Refunds

Im not talking about the overpayments made to an account where you should return the overpayment amount back to the patient or insurance company.

The refunds Im talking about are the demands for the return of money from an insurance company made many months or years after the payment was made. The reasons made are many, from a retroactive denial of benefits to the patient has other insurance that is or was primary.

This weekend, I received a refund demand from a major insurance company wanting the payment back. The patient was seen in 2004 and the payment was made in 2004. Their reason for the refund is they performed a retroactive denial of benefits.

My first step was looking at the type of plan. This was commercial insurance, so my next step was cecking my State Commercial Insurance Law. I found Florida Statute 627.6131. Now not all States have laws for commercial insurance and a separate law for HMO insurance, but, Florida is one of them. Texas is another. As a layperson, when looking at FS 627.6131, I see that the insurance company has 30 months from the date of payment to submit a claim for an alleged overpayment. This was 60 months, so I had the ability to deny their claim for timely filing. I also denied based on the Doctrine of Laches.

Per the Lectric Law Library, The Doctrine of Laches is based on the maxim that equity aids the vigilant and not those who procrastinate regarding their rights; Neglect to assert a right or claim that, together with lapse of time and other circumstances, prejudices an adverse party. Neglecting to do what should or could, have been done to assert a claim or right for an unreasonable and unjustified time causing disadvantage to another.

Laches is similar to 'statute of limitations' except is equitable rather than statutory and is a common affirmative defense raised in civil actions.

Laches is derived from the French 'lecher' and is nearly synonymous with negligence.

In general, when a party has been guilty of laches in enforcing his right by great delay and lapse of time, this circumstance will at common law prejudice and sometimes operate in bar of a remedy which is discretionary for the court to afford. In courts of equity delay will also generally be prejudicial.

I responded with the following letter (Cleansed to protect HPI). The letter was sent to the President of the insurance company

We are in receipt of your company’ claim for an alleged overpayment for your member, , XXXXXXX who was treated in the emergency room at XXXXXXX on June 25, 2004. The emergency medical care was rendered in good faith and in accordance with all applicable State and Federal Laws. Ms. XXXXX, represented that she had health care coverage through your company. In good faith, using this information, we submitted a claim, on Ms. XXXXX’s behalf, in a timely manner. Your company processed this claim and, in 2004, your company issued a payment of $102.00. This payment was applied to Ms. XXXXX’s medical debt.

Your claim for an alleged overpayment states that your company has performed a retroactive denial of membership. Why your company elects to wait five (5) years to deny heath benefits is unknown and appears to be prejudicial to providers. If you read Florida Statute 641.6131 (6), you can see that it states the following:

6) If a health insurer determines that it has made an overpayment to a provider for services rendered to an insured, the health insurer must make a claim for such overpayment to the provider's designated location. A health insurer that makes a claim for overpayment to a provider under this section shall give the provider a written or electronic statement specifying the basis for the retroactive denial or payment adjustment. The insurer must identify the claim or claims, or overpayment claim portion thereof, for which a claim for overpayment is submitted.

(a) If an overpayment determination is the result of retroactive review or audit of coverage decisions or payment levels not related to fraud, a health insurer shall adhere to the following procedures:

1. All claims for overpayment must be submitted to a provider within 30 months after the health insurer's payment of the claim. A provider must pay, deny, or contest the health insurer's claim for overpayment within 40 days after the receipt of the claim. All contested claims for overpayment must be paid or denied within 120 days after receipt of the claim. Failure to pay or deny overpayment and claim within 140 days after receipt creates an uncontestable obligation to pay the claim.

(6) If a health insurer determines that it has made an overpayment to a provider for services rendered to an insured, the health insurer must make a claim for such overpayment to the provider's designated location. A health insurer that makes a claim for overpayment to a provider under this section shall give the provider a written or electronic statement specifying the basis for the retroactive denial or payment adjustment. The insurer must identify the claim or claims, or overpayment claim portion thereof, for which a claim for overpayment is submitted.

(a) If an overpayment determination is the result of retroactive review or audit of coverage decisions or payment levels not related to fraud, a health insurer shall adhere to the following procedures:

1. All claims for overpayment must be submitted to a provider within 30 months after the health insurer's payment of the claim. A provider must pay, deny, or contest the health insurer's claim for overpayment within 40 days after the receipt of the claim. All contested claims for overpayment must be paid or denied within 120 days after receipt of the claim. Failure to pay or deny overpayment and claim within 140 days after receipt creates an uncontestable obligation to pay the claim.

The fact that your claim has been submitted at least five (5) years since the 2004 date of payment, we are denying your claim for untimely filing. You are free to seek reimbursement from Ms. XXXXX.

Any future claims will be sent to the Florida Department of Insurance Regulation for investigation of possible violation of Florida Laws. We will also forward them to the United States Department of Labor and Internal Revenue Service.

Sincerely

If we had any claims with this insurance company, I would have informed them that they are prohibited from performging a take back or offsetting a claims payment, which is also addressed in FS 627.6131 and 641.3155.

If Florida had NO law outlining a timeframe, I would have denied this based on the Doctrine of Laches.

Now, why would this be prejudicial to the provider? The timeframe prevents the provider from submitting a claim to another insurance company. The patient may have moved in the past 5 years and is unable to be contacted. Last, the statute of imitations to file suit against the patient, if one is elected to be made, is 4 years.

If the insurance company says the patient had other insurance, I make a demand they they provide proof of this. THis is simplu becaue Florida's Statute allows me to do this. Please understand that I am NOT a lawyer. I read the laws as a layperson and I make a resonable layperson interpretation using common sense, but it makes common sense that if the insurance company has 30 months to submit their claim, you dont have to work for NASA to interpret 30 months into something different.

Some insurance companies use professional debt collection agencies to perform refund demands. Some of these companies can be very aggressive with trying to collect the money. With some debt collection agencies, the agent calling makes their money based on wat they individually collect, so some debt collectors can be abrasive and abusive. I personally dont talk to these people. I respond in writing and my responses are sent Certified Mail/Return Receipt. You want to prevent the we never got your letter excuse. In addition, if you have to file complaint or lawsuit, you have proof that you sent your response and it was received. This is because the peponerance would be on your to make your case. If youve ever watched Peoples Court, youve heard Judge Wapner say that the people brining he lawsuit was responsible for the preponderance of the evidence. The insurance company or debt collection agency can say you never responded to them. You show the certified receipt and return receipt. Now the judge looks at the insurance company or debt collection agency and smiles and says, explain why you say you never got a response.

Ive had insurance companies tell me that we have to pay them the money back. They say the law say that when they make a demand, we have to respond with payment. Some will say that per Senate Bill XXX, we have to pay them. I used to watch Saturay morning TV and I know the I am a Bill on Capital Hill song. A bill is NOT a law unless signed into law by the President or State Governor (with State Bills).

If your doctor is contracted with the insurance company, you need to check the contract to see what it says about overpayments. The provider may hve agreed to a section of the contract that allows the insurance company to make automatic takebacks. If this is so, there isnt much you cn do when you see that your claim was paid $0.00 and when you call the insurance company, you are told that the payment was offset to cover a refund demand on another patient.

If it is absolutely necessary to return the money, I do the same as the insurance company does. I make an offer to offset the refund emand against a very old claim that remains unpaid. SOme have told me that this is an accounting nightmare, but (1) the povider isn't writing checks an giving money back and additionl money isnt being spent trying to collect on the unpaid claim. Its not an accounting nightmar if done correctly and properly recorded and documented.

Know your provider contracts and State Laws. If there is a timeframe to file a claim and the insurance company submitted the claim in an untimely manner, you should have the ability to deny their claim for timeliness. If there is a pattern, file a complaints wit you State Insurance Commissioner.

With Medicare, communicate with Medicare on all requests received. Per the Social Security Act, Medicare has 6 years to make a refund demand.

I'm just a bill
Yes, I'm only a bill
And if they vote for me on Capitol Hill
Well, then I'm off to the White House
Where I'll wait in a line
With a lot of other bills
For the president to sign
And if he signs me, then I'll be a law.
How I hope and pray that he will,
But today I am still just a bill.