I previously wrote about the EOB and how insurance companies try their many tricks to decrease reimbursement to physicians. Most physicians do not fight back. Some do. Medical Economics has highlighted the plight of one physician who has been fighting back. Their story is about a Chicago ENT surgeon who brought a lawsuit against an insurance company for bundling and downcoding claims. Apparently, the insurance company settled with him for $140,000.
As I mentioned in a previous post, bundling is when insurance companies downcode or combine multiple codes into one in order to reimburse the provider less. In this physician’s case, the insurance company was bundling endoscopies with office visits and was reimbursing for the least costly services only. Additionally, the insurer downcoded several codes based on software it uses and tried to say that the lowered reimbursement was a “negotiated write-off” as though the physician’s practice had agreed to it. This is exactly the type of thing I was referring to when I said that insurance companies “force” physician’s to accept lower payment. As this insurance company’s logic shows, failure to fight downcoding and bundling is equal to “acceptance” by the physician. Thus, if you do not correct it, it is assumed that you accept it.
Interestingly, the practice in question has a threshold for when to trigger legal action. When denials reach over $50,000 by one insurer, it triggers the next step in legal action.
Details are not given as to who actually pays for all of these legal costs. However, you can be sure that the addition of an attorney to your practice is probably prohibitively expensive. But when the potential windfall is large - this practice says that several hundred thousand dollars are collected each year via denial appeals - it may well be worth the investment.
If any reader out there knows of any stories like this, I would be interested to hear about them. It is not often that you find a provider willing to sue an insurer over downcoding. But I anticipate to see this gain popularity in the future.
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One more example of how insurance companies maximize profit. They clearly know what they are doing. Though I say in my article on Health Care Reform that class actions and lawsuits in general should be a last resort, this looks like a case for a class action. Obviously they have the same practice with others. It is also an illustration of why we need health care reform. Hopefully if Obama wins, this type problem could be solved by government oversight in the health care insurance registry that he advocates.
Thank you for your interest in this area. I am a specialty physician who has headed a 5 person group for the past 19 years. Over the past 14 years we have seen our overall reimbursement rates drop from over 90% to under 40%, while not raising our charges for services over the same time. We have had to substantially reduce the time we spend with patients versus documenting in charts. We have had to more than tripple the size of our office staff to file initial claims and follow up on denials.
Insurance companies dictate not only our payments, but also our practice of of medicine. They repeatedly deny payments for recommended testing and treatments without “additional clinical information” as though someone in their company had better judgement and insight into the patient’s problems than do we. They frequently require preauthorization for testing. Then, it can take hours of employee time to wait on hold to get prior approval, and even after approval is obtained, they do not guarantee payment for services rendered. In addition, each insurance company establishes its own rules for which testing/treatments require prior approval and those rules are constantly changing.
Most of the time, I could complete a substantial portion of needed testing before the patient leaves the office at the first visit, but this is not allowed. Only one charge (the cheaper) for either an evaluation or testing is permitted on the same day. Unfortunately, the patient has to schedule a return visit for testing and treatments. If the patient does not return, then the insurance company saves money. Even if the patient does return, the insurance company saves the time value of the money. This is the same savings they enjoy by delaying payments to providers by requiring them to provide “additional information” before making payments
. Another method for reducing payments to physician providers employed by insurance companies is auditing patient charts. This is essentially cost free to the insurance company, while costing the physician hours of employee time and worry . They simply contract with a company to audit for them and pay them a commission based on the amount recovered from the physician.
I could go on and on. Again, thank you for your interest.
Thank you for comments and these good articles.I am in a big problem with the insurance companies.I am in UK. Everything you are saying is exactly the same here, but there is a difference…
.Insurance companies are accusing doctors of unbundling when in fact is them bundling and forcing to make huge repayments retrospectivey…If you don’t pay they will suspend you and your whole practice follows.I am an anaesthesiologist, I get a mixture of cases from different companies in a day.I can’t say to the surgeon I do “a” but not “b” but yes “c”. The surgeon will stop working with me… The worst has happened to me…. as they know they may loose in court for their practices they have reported me to the General Medical Council, accusing me of fraud, unbundling…these can have serious implications and destroyed my whole life and career.I am desperate because I am just a small fish against these companies..My family, my wife is very supportive, thank God, but my kid knows I am not the same and he senses how much I am suffering…To make it even worse my wife is pregnant of our second kid and instead of enjoying the pregnancy we are suffering largely…i am having daily nightmares of being derecognize by the GMC, they work “defending” the public from the doctors. This is surrealistic.I have learnt in 2 months something really awful. Anybody can make you feel guilty,it is difficult to keep your head up when you see the insurance companies turning the story to their advantage. Thanks for listening…