Law restricts insurance companies on requests for repayment
Insurance companies often request to review a medical office’s charts as part of an audit. Subsequently, a payer may conclude the physician was paid too much for a claim and ask for repayment or recovery of the overpayment by offsetting future payments.
While the audit may be legitimate (check your contracts!), the insurance company’s ability to request reimbursement of an alleged overpayment is limited by a new Indiana law effective July 1, 2006.
Under the new law, an insurer or health maintenance organization (HMO) may not ask a physician to repay an overpayment or adjust a subsequent claim as a method of recovering an overpayment more than two years after the date of the overpayment. Note the time limitation is not calculated from the date of service.
If the insurer/HMO adjusts a subsequent claim to recover an overpayment, each adjusted subsequent claim must be accompanied by an explanation of the adjustment, including:
1. Identification of the claim on which the overpayment was made and party financially responsible for the overpaid amount, if ascertainable
2. Amount of the overpayment being reimbursed to the insurer through the adjusted subsequent claim
The new law also limits a physician’s ability to require an insurer/HMO to correct a payment error (i.e., an underpayment) to two years after the date of original payment. The new law does not apply in the case of fraud by the provider, the insured or the insurer with respect to the claim at issue.
If you believe an insurer/HMO has violated this provision, notify the insurer/HMO in writing to promptly remedy the situation. You also may contact the Indiana Department of Insurance at (317) 232-2385.
Anthem/Wellpoint
Besides the new law, the Anthem/Wellpoint Settlement Agreement addressed that insurer’s ability to request returns of overpayments, among other things. The agreement states Anthem/Wellpoint cannot request repayment from a provider more than 18 months after the initial overpayment.
This is stricter than the new Indiana law. However, if the provider’s contract with Anthem/Wellpoint has terms inconsistent with this provision, the settlement agreement provision and the provider’s recovery under it may have been WAIVED.
Ideally, your contract would have language like:
WellPoint represents that nothing in this contract waives or conflicts with any of the business practice initiatives it has agreed to undertake pursuant to the Settlement Agreement dated as of July 11, 2005, In Re: Managed Care Litigation, MDL No.: 1334-MORENO.
Final cautions
As always, consult with your attorney before signing any contracts, and particularly before agreeing to waive any protections in the settlement. Also, consider asking Anthem/Wellpoint to identify and explain in writing each provision of your contract inconsistent with the settlement.
If you believe Anthem/Wellpoint is not complying with any settlement provisions, you may initiate a compliance dispute at no charge by filing a compliance claim form. Find the form at www.hmosettlements.com; click on “Compliance.”
The Anthem settlement agreement terminates July 15, 2009, at which point the two-year limit imposed by the Indiana law would apply.
Contact ISMA’s Legal Department if you have questions.
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