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”

to providers.

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.

Awesome. Thanks.