Faulty Authorizations and Take-Backs

February 1, 2008

Being a general surgeon, I usually obtain preauthorization for procedures. An insurer paid me after a recent surgery, but a few weeks later, it requested a refund, claiming the patient was no longer covered by the employer. I performed the procedure because it was authorized; I have been unable to contact the patient to pay. Do I have a right to refuse the refund to the carrier? What should I do?

Question: Being a general surgeon, I usually obtain preauthorization for procedures. An insurer paid me after a recent surgery, but a few weeks later, it requested a refund, claiming the patient was no longer covered by the employer. I performed the procedure because it was authorized; I have been unable to contact the patient to pay. Do I have a right to refuse the refund to the carrier? What should I do?

Answer: I would pursue the issue with the payer. Show that you got pre-authorization. Review your contract with the payer to see the exact terms of what you are obliged to refund and what security it provides for its preauthorization services. Is there a more up-to-date preauthorization process it can suggest?

Play it out. Paying you and then pursuing a refund isn’t in the payer’s best interest either, so it may be motivated to help you find a better way. You may end up having to pay it back. Many payers do not promise that their preauthorizations are iron-clad.

Capture as much information as you can when you get the preauthorization: a number, a person’s name, the date and time.

You can also try to change terms in payer contracts when renewing, insisting that payers stand by their preauthorizations, or at least limiting the length of time they have to request a refund or take-back.