Third-Party Audits

January 1, 2009

Does a third party (other than the insurer who paid the claim) have any right to demand a refund or medical records? Is there a time limit for demanding a refund?

Question: Does a third party (other than the insurer who paid the claim) have any right to demand a refund or medical records? Is there a time limit for demanding a refund?

Answer: Unfortunately this is a growing problem. Here’s what’s going on: Many employers are the payers (rather than the insurance companies) through self-insured products. Just like insurers do, 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 that the physician signed, payers have multiple years in which to recover funds. So first, look at (and attempt to understand) your contract. Look for language referring to such things as “take backs,” “off sets,” and “recoupment.”

If the collection company is indeed hired as an agent of the payer then they have 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 an agent of the payer? The physician has 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 same. And, no harm to bring it to the attention of the State Insurance Commissioner, if for nothing other than clarification on how these things work. (Answer provided by Susanne Madden of The Verden Group.)