Dr. Karen Rizzo, president of the Pennsylvania Medical Society, issued a statement Tuesday in support of legislation by state Sen. David Argall (R-Schuylkill, Berks) that would limit insurers’ retroactive denials of health insurance claims.
According to Argall, providers can unilaterally and at any time reduce future payments to recover the denied amount. Senate Bill 554 would limit that ability to one year.
“Due to advances in technology, a one-year period of review should not create an undue burden on insurers,” Argall said in a press release.
“Sometimes years after a payment has been made by an insurer and assumed to be accurate by medical practices and their patients, insurers will embark on a process of reconciliation which results in a declaration they’ve made a payment in error,” said PAMed‘s Rizzo. “When this happens, the insurer will seek to recover the payment amount in question. This reconciliation process not only affects the physician but also the patient. A patient is ultimately responsible for the services he or she has received. In some cases, the patient may no longer even be a patient of the physician.”
Calling the current situation “unsustainable,” Rizzo noted that “inefficient processing, payment and reconciliation of health care claims” make up 10 percent to 14 percent of practice revenue for a physician. Argall’s measure would help to ensure the financial health of physician practices, she said.
Argall’s “retroactive review” legislation would require insurance carriers to review treatment plans, claim forms and billing statements “within a reasonable amount of time,” she said. The legislation would also require a written statement from the insurer specifying the basis for any retroactive denial so that the physician and his or her staff can effectively deal with the situation, she said.
At a news conference Monday, Pennsylvania Orthopaedic Society President Dr. Thomas Muzzonigro noted that insurers “currently enjoy an uneven playing field.”
“Insurer contracts generally provide that a healthcare provider must submit a claim within 12 months of treatment,” Muzzonigro said. “This seems to be a reasonable timeframe in which to submit a claim for payment. Insurers, on the other hand, reserve the right to retroactively review claims with no limit.”
Muzzonigro noted that a the “claw-back,” as the practice is commonly known, “allows an insurer to subject physicians to recoupment of paid claims that are two, three or even four years old.”
“Worse yet,” he said, “an insurer may simply reduce physicians’ future payments by the alleged overpayment amount the insurer determined. Unfortunately, our only recourse is to appeal that decision to the insurer who conducted the retroactive review.”
Similar legislation passed the state House in 2007 on a 203-to-0 vote but never received final approval.
“Healthcare providers’ efforts to revive the issue have been met with stiff opposition from the insurance industry ever since,” Muzzonigro said.
“Pennsylvania physicians make every effort to follow the many rules of different health insurance plans,” Rizzo said. “What physicians want is an accurate payment in a timely manner based upon contract agreements.”