Recent headlines include details on recent lawsuit won by Blue Cross Blue Shield (BCBS) over a series of underpayments on emergency room care in Texas. The lawsuit alleged that BCBS purposely underpaid those claims, because, as they stated, the patients shouldn’t have gone to the emergency room in the first place. Although BCBS won the lawsuit and therefore doesn’t owe any money to the hospitals who sued, this doesn’t mean that they can get away with underpayments in general. In fact, there are many ways to track those underpayments, as well as collect on them. We’ll go into some detail on this here.
BCBS Won The Lawsuit
According to the article, the lawsuit in question involved a large number of out of network claims that BCBS underpaid. Overall, “the physicians’ lawsuit accused BCBS of Texas of underpaying 250,000-plus claims for emergency medical care. Earlier this year, the health insurer announced a new discretionary ER policy, under which a medical director hired by the insurer reviews claims after the ER visit to determine the reason a patient opted for the ER and if they could have received treatment in a less expensive setting.” The suit was dismissed by the judge, even though the group of doctors has around 60 days to dispute that ruling. This comes at a time when “Anthem launched a similar policy in multiple states and has faced harsh criticism as well as numerous lawsuits. A recent report from Sen. Claire McCaskill, D-Mo., found the insurer denied 12,200 claims from members in three states during the second half of 2017 on the grounds the ER visits were “avoidable.” However, when patients challenged the denials, Anthem proceeded to reverse itself and pay the claims most of the time.”
Many underpayments happen for the same reasons as unpaid claims. Some of the reasons include payor miscalculation, contract issues, and misinterpretations, general billing errors, and even accidentally using incorrect contract terms. The general billing errors are the easiest to avoid. In some cases, the documentation and all of the paperwork aren’t sent with the claim, or the wrong ones are included. The bill could also be for the wrong amount – or so the commercial insurance believes. They’ll end up just paying whichever amount that they think is correct.
Contract terms are another issue that causes these underpayments. Every clinic, practice, or hospital has a contract with each commercial health insurance agency. When those terms get interpreted wrong, billing issues occur. This leads to underpayments, as the insurance company thinks that they’re paying the correct amount, when they, in fact, are not. Incorrect calculations and other contract issues can lead to underpayments as well. Although these claims issues are tough to clear up, they can be avoided with some clear communication between your practice and the commercial health insurance company.
Good Communication is the Key to Dealing With Underpayments
In general, there are three main ways to deal with those commercial health insurance underpayments. You can start by breaking them down by the payor, or the company that underpaid the claims in the first place. This makes it easier to see which companies tend to underpay the most. Once you have determined this, you can speak with your representative from that company to see if there are lingering billing issues that need to be cleared up. Remember that communication is important!
You can also set up a reporting system, such as a spreadsheet, that is handled by your billing personnel and the accounting staff at the commercial health insurance company. This also opens a line of communication, albeit in spreadsheet form, between your employees and those at the insurance company. If something ends up getting underpaid, everyone is aware of it, making it easier to ask that important question – “why?”
Finally, you need a way to store those underpayments. You don’t want them to get forgotten!
Forgetting About Underpayments is the Worst Way to Deal With Them
This is the most important thing to remember is to keep an eye on those underpayments. It’s all too easy to let them fall through the cracks and get overlooked. After all, your billing staff is very busy sending out new claims and tracking existing ones to ensure that they get paid in full. Thankfully, you have some options here. You can:
- Keep all of your underpayments on a spreadsheet, much like the one described above. Only this one will have all of those underpayments listed, not just the ones for a particular commercial insurance company.
- Have a dedicated staff member (billing employee) who’s in charge of handling these underpayments. Ideally, this person will send those underpayments through the state-level appeals process as well.
No matter what, you don’t want to give up. Keep pushing until those underpaid claims end up getting paid in full.
The State-Level Appeals Still Apply
No matter the size of the underpayment, you still receive three state-level appeals on it. This means that when the insurance company refuses to pay them in full, you have three additional chances to get them to do so. Here’s how that process usually works:
The insurance company receives the claim, and for whatever reason, they end up paying only half of what’s due. The payment is sent to you, and then you send the balance out for an appeal. The insurance company might pay an additional 5 or 10% on it. Your employees then file another appeal. This goes around and around until the appeals are exhausted, and a balance is still due. Thankfully, you have one additional option at this point.
You Can Collect on Underpayments with the Federal ERISA Process
You’ve no doubt heard about Federal ERISA laws before. They’re a set of federal laws that govern things like employee retirement accounts and self-paid insurance plans. According to ERISA, those commercial health insurance companies need to clear up those underpayments. Otherwise, they’re running afoul of the law. The main issue here is that many hospitals, clinics, and even practices, never file those appeals.
Why? Because these businesses don’t know that they can file those Federal ERISA appeals, and even if they do, they aren’t quite sure how. Most medical billing and coding courses don’t cover ERISA at all. Even if they did, your billing employees are far too busy to go through the lengthy process. This would take away from the many other tasks that they tackle every day. To go even further, most law schools don’t cover the material at all. You need to find a company that specializes in these appeals, like us, ERISA Recovery.
Sometimes You Need a Little Help
If we haven’t already made this clear, you need help collecting on those commercial health insurance company underpayments. Once your three state-level appeals are gone, you need to file a Federal ERISA claim on them, lest your revenue cycle end up out of balance. We can do that for you. Just call us, ERISA Recovery, and ask to speak to one of our Federal ERISA experts. You can reach us at (972) 331-4140 or through the contact form on our website. We don’t charge anything upfront, and have a $1 million guarantee – that’s the amount that we’ll collect for you in 12 months, as long as you can provide all of the paperwork that we need. Don’t wait any longer to collect on those underpayments.