As many know, out-of-network providers have much different appeal rights with commercial plans than in-network providers. It is important to understand each health plan’s appeal procedure as well as time requirements for an appeal may vary. However, the appeal process is still one of the most important tools providers have to get paid in the current environment of reduced reimbursements, caps on the number and frequency of services, bundled payments based on specific codes, delayed payments, daily errors in claims processing leading to denied claims, claw backs, and the list goes on.
Cigna recently sued a Texas hospital, Humble Surgical for overpayments. Humble Surgical is an out-of-network (OON) provider. Cigna alleged fraudulent billing practices and that the hospital engaged in a scheme to defraud payors by waiving members’ financial responsibility.
While the suit involved many other allegations our article focuses on the arguments Cigna made on failure to collect co-payments, deductibles, and co-insurance and fee-forgiving practices by the hospital. There were several other issues raised that are important to various practices that Cigna has engaged in with out-of-network providers. Cigna has consistently audited South Florida providers alleging failure to collect patient financial responsibility or fee-forgiveness, then informing the provider that it was not entitled to any reimbursement because these practices fell within the exclusionary language of the member’s plan.
The suit brought under federal law, ERISA and also Texas common law seeking reimbursement for all overpayments. Cigna was seeking equitable relief including imposing a lien or constructive trust on fees paid to the hospital.
Humble Surgical counter sued against Cigna for nonpayment of patients’ claims, underpayment of certain claims and delayed payment of all claims in violation of ERISA, including other causes of action. Here’s what happened:
Cigna just announced it is withdrawing from Florida’s Health Insurance Marketplace. As reported by Carol Gentry in Health News Florida, Cigna blamed its decision to withdraw on fraud and abuse and on “out of network substance abuse clinics and labs.” Interestingly, Cigna spokesman, Joseph Mondy, pointed to a recent article in the Palm Beach Post (“Addiction Treatment Bonanza: How urine tests rake in millions”) in support of Cigna’s announcement.
Media reports regarding the treatment industry and Cigna’s announcement go unquestioned by reporters. For instance, the Palm Beach Post article claims “the sky-high charges have exploited addicts and alcoholics seeking help, gouged insurers and spurred law enforcement interest….” It pictures a young, tattooed man as a recovery business owner, but does not mention any wrongdoing or charges against him. It restates claims in a lawsuit against a toxicology lab without any counterbalancing input from the lab that is the subject of the lawsuit. It expresses certainty that insurers are being gouged, but does not mention that the rates actually paid by insurers for out of network services are determined entirely by the insurers, not the treatment providers. It’s an article full of allegations and innuendos, but no meaningful coverage of any of the issues.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
By: Karina Gonzalez
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