Health Insurers Using Sneaky Tactics to Intimidate Physicians

Last week, I covered what I consider to be a sea change in insurance claims handling strategy. If you receive unusual letters from insurance companies, you are not alone. Zone Program Integrity Contractors (ZPICs) have requested odd items for you to produce, such as inspection of your contracts, sign-in sheets, books, charts, or the names of your employees and their credentials. You can bet the company is searching for a way to save money at your expense.

What’s going on here? There was a time when the relationship between payers and providers was much more civil. These days, there seems to be a race to the bottom, to see which insurance contractor can strike the lowest below the belt.

The following are some of the more creative methods of intimidating providers:

The "re-credentialing trap"
This is a sneaky tactic borrowed from state medical licensing boards. Many times, a physician or an applicant for a license will be accused of some bad act for which he was investigated, but never prosecuted, often from many years prior.  When the time comes to apply or renew a medical license, the applicant or physician unfortunately omits the episode in his application.  His license is denied, or he is disciplined, not for the actual bad act, but for failing to provide truthful answers in the application.

Insurance carriers are picking up on this tactic. Instead of licensure applications, they are using the credentialing, or re-credentialing, process to trap physicians.  Recently, one provider singled out a class of providers for what it termed "heightened credentialing."  The carrier had information that certain providers were waiving copayments, which I warned about in an earlier post. Rather than deal with the possible reasons why the copayments were forgiven, the carrier sought to terminate the provider for failure to disclose the fact that copayments were sometimes forgiven.

"Give us all your contracts." 
According to the Medicare Program Integrity Manual, auditors are supposed to target specific items for investigation. For example, Medicare administrative contractors (MACs) are authorized to initiate a targeted provider-specific prepayment review "only when there is the likelihood of sustained or high level of payment error." In which case, "MACs are encouraged to initiate targeted service-specific prepayment review to prevent improper payments for services identified by [Comprehensive Error Rate Testing] CERT or recovery auditors as problem areas, as well as, problem areas identified by their own data analysis."

Recently, ZPIC contractors have requested physicians produce every business contract with anyone, the names of every employee, a list of every place a physician works, even a list of all equipment serial numbers. Apparently, the government is compiling a huge database of information which can then be cross referenced. As with the "re-credentialing trap," this may mean that providers could be excluded or penalized, simply for forgetting to include a contract, or place of work, or serial number of a piece of medical equipment.  At this point, nothing would surprise me.

The "Sunshine Act" on Steroids: Fingerprinting
The Affordable Care Act Final Rule, which includes the "Sunshine Act," requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered by Medicare, Medicaid, or the Children's Health Insurance Program (CHIP) to report annually to the HHS secretary certain payments or transfers of value provided to physicians or teaching hospitals ("covered recipients"). The rule has the effect (if not the intent), of frightening covered recipients. Doctors are scared away from accepting employment with covered entities. Reporting pales in comparison to the newly launched program requiring certain suspect categories of investors to be fingerprinted.

The CMS rule on background checks divided Medicare providers and suppliers into three categories based on fraud risk. Those in the high-risk category, CMS said, would be subject to the background checks. They include executives who have at least 5 percent direct or indirect ownership of newly enrolled home healthcare agencies and durable medical equipment agencies.

While fingerprinting may begin with "suspect" categories, such as DME and home health, there is a track record here.  I suspect all you need to do to attract scrutiny is succeed.