Payers won't pay? Know your contract's remedies

Contract Language. By Steven M. Harris, AMNews contributor. Sept. 5, 2005.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Recently, a physician contacted me regarding a payment dispute his group practice has with a payer. The group continually receives late payments for all claims submitted, and the payer has now begun to deny payment.

This has placed a huge burden on this practice's cash flow. While it is always in the best interest of physicians to resolve payment disputes under managed care contracts as quickly as possible, the reality is that these managed care/physician disputes often require a lot of effort, resources, and time to resolve.

Systematic delay and underpayment of claims by payers creates cash-flow problems for physicians, who are then forced to expend substantial resources to pursue the correct payments. As any physician knows, payers have used several strategies to deny health care professionals the appropriate reimbursement, including bundling, downcoding, application of the wrong fee schedule, and refusing to recognize modifiers.

Payers also frequently deny claims based upon medical necessity.

The best strategy for resolving these disputes is to read and understand your managed care contracts, which spell out how the plan settles disputes.

Most managed care contracts require the physician to seek written review of the denied or underpaid claim. Make sure you specifically review any provisions that relate to the period for seeking review by the payer, the documentation required by the payer to seek review, and the address and title of the person to whom to direct the appeal or review.