A proposed six-month limit on the ability of insurance companies to retroactively deny claims for mental health and substance abuse services has advanced in the Massachusetts Legislature.
Language to impose the limit was included in an amendment in the comprehensive health care control bill that passed the Senate in early November 2017.
The measure seeks to restrict managed care insurance companies from recouping payments already made to health providers for services rendered. The practice is known as a clawback, and it can happen when a later determination is made that a patient was not covered at the time of services or that services rendered were excluded or medically unnecessary.
Other reasons include the discovery of errors such as a duplicate claim submission.
No time limit for clawbacks exists now in Massachusetts, which means health plans can retroactively deny payments many years after a patient receives services.
The proposed language would permit retroactive claim denials after six months in cases where a claim was determined to have been submitted fraudulently or the claim is the subject of legal action.
The effort to restrict clawbacks began several years ago and was the top priority for the Massachusetts Psychological Association this legislative session.
MPA Director of Professional Affairs Jennifer B. Warkentin submitted written testimony last May before the Joint Committee on Financial Services in favor of Senate Bill 582, sponsored by Sen. Michael J. Rodrigues (D-Fall River) and its companion House Bill 2193 sponsored by Rep. James J. O’Day (D-West Boylston).
Warkentin noted that for-profit corporations that manage behavioral health services for Massachusetts health plans typically require providers to submit claims for all services within 60 to 90 days and refuse to pay claims submitted late, no matter the reason. Yet they face no time limits when it comes to retracting payments for claims.
“I am often contacted by psychologists who have experienced a retraction of payments due to the corporation’s mistake of paying for certain services that the corporation later learns they were not in fact responsible for,” Warkentin wrote in her testimony.
She added that insurers can conduct audit records at any time to find instances when another plan should have been the primary payer.
“Essentially, the corporation verified coverage for a member and only later discovered that it was a mistake. To retract those funds from a provider, who verified coverage at the time of service and who would have no way of accessing the information to discover the mistake, is a classic example of unfair business practices,” Warkentin stated.
The Massachusetts Association of Health Plans (MAHP), which represents 17-member health plans covering approximately 2.6 million Massachusetts residents, opposes time limits on recoupments.
“What this bill will do is severely hinder the ability of the plans to ensure that the appropriate care is provided to the correct individual,” said MAHP Executive Vice President Eric Linzer.
“Much of this should be left to the contracting process between health plans and providers, rather than setting arbitrary deadlines and time frames into statute.”
At least 24 other states impose some time limits for insurers to retroactively deny or adjust claims. But six months would make Massachusetts the most restrictive state in New England.
Connecticut, New Hampshire and Rhode Island impose a limit of 18 months. Maine and Vermont impose 12-month limits.
SEIU Local 509 brought together mental health clinicians in private practice for a campaign called CliniciansUNITED with members testifying last May before the Joint Committee on Financial Services. Participants included Jen Erbe Leggett, LICSW, psychotherapist and director of The Leggett Group in Roslindale, Massachusetts.
“Besides the low rates that we get paid, the fact that insurance companies can claw back payments based on errors on their part or errors on an employer’s part and not having anything to do with what a provider has done just honestly keeps me up at night,” Leggett said.
“That means that I can never close my books once I’ve already paid my staff people and we’ve given treatment in good faith and done all the required authorization checks and clinical authorization checks.”
Language from Senate Bill 582 was added through an amendment to what is now Senate Bill 2211, the health care cost control bill sent to the House Committee on Ways and Means.
Senate Bill 582 is still listed as pending before the Financial Services committee, which has until Feb. 7 to dispose of it. But the House Ways and Means Committee is exempt from that deadline and technically has until the end of the formal session on July 31, to take action. If none is taken before then, both chambers will have to tackle the issue again in the 2019-2020 legislative session.
Added Brian Doherty, MPA executive director, “Limiting clawbacks is one of the MPA’s top priorities. When Senator Rodrigues introduced the anti-clawback bill text as an amendment to be added to the Senate health care bill, we immediately responded with an advocacy campaign through which MPA members contacted their Senators to ask them to support the amendment. Many members of the Mental Health Coalition, which includes both provider and consumer health organizations including MPA, also sent a joint letter to Senate Leadership as the amendment was being considered. These actions helped lead to approval of the anti-clawback amendment so that it was included in the bill, which passed the Senate. We will continue to advocate for limiting clawbacks as the House of Representatives and the Joint Committee on Financial Services consider the issue.”