Boy, I love it when my readers do all the work for me. I encourage the rest of you to do the same.
The subject? How do deal with prior auth issues, especially when our insurance friends change their minds after-the-fact.
The lead in:
Hey Chip! Thought I would pass this on to you, perhaps it can help you for the coding. We found this out as insurance companies would sometimes deny payment when we had called for prior auth for the VEP, 95930. However there are specific laws governing this matter. Here is a form letter we have for our denials when we get prior auth for the 95930 and they refuse to pay, but it has much larger implications.
Realistically we also call to get prior auth for things like well visits, hearing tests, and immunizations, and sometimes insurance companies would refuse to pay. Before we would often unfortunately just have to make the parents pay, which was horrible after we had verified that their insurance would pay. But legally insurance companies are liable.
As I am in California the initial section deals with California law, but there is precedent in federal law as well.
Hope this helps you! Thanks for your advice in the past!
And now, the letter:
Dear [Patient->Primary Insurance Name]:
On [Visit->Date Occurred] our office called to verify
that [Patient->Full Name] was indeed an enrollee
covered under your plan. On that date,
***NAME OF CONTACT *** verified that
[Patient->Full Name] was covered for CPT code 95930.
At no time were we told that:
(1) the enrollee’s right to receive benefits was
subject to forfeiture or reduction;
(2) the enrollee’s coverage was contingent upon
further investigation of the facts; or that
(3) you would conduct a post-claim investigation to
determine the availability of benefits to the enrollee.
If you had made such representations we would
have sought reimbursement from other sources.
Based on your assurances of coverage we provided
necessary treatment to the enrollee. The cost of that
treatment totaled $___________.
You afterwards informed our office that you are
denying our claim because the enrollee is no longer
eligible for benefits. This denial is against California
law that prohibits a Knox-Keene plan or insurance
company that authorizes treatment and/or verifies
eligibility from rescinding or modifying the
authorization/verification after the physician renders
the service in good faith and pursuant to the
authorization for any reason, including, but not limited
to, the plan’s subsequent determination that it did
not make an accurate determination of the enrollee’s
or subscriber’s eligibility.
(Health and Safety Code 1371.8; Insurance Code 796.04.)
Further, regulations implementing CMA sponsored
unfair payment legislation, A>B>1455 (2000), deem
a plan or IPA’s denial under these circumstances unlawful.
(28 C.C.R. 1300.71 (a)(8)(T).)
Therefore, since the care referenced above was
authorized you must pay us even if your employee
made a mistake and the patient was not covered
for the specific services provided.
This denial is also contrary to federal law, I.E., the
Case of The Meadows v. Employers Health Insurance
(9th Cir 1995) 47F.3d 1006. In this case an ERISA
plan denied coverage to a drug treatment facility
after previously verifying eligibility. The court
allowed a suit to be brought against the plan
for breach of contract and negligent misrepresentation,
among other things. The court stated that
if eligibility is verified such verification cannot
later be rescinded as plans are not insulated “from
the consequences of their own misrepresentations”
Pursuant to the above referenced California law,
please remit the amount of $____ to our office within
30 days. If we do not receive payment by that date we
regretfully will send this to the Department of Managed
Health for further legal action.
Thank you for your cooperation.