New England’s last holdout to limit clawbacks finally passes law

By Janine Weisman
October 9th, 2019

claim deniedHealth insurance companies now have a 12-month window to retroactively deny claims they already paid for mental health and substance abuse services in Massachusetts.

Language imposing the time restriction on so-called clawbacks was included in the final fiscal 2020 state budget signed into law by Gov. Charlie Baker on July 31. The budget incorporated language from bills in the Senate and House of Representatives that sought to end what mental health providers have long considered an unfair business practice.

No time limit for clawbacks previously existed in Massachusetts, while other New England states had laws requiring health plans to initiate efforts to recoup payments within either 12 or 18 months after a patient receives services.

That meant health plans could retroactively deny payments two years or more after a provider treated a patient. Reasons for doing so could include a later determination that a patient was not covered at the time of services or that treatment was excluded or medically unnecessary or that a duplicate claim was submitted.

Restricting clawbacks had been a top priority for the Massachusetts Psychological Association (MPA) for at least seven years but past efforts had sought a six-month time limit. That drew opposition from the Massachusetts Association of Health Plans (MAHP), which represents 17 health plans covering more than 2.8 million Massachusetts residents.

This has been a long haul,” said MPA Director of Professional Affairs Jennifer Warkentin, Ph.D., who testified last May in support of anti-clawback bills at the Statehouse before the Joint Committee on Financial Services.

The turning point occurred during hearings during the 2017-2018 session when insurers who once voiced complete opposition to any timeline refocused their opposition to the six-month duration, Warkentin said. A proposal to support a 12-month limit was part of health care reform legislation that failed to get through committee at the tail end of the session.

The momentum was still there when the 2019-2020 session began, Warkentin said.

Earlier this year, Rep. James J. O’Day (D-West Boylston) sponsored another House bill proposing the 12-month time limit on insurers. Sen. Cindy F. Friedman (D-Arlington), co-chair of the Joint Committee on Health Care Financing, sponsored the companion bill in the Senate.

Because everyone came together and agreed on a compromise there wasn’t strong opposition and that allowed it to move more quickly through the Legislature,” Warkentin said. “It made it easier to include it in a budget because it wasn’t a controversial bill anymore.”

We believe this compromise strikes an appropriate balance – permitting both the health plan and the provider time to review the appropriateness of the claim, correct any errors, and conduct audits as required by federal and state agencies,” MAHP President and CEO Lora Pellegrini said in a statement emailed to New England Psychologist.

Under the new law in Massachusetts, a retroactive claims denial may be allowed after 12 months if the claim was determined to have been submitted fraudulently or is the subject of legal action. Other exemptions include if the claim payment was incorrect because the provider or the insured was already paid for the health care services identified in the claim or if the health care services in the claim were not delivered by the provider.

O’Day said legislators were concerned the threat of clawbacks would discourage behavioral health providers from entering the field or practicing in Massachusetts.

We really were able to argue that we want to have high quality behavioral health providers here in the Commonwealth,” O’Day added. “They’re not going to continue to practice here if they’re not going to be able to get paid. The advocates did a great job of pressing that forward.”

Friedman said via email that she was thrilled that clinicians were now protected from “unreasonable payment clawbacks.” The law will ensure a transparent process is in place, she added.

Placing limits on insurance companies’ ability to retroactively clawback payments from providers for mental health and substance use disorder services delivered is a reasonable and important step we can take as we continue to fix our broken behavioral health care system in Massachusetts,” Friedman stated.

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One Response to New England’s last holdout to limit clawbacks finally passes law

  • August 7th, 2021 at 6:18 pm Joel Hencken posted:

    This is a very good thing. I have had more than one situation over the past 30+ years in which I was docked several thousand dollars for mistakes that were not mine. I remember asking, “How come when I make a mistake, I pay for it; and wnen you make a mistake, I pay for it??”

    But the companies will now no doubt simply change strategies and press for making providers prove medical necessity.

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