Solutions - Actual Case Study
Client Challenge
Denied Claim due to Late Filing
A long-term client had a NICU patient in an out of area facility. Charges at the facility were disputed and the case went into subrogation. This resulted in additional charges that were owed to the facility. Since this claimant was already a reinsurance claim, the additional expenses in the amount of $85,000 were submitted to reinsurer for additional recovery 12 months after the filing deadline. Reinsurer denied reimbursing the additional charges because of the late filing.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Waived Late Filing Deadline
Terry Chesser, the broker of this account, deliberated this case on behalf of the client with the Actuarial staff at reinsurer. He assured the reinsurer that the client had acted in good faith and that the client had no other recourse but to seek court action if a fair claims agreement could not be reached. Terry asserted that the reinsurer follows the fortune of the client and is ethically obligated to fulfill its obligation to the client as part of the contract. Reinsurer agreed and reimbursed 90% of the additional charges.
Client Challenge
Claim Charges with “Outlier” denied
A Provider Group had contracts at Facilities that used only DRGs as their payment basis; therefore, the Provider Excess Policy rates were based on these Hospital DRG rates. The PEL policy had a provision stating that “outliers” that were not listed on Exhibit A of the policy would not be eligible for reimbursement. However, during the end of the client’s contract year, reinsurer’s claims analyst noticed charges at a certain threshold had reverted from a DRG to a percentage of billed charges. Because Outliers were not mentioned in the original hospital contracts, the reinsurer denied these charges.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Claims reverted to an outlier are covered
Terry and the account manager of this account were not informed about some of these revised Hospital contracts that now included outliers. After reviewing the revised Hospital contract, we realized that several of the most utilized hospitals had included outliers. Terry informed the reinsurer’s actuarial staff of this situation and made them aware of the potential loss of claims recovery. Terry negotiated with the reinsurers’ staff to include outliers as eligible expenses but limited to an average per day for a small PMPM rate increase retroactive to the effective date of the revised hospitals. The results showed that the claims reimbursement far exceeded the premium increase by $300,000.
Client Challenge
Claim Charges at Hospitals with no DRG payment schedule denied
A few years ago, reinsurers understood that all HMOs when contracting with hospitals for Medicare members would only pay using DRGs, but this is not always the case. Therefore, reinsurers misinterpreted that DRGs are applied to “All Facilities” regardless of a DRG being in place or not. On the contrary, the client’s understanding was to apply the DRG when and where they have a DRG. This resulted in all claims not paid on a DRG basis being denied.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Claims at Hospitals with no DRG payment method are reimbursed
On behalf of the client, Terry contested this issue, stating that it was not about strict application of the policy but rather the actual intent and client’s understanding of applying DRGs when they have a contract. Terry reminded them that this is the reason the industry uses an ADM for those cases that are not reimbursed on a DRG basis. The whole issue was discussed in the context of the evolution of the reinsurers’ DRG policy language, and it became clear that the intent of the Provider Contract was to include all payment methods. Result: Reinsurer reimbursed approximately $270,000 of claims that were not paid on a DRG basis.
Client Challenge
Inpatient Claim Charges for Acute Level of Care denied as Acute Care in Subacute Facility
National Risk Advisors, typically examine each copy of “Explanation of Benefits” (EOB) to verify accuracy of adjudication and reimbursement amounts. A specific Reinsurer goes by “level of care” vs. “facility or place of care”. Therefore, allowing charges at non-acute facilities to be reimbursed at the normal acute hospital limit if services delivered are of an acute nature. During the 2006 contract year, a claimant incurred $255,900 inpatient charges in a Subacute Specialty Facility. Reinsurer’s claims analyst considered the charges ‘sHCC at this facility as subacute and limited claim to $500 per day for 111 days. NRA noticed that the Medical Records which substantiate “Level of Care” had not been requested by reinsurer and the level of care needed to be determined.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Acute Care Services in Subacute Facility have been reimbursed at the Acute Care Limit.
After further investigation by NRA, it was determined that the 111 days were an acute level of confinement. After the reinsurer reprocessed the claim an additional $141,930 was recovered for the client.
Client Challenge
Charges including a transplant performed at a Transplant Facility were not given credit of the lower drop-down deductible
Another examination of an EOB revealed that while the charges were correctly adjudicated, the allowable expenses were held to $100,000 deductible and not the drop-down deductible of $50,000. The client was not aware of this error.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: REINSURER reimbursed the additional $45,000
We notified the reinsurer’s claims analyst, and the additional amount was sent to the client.
Client Challenge
REINSURER called and insisted on denying about $500,000 (15 claims) in reimbursement for a client since they said they were never reported to them at renewal.
REINSURER wanted a conference call with the client to advise them.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: 15 claims were identified as reported during renewal
We reviewed the data dump from the client and found that all 15 claims were actually in the claims report to reinsurer prior to the renewal. Thus, embarrassment was spared to the reinsurer and aggravation to the client.
Client Challenge
Assist client in understanding claims cutback
In a recent consulting assignment, the CFO asked for our assistance on a large claim and he couldn’t understand the cutbacks of $200,000.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Identified duplicate overpayments
Upon looking at the CFO’s computer screen we noticed several duplicate payments with codes that weren’t clear which suggested these were duplicate overpayments to the provider by the HMO. The CFO appreciated our identification of this error which resulted in savings of approximately $200,000 to the HMO.
Client Challenge
Employer denied claims after claims deadline.
Reinsurer contended medical claims were reported after the claims deadline and denied approximately $600,000 in claims.
PROBLEM SOLVING – CREATIVE THINKING APPROACH
RECOMMENDATION & RESULTS: Mr. Chesser of NRA acted as an expert witness in testimony to demonstrate that the TPA failed to file and notify the reinsurer prior to the claim’s deadline.
Result: Arbitrator ruled in favor of the self-funded employer and an additional $600,000 in claims were recovered.
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