When a managed care insurance company recoups payments previously made to health providers for services rendered, it’s called a clawback.
outh Shore Mental Health President and CEO Harry Shulman, LICSW, calls it an “administrative disaster.”
That’s what the head of the Quincy, Massachusetts-based agency that delivers education, behavioral health treatment and recovery services to about 16,000 clients annually from Boston to Cape Cod says it’s like to go back and reconcile billing accounts after reimbursements are electronically taken back.
In the last months of 2015, South Shore Mental Health had about $75,000 in payments for providing outpatient individual therapy services reclaimed by insurers, Shulman told lawmakers at a Dec. 8 Statehouse hearing.
“Some of these go back a year, a year and a half, and their position was at the time we provided the service they were not responsible for that client or clients because they were assigned or selected another insurer,” Shulman said.
Providers determine if a client is covered for services by checking the MassHealth Eligibility Verification System. But that system is not always reliable as MassHealth members can change their insurers at any time, unlike commercially insured individuals who can change insurers only once per year.
Other reasons for recouping payments could be a determination that services were excluded or medically unnecessary or the discovery of errors such as a duplicate submission of the same service or claim.
So South Shore Mental Health must comb through its own individual claims, take out payments made and then re-bill a different plan now deemed responsible at the time services were delivered, Shulman said.
“We run into a catch-22 because it would not be timely filing at that point,” Shulman said.
There is no time limit in Massachusetts for insurance companies to retroactively deny claims they already paid. But a House bill sponsored by Rep. James J. O’Day (D-West Boylston) seeks to impose a six-month limit for recoupment of health insurance claims for mental health and substance abuse services.
The bill H.925 was the subject of the Dec. 8 hearing before the Joint Committee on Financial Services.
The bill places no time limit on taking back payments for demonstrated cases of fraud.
O’Day said he focused specifically on mental health and substance abuse treatment rather than all health services because advocates for these providers had contacted him for help.
“I think that a six-month period is reasonable whereas currently they can go back two and three years,” O’Day said. “I just see it as really a fairness issue and an issue of wanting to make sure that we can continue to have good quality therapists, clinicians and that people who are in that field are going to be able to provide their services.”
But a six-month limit would mean Massachusetts would have the shortest recoupment time in New England. Connecticut, Rhode Island and New Hampshire give health plans up to 18 months to initiate recovery efforts after initial payment for a health service is received by a provider. Vermont and Maine allow 12 months.
A six-month limit is still two to three times longer than the typical 60-90 days providers have to submit claims, said Michael Goldberg, Ph.D., past-president and director of professional affairs for the Massachusetts Psychological Association. He testified in favor of H.925 at the Statehouse hearing.
“They have an obligation to have the information correct in their system,” Goldberg said. “The problem is that we as providers are completely dependent on what they tell us.”
Goldberg said clawbacks happen multiple times a year in his practice, often in batches and often for assessment services.
“What we’re saying is it’s not the provider’s fault that you have it wrong. You can get the money back but you should get it directly back from their health plan, not from me.”
The Massachusetts Association of Health Plans is opposed to H.925. The association which represents 17 member health plans covering approximately 2.6 million Massachusetts residents says it would unnecessarily add to the cost of coverage.
State law requires insurers to pay claims within 45 days of receipt or be subject to interest penalties of 18 percent, so plans routinely review and scrutinize paid claims, said Eric Linzer, the association’s senior vice president of public affairs and operations.
He added that employers can take up to 90 days to notify a plan if a member is no longer eligible for coverage. That can delay the disenrollment process.
“There really is an obligation on both the provider and the consumer to make sure that there’s accurate information given at the time of the service,” Linzer said.
A six-month time frame is “significantly onerous,” Linzer said.
“Time periods are something that plans and providers have and can certainly negotiate in the course of normal contracting. It’s not something that state government should get involved with,” Linzer said.
The Joint Committee on Financial Services has until March 16 to issue a report on H.925. The committee can either release the bill favorably or declare more research is needed before a decision can be made.
By Janine Weisman