Independent Claim Review

September 1, 2008

I recently received a letter from a company claiming to be an independent claim review agency hired by an employer whose employee was my patient. She was evaluated in our office twice in 2006. Claims were paid. Basically, the agent is demanding either a refund of the claim or chart documents to substantiate the claim. This letter says that the original payer is aware of this action.Does a third party (other than the insurer who paid the claim) have any right to demand a refund and/or medical records? Is there a time limit for demanding a refund? Should I inform the patient that there has been such a demand by her employer’s agent? Should I ignore this or can I take legal action against both the agency and the patient’s employer? Does this belong to the jurisdiction of the state insurance commissioner’s office? And finally, do you know of any resource to guide me in the future?

Question: I recently received a letter from a company claiming to be an independent claim review agency hired by an employer whose employee was my patient. She was evaluated in our office twice in 2006. Claims were paid. Basically, the agent is demanding either a refund of the claim or chart documents to substantiate the claim. This letter says that the original payer is aware of this action.

Does a third party (other than the insurer who paid the claim) have any right to demand a refund and/or medical records? Is there a time limit for demanding a refund? Should I inform the patient that there has been such a demand by her employer’s agent? Should I ignore this or can I take legal action against both the agency and the patient’s employer? Does this belong to the jurisdiction of the state insurance commissioner’s office? And finally, do you know of any resource to guide me in the future?

Answer: This response is from Suzanne Madden, The Verden Group:

Unfortunately, this is a growing problem. Here’s what’s going on: Many employers are in fact the payers (rather than the insurance companies) through self-insured and third party administrator (TPA) products. Just like insurers, employer groups are now attempting to recoup claims that may have been paid in error, in duplicate, or after the employee’s coverage was terminated.

Depending on the contract you signed, payers may have multiple years in which to recover funds. So first, you need to look at (and attempt to understand) the payer contract. Look for language referring to such things as “take-backs,” “off-sets,” and “recoupment.” If a collection company is hired as an agent of the payer (whether or not the payer is an insurer or the employer), then it has every right to act on that payer’s behalf. Does it make it right? Not necessarily. But illegal? Not likely.

On what grounds is the company asking for the refund, though? And, furthermore, what evidence has the company produced that they are a legal agent of the payer? You have no obligation to enter into any dialogue with an entity that does not conform to HIPAA guidelines. That is, any company could call the physician claiming to be a representative, but that does not mean the physician should discuss HIPAA-related issues with that entity.

I would first ask the agent to prove its authority before disclosing any information, and notify the patient of the agent’s request. Finally, there is no harm in bringing it to the attention of the state insurance commissioner, if for nothing other than clarification on how these things work.