To Avoid Untimely Filing Denials, All Potential Payers Must be Billed Initially, Especially with MVA and MCO Accounts.
One situation referred to my practice is a contracted provider fails to initially bill all potential payers. As a result, they must write off the entire unpaid balance for the technical denial of untimely filing.
This problem occurs mostly in two scenarios:
- The patient is involved in a motor vehicle accident; or
- The patient is covered by a commercial health plan and a Medicaid HMO (“MCO”).
Since both scenarios are not mutually exclusive, ER physician practices and hospitals are especially prone to untimely billing in the coordination of benefits context. While this issue can happen for any patient covered by two or more health plans, claims for patients involved in automobile collisions are often high dollar, and thus high risk.
Example:
The patient receives emergency services and is eventually discharged for injuries associated with a motor vehicle collision. The hospital promptly confirms the patient has coverage with Cigna’s commercial (employer-based) health plan and also with United Healthcare’s Medicaid HMO product (“MCO”).
Knowing that Medicaid is the payer of last resort, the hospital realizes the MCO is not responsible and does not bill the claim to the MCO. In fact, if the MCO were to pay anything at all, it would only be after the commercial plan pays – and the MCO usually covers less and pays less. So, the hospital does not bill the MCO.
The treatment source on the claim form is properly listed as a motor vehicle accident and Cigna is billed, well within the 180 day contractual filing limit. Cigna responds within 30 days of receipt, advising that it needs an Exhaustion of Benefits notice from the patient’s no-fault policy issued by the driver’s automobile insurance carrier. Without questioning the validity of Cigna’s request, the provider’s billing staff makes sure the claim is billed to the driver’s automobile insurer. The automobile insurer’s EOB states the patient’s lost wages were paid first and anyway the no-fault policy covers only $2,000 per incident. There are no more funds available to pay the hospital. The facility then paper-bills Cigna attaching the zero-payment Exhaustion of Benefits notice from the auto insurer, expecting payment in full from Cigna
However, under Cigna’s commercial health benefit plan, the patient is required to return to Cigna a completed accident questionnaire. The questionnaire provides details of the accident and executes a subrogation agreement that authorizes Cigna to collect against any recovery obtained from the responsible third party who caused the collision. By that time, the patient has retained counsel, and the attorney advises his client not to sign the subrogation form. More than six months has gone by since the accident. Cigna is not, and never was, responsible for payment, since the patient’s contract with Cigna requires transfer of rights when a third party is responsible.
The hospital, now, looks to the patient, but the business office director knows the patient has coverage through United Healthcare’s Medicaid HMO. One year after the service date, the hospital bills the MCO. United Healthcare denies the claim for untimely billing and Medicaid beneficiaries are rarely responsible to providers for denied claims for covered services.
This is a quintessential example of why a provider should bill all potential payers at the start. An ounce of proactivity avoids the pound of cure. This situation can be remedied through the assistance of legal counsel, but the outcome is uncertain and costly.
Hospitals and ER doctors cannot and should not have to try to predict whether a payer should pay. Rather, the claims should be billed to all identified potentially responsible health plans. If an overpayment occurs, then work with the health plans to figure out who should be refunded. A claim should never be left unbilled or denied as untimely merely because the billing staff believed that another payer was primary. Generally, within 45 days of discharge, all payers should be billed. If additional information is later required by the payer, then the claim will not be procedurally denied for untimely billing. The business office can reasonably believe, but never be sure until after billing, that a claim will not be paid. Remember, sometimes refunds may need to be given, but billing must first be done.
Anderson & Quinn, LLC is a renowned law firm based in Rockville, Maryland, providing individuals, businesses, corporations, and healthcare institutions with the legal and litigation support they need.
