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 June 2007
Keeping Up with Regulatory Changes
A recent article in the American Health Lawyers Association HMOs & Health Plans newsletter stated that "in the legislative arena, lobbying by provider groups has been successful in persuading lawmakers to enact pro-provider legislation designed to accomplish by law some, if not all, of the reforms sought by the provider community [through class actions] in court".
The article cited three trends toward pro-provider state legislation:
- Increasing requirements for disclosure of payor policies, including claims payment, pricing, coding and claims payment criteria;
- Even handedness in the procedures and time limits allowed for the provider to file appeals or ask for a payment adjustment compared with the rights reserved for payors; and
- Statements of provider rights and payor obligations which are typically missing from the contract between the provider and insurer
Although these new laws, if passed, may tilt the playing field more in the provider's favor, it is very difficult for time-stretched providers to keep up with all of the state laws regulating their relationships with insurance companies. If the law gives you an advantage but you don't know about it, what good does it do you? Your payors make it a point to know about them.
Here is a quick quiz:
1. Do you know whom you could call at your State Department of Insurance if you had a question about whether an insurer's actions violated insurance laws? Do you have the time?
2. If an unfamiliar insurer approached you for a contract, how would you check to see that it was appropriately licensed in your State? Would you check?
3. Do you know what legislation is currently proposed in your state that could benefit your relationship with insurers?
If you answered "No" to any of these questions, we can help. Health Check maintains strong relationships with many State insurance regulators and provider associations. As part of our Managed Care recovery services, we can help you identify problem insurers and provide guidance on what is required of them.
Modern Arbitration Clauses Place Health Care Providers into Unanticipated Corner
By: Maria Pepe VanDerLaan & David G. Jordan Saxe Doernberger & Vita, P.C. The following article has been abridged. The entire article can be found on Health Check's website or Saxe Doernberger & Vita's website. The opinions expressed are those of the authors, not necessarily Health Check, and should not be construed as legal advice.
Whether to agree to a binding arbitration clause is a critical issue that should be on every healthcare provider's contract negotiation checklist. Unfortunately, these clauses often go unnoticed or are not fully appreciated. The repercussions of such an oversight can be significant. Binding arbitration is not simply a matter of choosing to resolve a disagreement in one arena (arbitration) in lieu of another (court of law). Rather, it is a decision that materially alters the dynamic of the parties' relationship as it imparts significant leverage to the managed care organization.
Current arbitration clauses are being crafted in a manner that curtails available remedies to providers, and further, erects procedural hoops to be jumped through before an issue can be brought to arbitration. What was initially intended to be an efficient and cost-effective alternative to conventional litigation has become a well-crafted deterrent to seeking recourse for unpaid or underpaid services. Furthermore, these arbitration clauses not only impact the cost and scope of relief available to providers, but also effectively negate the ability to seek redress in the court of public opinion. Because arbitrations are not a matter of public record, they do not receive the media "splash" given to court actions, which can act as a deterrent to contractual breach, and an incentive to resolve matters swiftly and appropriately.
The following points further illustrate the various restrictions and problem areas in today's managed care arbitration provisions, and the disadvantages of arbitration to healthcare providers in general:
- Multi-tiered informal resolution pre-requisites. Mandatory pre-arbitration "discussions" are now common conditions of managed care agreements. Pursuant to such requirements, the parties need to wait as long as three months and must meet and confer before submitting their dispute to arbitration.
- Class / Collective action prohibitions. Many arbitration clauses now preclude the filing of class-action claims or otherwise prohibit one healthcare provider from joining in an arbitration with another similarly situated (and aggrieved) provider.
- Cost deterrents. The time involved with the often intricate arbiter selection process and the cost of an arbiter's time, which can be upwards of $400 an hour, has made arbitration a high-cost alternative to the traditional court setting.
- Recovery limitations. Arbitration clauses typically exclude recovery of punitive damages, costs and/or interest. The end result is that a provider is seldom "made whole" by the arbitration process even when it is able to recover what it was originally entitled to be compensated.
- Lack of certainty. There is always a degree of unpredictability when a dispute must be resolved by a third-party. However, unlike the judicial setting, wherein a court is bound by procedural guidelines and legal precedent, an arbiter's discretion can be virtually limitless. Moreover, an arbitrator's ruling is seldom reversible.
- Absence of stare decisis. One of the most distinguishing characteristics of an arbitration proceeding is the absence of stare decisis, meaning "the policy of the court to stand by precedent." Instead, a decision made during one proceeding will not affect the decision in a following, similar proceeding. Thus, an adverse arbitration ruling may not alter the managed care organization's practice, since a future arbitration will begin with a clean slate.
- Impact on managed care behavior. If managed care organizations know that their actions are not likely to be readily challenged due to the expensive, multi-step process of arbitration, or scrutinized by their shareholders or the public at large, it creates a disincentive to strictly adhere to contractual obligations.
As the above examples illustrate, binding arbitration clauses should not be ignored. Alternative dispute resolution, such as arbitration, is always available to parties of a contract; it need not be specifically referenced, or made a mandatory requirement. However, when it becomes binding and replete with additional restrictions, it is no longer a tool for parties to efficiently resolve disputes, but rather a shield for one party against a bona fide dispute of the other. While it could be argued that the terms of these arbitration clauses apply equally to all parties to the agreement, they undoubtedly tilt in favor of the managed care organizations as they are the authors of the language. Therefore, providers should pay close attention to these clauses and, more appropriately, should take measures to minimize administrative hurdles and limitations upon otherwise available remedies, before agreeing to sign on the dotted line.
Computer Software vs. Manual Auditing
In response to questions from our clients regarding the use of software to identify underpayments vs. manual auditing services, Health Check has published a Client whitepaper on the subject.
The whitepaper discusses the pros and cons of both methods, and outlines how a hospital can implement a successful auditing strategy utilizing a combination of the two.
The whitepaper is available online at our website, or by contacting Chuck Fullet, Director of Client Relations at 800.633.2055.
CMS Softens Stance on NPI Implementation
CMS has extended the May 23 deadline that had been set for family physicians and all other "covered entities" to begin using their National Provider Identifiers, or NPIs, on health insurance claims.
In an April press release, CMS Acting Administrator Leslie Norwalk said that covered entities that have shown a "good faith" effort to comply with the NPI provisions would have up to 12 months to implement a contingency plan that could include accepting legacy provider identifiers, also known as Unique Physician Identification Numbers, or UPINs.
The NPI, which was instituted as part of the Health Insurance Portability and Accountability Act, is a 10-digit, numeric identifier administered by CMS. It is designed to give each health care provider a single, unique identifying number that doesn't change or expire. Providers not in compliance by the original deadline were facing delays and possible claim rejections.
CMS extended the deadline when it became clear that many covered entities would not meet the original deadline. CMS said contingency plans would not extend past May 23, 2008.
As of March 26, more than 1.9 million care providers had acquired NPIs, but many providers' software systems can't accept the numbers without software upgrades.
Click here for more information on the CMS NPI contingency plans.
Budget Killers
When preparing your annual budget do you factor in projected underpayments of managed care payors? If not, you are short changing the hospital's bottom line. Many healthcare providers ignore underpayments and often treat it as bad debt and just zero balance the account and put minimal effort into collecting these underpayments.
Most facilities run on single digit margins, which can have a negative impact on bond ratings for projects like future construction and when upgrading technology- not to mention the strain it places on cashflow.
Health Check can help you collect most of your managed care underpayments without requiring a capital investment or stealing precious time from your staff. Our dedicated auditing and recovery team specializes in helping you keep what you have earned. We are so confident in our ability to find you money that we provide our services on a 100% contingency basis.
We invite you to take a look at how we can help raise your bottom line and to help keep it there.
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