Should physicians be left holding the bag when a private insurer retroactively denies a medical claim or recoups a payment? A federal appeals court is considering a case that could determine whether medical providers have recourse in such situations to ensure that their practices remain financially stable so they can continue caring for their patients.
At issue in Pennsylvania Chiropractic Association v. Independence Hospital Indemnity Plan, Inc., is the payer retroactively denying benefits or taking back payments without explaining why the action was taken or how the medical provider can appeal the decision.
“The decades-long dispute continues between medical providers and the … third-party payers … of Employee Retirement Income Security Act (ERISA)-regulated health plans over whether providers should be paid for their services, and how providers can assert their right to receive payment,” the Litigation Center of the AMA and State Medical Societies and the Illinois State Medical Society said in an amicus brief recently filed with the court.
“Unsurprisingly, the position Independence Hospital Indemnity Plan takes would result in … medical professionals performing necessary medical services and then being left ‘holding the bag,’” the brief states.
The plaintiffs are seeking to make the payer bring its post-payment protocols in line with ERISA, a federal law that sets minimum standards for private health insurance plans. Under ERISA, plans must provide important benefits information and appeals processes for beneficiaries.
Lower courts concluded that in-network health care providers can be treated as ERISA beneficiaries because the health plan pays them directly—and those payments constitute benefits. The case is one of the first times a court has had to address whether direct payment to a provider makes the provider a beneficiary.
“Since retroactive denials of claims and recoupments are functionally identical to an ‘adverse benefit determination,’ ERISA entitle[s] plaintiffs to notice of the reasons for those denials and the right to a ‘full and fair review’ of those denials,” the brief argues.
Read more about this case and other cases related to physician payment on the Litigation Center Web page.
