:
- Administrative safeguards (45 C.F.R. § 164.308)
- Physical safeguards (45 C.F.R. § 164.310)
- Technical safeguards (45 C.F.R. § 164.312)
- Policies and documentation (45 C.F.R. § 164.316)
The breach notification requirements affecting covered entities and business associates have also changed. The HITECH Act requires notification by a covered entity to the individual whose PHI has been breached, within a reasonable time, not longer than 60 days. Business associates must notify covered entities of any breach within the same time period. The notice must be sent in writing via first class mail, and in the case where the breach concerns 10 or more individuals and the individuals cannot be located, notice must be posted on the breaching party's website and through public media. Notice regarding the breach must also be provided to the Secretary, immediately in the case of a breach concerning 500 or more individuals, and via an annual log in the case of a breach of fewer than 500 individuals. §13402.
The penalties for failing to comply with these provisions include criminal charges, §13409, and civil sanctions, §13410.
From a practical standpoint, this means that agencies should implement their own documented policies for protecting PHI and should immediately ensure that a Business Associate Agreement is executed with the covered entities with which they do business. Covered entities should review the policies of each and every business associate. If an agreement already exists (which it should), it may need to be amended. It must limit the exchange and use of PHI to the minimum amount necessary for the business associate to carry out its function. HHS has a website discussing the recommended contract language, here. Our sample contract is found below. Note: the agreement requires customization based upon the use of PHI contemplated by the parties' business relationship.
Wednesday, July 1, 2009
Out-of-Network Healthcare Provider Payment News
Florida Senate Bill 1122 takes effect today. The law amends Florida Statutes section 627.638 to require health insurers to make payment directly to hospitals, physicians, and other providers of treatment when the provider is not a member of the insurer's network. Previously, despite the patient's assignment of healthcare benefits to the provider upon admission, some insurance companies relied on language in the member's handbook requiring payment to be made to the patient rather than the provider. Under the new law, the provider should expect to be reimbursed by the plan directly, irrespective of the terms of the patient's member handbook. The Florida Medical Association has more information on this legislation and its benefit at patientsoverprofits.com.
Also of note to healthcare providers, last week the Senate Commerce Committee issued a report for Chairman Rockefeller entitled Underpayments to Consumers by the Health Insurance Industry, detailing the pattern of inadequate payments by Managed Care Organizations for out-of-network treatment resulting from their improper method for calculating the usual and customary rate. We've blogged before about the insurers' use of Ingenix to unilaterally determine out of network provider reimbursement rates, and our law firm has been seeking reconsideration of underpayments on behalf of hospitals and physicians in State and Federal court for many years.
This report explains how underpayment for out-of-network care affects consumers. There is a definite benefit to patients in the ability to seek medical treatment from the provider of their choice, and according to the report insurance companies charge significant premiums for the patients' enjoyment of this benefit - roughly $1,700 per year for a Federal employee, for instance. But this benefit can only be enjoyed in full when the insurer reimburses the provider in accordance with the parties' intentions and with applicable law. According to statistics released by New York Attorney General Andrew Cuomo and cited by the Senate Committee report, health insurers' calculation of usual and customary rates results in payments equaling only 70% of the actual market rate, leaving the patient to pay the remainder, and thereby frustrating enjoyment of the benefit of choice paid for by the consumer. More on this issue as it relates to consumers can be read in this article at Health News Florida.
Attorney General Cuomo, the Senate Commerce Committee and the Florida Legislature are to be applauded by providers and patients alike for seeking to prevent future nonpayment or underpayment, but for the most part their legislative efforts do not address the issue of prior wrongs. Providers should be encouraged to seek independent analysis of the reimbursement rates received for out-of-network services and to seek appropriate and adequate compensation on all claims through available legal remedies.
Also of note to healthcare providers, last week the Senate Commerce Committee issued a report for Chairman Rockefeller entitled Underpayments to Consumers by the Health Insurance Industry, detailing the pattern of inadequate payments by Managed Care Organizations for out-of-network treatment resulting from their improper method for calculating the usual and customary rate. We've blogged before about the insurers' use of Ingenix to unilaterally determine out of network provider reimbursement rates, and our law firm has been seeking reconsideration of underpayments on behalf of hospitals and physicians in State and Federal court for many years.
This report explains how underpayment for out-of-network care affects consumers. There is a definite benefit to patients in the ability to seek medical treatment from the provider of their choice, and according to the report insurance companies charge significant premiums for the patients' enjoyment of this benefit - roughly $1,700 per year for a Federal employee, for instance. But this benefit can only be enjoyed in full when the insurer reimburses the provider in accordance with the parties' intentions and with applicable law. According to statistics released by New York Attorney General Andrew Cuomo and cited by the Senate Committee report, health insurers' calculation of usual and customary rates results in payments equaling only 70% of the actual market rate, leaving the patient to pay the remainder, and thereby frustrating enjoyment of the benefit of choice paid for by the consumer. More on this issue as it relates to consumers can be read in this article at Health News Florida.
Attorney General Cuomo, the Senate Commerce Committee and the Florida Legislature are to be applauded by providers and patients alike for seeking to prevent future nonpayment or underpayment, but for the most part their legislative efforts do not address the issue of prior wrongs. Providers should be encouraged to seek independent analysis of the reimbursement rates received for out-of-network services and to seek appropriate and adequate compensation on all claims through available legal remedies.
Wednesday, May 20, 2009
Selling Healthcare Receivables through Established Relationships- The Benefit of Forward Flow Agreements
Selling delinquent debt has become commonplace in many industries, but it remains limited in the healthcare arena, for many reasons. Hospital financial services executives remain concerned with maintaining control over their account inventory and minimizing public relations risks. Moreover, the unique nature of medical debt requires that healthcare providers conduct considerable due diligence before embarking on the sale of their medical debt. The charitable mission of many acute care facilities, along with the public relations concerns that may result from aggressive third party collection tactics, dissuades many providers from selling their debt. Additionally, the absence of secondary markets has served to hold prices down.
However, facilities that have established a relationship with a collection vendor are now more comfortable with the possibility of an outright sale of their debt, as opposed to the traditional contingency fee contract relationship. In fact, forward-flow agreements are becoming more popular as healthcare providers seek to maximize revenue and immediate cash infusions. Ideally, these agreements contemplate the sale of receivables on a monthly basis, with the benefit of a look-back period which allows for more accurate pricing. As hospitals become more comfortable in the sale of their receivables, we expect that forward-flow agreements will become a routine avenue for revenue maximization.
Jorge M. Abril, P.A. encourages its clients to evaluate the sale of their delinquent receivables as a viable strategy for increasing cash revenues while minimizing their public relations risks.
However, facilities that have established a relationship with a collection vendor are now more comfortable with the possibility of an outright sale of their debt, as opposed to the traditional contingency fee contract relationship. In fact, forward-flow agreements are becoming more popular as healthcare providers seek to maximize revenue and immediate cash infusions. Ideally, these agreements contemplate the sale of receivables on a monthly basis, with the benefit of a look-back period which allows for more accurate pricing. As hospitals become more comfortable in the sale of their receivables, we expect that forward-flow agreements will become a routine avenue for revenue maximization.
Jorge M. Abril, P.A. encourages its clients to evaluate the sale of their delinquent receivables as a viable strategy for increasing cash revenues while minimizing their public relations risks.
Subscribe to:
Posts (Atom)