Why litigation may be the best option in Maryland to recover denied claims
Since its inception in 1997, Maryland’s HealthChoice program has expanded to provide healthcare coverage to a majority of Maryland’s Medical Assistance (“Medicaid) recipients. Through its HealthChoice program, the Maryland Department of Health contracts with Medicaid Managed Care Organizations (“MCOs”) to provide health benefits coverage to Medicaid recipients.
Given the scope of the HealthChoice program, many providers will be compelled to contract with an MCO to treat its members in the practice. Many of these providers will suffer the frustration of an MCO denying a claim for medically appropriate services. While most of these disputes may be resolved through the MCOs internal appeal process, some require outside adjudication. As discussed below the process for administratively resolving payment disputes is murky at best, and often requires litigation.
There are three potential paths for resolving payment disputes with MCOs: 1) filing a complaint with the Maryland Insurance Administration (“MIA”); 2) filing a complaint with the Maryland Department of Health (“MDH”); and 3) litigation in a Maryland court.
Pursuing these disputes administratively before the MIA or MDH may appear to be the best and least costly choice. MDH has issued guidance that its sister entity, the MIA, has jurisdiction to adjudicate certain claims payment violations of the Maryland Insurance Article, particularly certain payment disputes. Therefore, payment disputes predicated on a violation of the Maryland Insurance Article could reasonably be expected to be resolved by the MIA. Alternatively, since Maryland’s Medicaid HealthChoice program is operated by MDH, one would expect there to be an administrative remedy through the MDH.
However, both options often fail to resolve the dispute. Despite the guidance from MDH regarding MIA jurisdiction, the MIA continues to deny that it has jurisdiction over MCOs. Typically, the MIA will refer such complaints to the HealthChoice program. Once the complaint is forwarded to the HealthChoice program, MDH maintains that it no longer provides billing adjudication to resolve disputes between providers and MCOs.
With no path to administratively resolve payment disputes through the MIA and MDH, litigation becomes the only viable option. However, litigation is not without its challenges. Specifically, MCOs have historically argued that payment disputes based on violations of the Maryland Insurance Article have “primary jurisdiction” with the MIA, and consequently, providers must exhaust their administrative remedies prior to filing a lawsuit. By basing lawsuits on breaches of contract and by considering the MIA’s view of its own jurisdiction, our firm has successfully overcome such arguments.
Regardless, know that providers have recourse for resolving payment disputes, even in cases where there is no contract. However, a good rule of thumb is to ensure that you have a written contract with managed care plans covering your patients. Having a written contract provides a foundation for resolving payment disputes where administrative remedies are not available. By exercising their rights to reimbursement, healthcare providers are able to defend against improper denials and create opportunities to eliminate unfavorable contractual terms.
Anderson & Quinn, LLC is a law firm based in Rockville, Maryland, providing individuals, businesses, corporations, and healthcare institutions with the legal and litigation support they need to protect revenues.
Mr. Jason Anderson is an associate at Anderson & Quinn, LLC, 25 Wood Lane, Rockville, MD, 20850. Tel: 301-762-3303. Email: janderson@andersonquinn.com.
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