January 26, 2024 | By: Karlene Dittrich, CBCS, CPC, CPMA, CECCS | Certified ERISA/PPACA Claims Handling Compliance & Appeal Specialist
The most common question I am asked in my seminars sharing relevant laws that support claims handling compliance requirements is: “But what about my contract?” Insurance companies write payer contracts in a way that leaves healthcare providers feeling powerless over denial tactics that negatively affect the bottom line.
Sadly, we are seeing a vast increase in hospital and practice closings, bankruptcies, mergers, and acquisitions nationwide. As a claims handling compliance specialist, many of these unwarranted financial challenges result from wrongful claim denials for healthcare services rendered in good faith. These are not necessarily denials related to claims billed improperly. In fact, as certified coders and auditors, how many denials have you seen on claims that promote confusion on how the insurance company made its determination? Unfortunately, such misleading findings are not uncommon.
So, how do you get such denials on a clean or corrected claim overturned when faced with challenging disregard by insurance companies to overturn an improperly applied denial or adjustment? It is important to note that compliance is a two-way street! Like healthcare providers, insurance companies have regulatory guidelines they are “supposed” to follow in handling claims. The key is to gain awareness of those regulatory guidelines and understand how they apply to improper denial and offset tactics.
It is common knowledge that Medicare is rule-based, and many traditional Medicare claim denials are typically the result of missing or misunderstanding a Medicare rule. However, that is not always true with Medicare Advantage Plan (MAP) and commercial plan-related claim denials. However, we all have rules we are supposed to follow, so what are the rules MAP and Commercial Plans are supposed to follow in the claims handling process, and are they following them in the claims process.
Don’t assume that your one-sided contracts written by insurance companies include compliant supported provisions and policies. In order to remain viable as a healthcare provider, it is our job to be aware of the compliance requirements insurance companies are supposed to follow in the claims handling process.
What laws support claims handling filing requirements? The laws are defined under state-specific insurance codes, ERISA, Affordable Care Act (ACA), and even Medicare Advantage laws. When addressing denials, start with the type of plan you are dealing with and the law(s) that governs that plan and claims process.
Example: Review of a commercial plan timely filing denial
Governing law: ERISA
Resource(s) to consider: Dept of Labor FAQ C-19
C-19: Does the regulation limit a plan’s ability to establish a maximum period for filing initial claims for benefits?
No. The regulation does not contain any specific rules governing the period of time that must be given to claimants to file their claims. However, a plan’s claim procedure nonetheless must be reasonable and not contain any provision or be administered in any way that unduly inhibits or hampers the initiation or processing of claims for benefits. Adopting a period of time for filing claims that unduly limit claimants’ reasonable, good-faith efforts to make claims for and obtain benefits under the plan would violate this requirement. See 29 CFR § 2560.503-1(b)(3).
Review of ERISA specific provision: 29 CFR § 2560.503-1(b)(3)
The claims procedures do not contain any provision and are not administered in a way that unduly inhibits or hampers initiating or processing claims for benefits.
Example: An Out of Network Medicare Advantage claim denial
Governing law: Federal MA Laws
Resource to consider: Title 42 §§ 422.100(a); (c)(1) and (b)
(a) Basic rule. Subject to the conditions and limitations set forth in this subpart, an MA organization offering an MA plan must provide enrollees in that plan with coverage of the basic benefits described in paragraph (c)(1) of this section.
(c)(1) Basic benefits are all items and services (other than hospice care or, beginning in 2021, coverage for organ acquisitions for kidney transplants) for which benefits are available under Parts A and B of Medicare, including additional telehealth benefits offered consistent with the requirements at § 422.135.
(b)(2) An MA plan (and an MA MSA plan, after the annual deductible in § 422.103(d) has been met) offered by an MA organization satisfies paragraph (a) of this section with respect to benefits for services furnished by a noncontracting provider if that MA plan provides payment in an amount the provider would have received under original Medicare (including balance billing permitted under Medicare Part A and Part B).
Now, you have a compliant-based resource to address the two denials listed above.
However, we return to the original question: “But what about my contract?” The vast majority of contracted providers are led to believe that they have to comply with all the provisions in their contracts. That is not the case!
One provision that proves otherwise must be included in every contract. All contracts have a provision that protects healthcare providers and their entitled revenue, and it is the “provision on governing laws”:
Example: Federal law and the applicable law of the jurisdiction where you provide healthcare services govern our agreement. Such laws and the rules and regulations promulgated under them, when they are applicable, control and supersede our agreement.
The bottom line is that when a provision within the contract conflicts with an applicable state or federal law, such provision is unenforceable. In addition to applicable governing laws, insurance companies must comply with applicable plan documents and CMS guidelines. These are the best resources to assess and address non-compliant or misleading denial tactics. If the provision on governing laws is unavailable or you are out of network, go to their website and review their code of ethics or conduct and the disclaimers before entering the desired clinical policy bulletin.
You are now equipped to address the above denial examples, allowing you to receive the benefit payment due and owed for services rendered and billed in good faith.
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