Surviving Managed Care© Newsletter
| Volume 3, Number 3 Fall, 2001 | Vision and Eyecare Business Information For The Millennium |
In This Issue:
Fighting Back Redux: More On The Battle Over Downcoded, Delayed, And Denied Claims Payments
Confidential Patient Information: An Unrealized Security Breach?
Surviving Managed Care ©
Managed Care news and business information for eyecare professionals and administrators.
Gil Weber, MBA
www.gilweber.com
Objectives:
To review and understand how class action suits may impact on the troubling and increasing tendency of certain payors to delay or "short" claims payments; to review and understand how data stored in office computers and computerized examination equipment might prove problematic under new patient confidentiality regulations.
Fighting Back Redux: More On The Battle Over Downcoded, Delayed, And Denied Claims Payments
In the Spring 2001 issue I discussed an increasingly troublesome trend --that many third party payors are not meeting contractual or state-mandated obligations for claims payments. I noted in that issue:
It's no secret that a lot of practices around the country are having difficulty collecting on the claims they're submitting. For some the problem is getting paid in a consistent, timely manner. For others it's an on-going problem with downcoding -- being paid at a service level lower than indicated on the claim. And for the most unfortunate it's both at the same time.
Perhaps you're a physician or administrator who's reached the end of your patience with certain third party payors. You've tried to play by the rules, you've complied with the terms of your provider agreement, and your staff has worked hard to submit clean claims in a timely manner. But despite such efforts those claims are not paid as submitted or paid on time.
You've written appeals letters. You've refiled claims. You've sent the claims by mail and paid for a signature return receipt, or you've sent the claims electronically hoping to preclude claims mysteriously "lost" in the mail. You've spent more time on the phone than could possibly be reasonable. And still there's a frustrating sense that you're just banging your head against the wall and nothing's going to change.
Well, maybe there's something new in the works. Something that just might cause the "bad guys" in this on-going battle to pay attention...
It's now early May, and I've just returned from ASCRS in San Diego. There I was co-presenter on a course designed to help physicians and administrators understand the dynamics of this troubling trend. We introduced the audience to some options and tactics for challenging payors on claims not paid properly under existing provider agreements. And we described ways to pro-actively position for any future agreements.
Here, I'll describe an emerging option we discussed and one you'll want to know about -- the use of class action suits.
Class Action Suits
There's dynamic action on the legal front as some physicians start to fight back against the heavy-handed tactics of certain payors. Using carefully planned tactics, often times centered on a class action lawsuit, these trailblazers are standing up and saying "Enough is enough."
On May 8th news services around the country reported that attorneys representing physicians in seven states and medical associations in three states had asked a U.S. District Court judge to certify their claims into a class action suit on behalf of 600,000 physicians. They allege that seven health plans routinely and improperly underpaid claims, and that in some cases the claims were automatically downcoded by computer software.
It's no surprise that counsel for the HMOs are asking the court not to certify the class action. They argue that the only way to properly examine the allegations is on a case-by-case basis -- that is, with each physician bringing an individual action against a payor.
It will be interesting to watch this case move through the court system in the months ahead and to see if it is, in fact, certified as a class action. However, another suit has been certified, and there's intriguing news to report on that.
Earlier this year attorneys representing two physicians were successful in certifying a class action suit against CIGNA (Kaiser, et. al., v. CIGNA Corporation, et. al, No. 00-L480, pending in Circuit Court, Third Judicial District, Madison County, Illinois). A Texas pediatrician (Dr. Corrigan) and an Illinois otolaryngologist (Dr. Kaiser) initiated the "breach of contract" action on behalf of all CIGNA PPO providers included in the class. The Notice of Class Action stated in part that the "breach of contract" claim alleges:
...that CIGNA HealthCare did not comply with the terms of its PPO contracts. More specifically, the "breach of contract" claim alleges that CIGNA HealthCare used a claim processing software called ClaimCheck© to unilaterally "bundle," "downcode," and/or reject claims for medical services and supplies provided by PPO Providers. Drs. Kaiser and Corrigan further allege that CIGNA HealthCare's failure to disclose the precise ClaimCheck© edits used to "bundle," "downcode" and/or reject provider claims, prior to the time services were rendered (or supplies provided), also constitutes a breach of contract.
You may have personal experience with ClaimCheck© or a similar computer program used by another payor that processes your claims and spits out payments seemingly without rhyme or reason. Your EOBs may be a confusing jumble of numbers and references to coding rules and regulations you don't recognize and likely have never seen. And if you've tried to get a payor to explain how its software resolves your claims you know the frustration resulting from the meaningless answers you get.
In this action against CIGNA the plaintiffs seek damages for themselves and all members of the class. The Notice of Class Action goes on to say:
Dr. Kaiser and Dr. Corrigan are seeking compensatory damages on behalf of themselves and other members of the Class for services rendered (and supplies provided) which CIGNA HealthCare failed to pay as a result of its improper use of ClaimCheck©. They also seek this compensation in the form of additional payments from CIGNA HealthCare. Plaintiffs also seek "injunctive relief" in the form of an Order requiring CIGNA HealthCare to disclose the ClaimCheck© edits which it uses (or intends to use in the future) to adjust CIGNA HealthCare PPO Provider bills.
OK, So What?
So why should you care about this class action suit entered against CIGNA or, for that matter, care about any similar suit? The answer is in the collective muscle (and results) that can be brought to bear through a class action suit. To see the potential you need look no farther than the results of recent "tobacco" class action suits.
Obviously it's going to be very costly for one physician to bring an individual action against a payor. If you're trying to collect on a few hundred or a few thousand dollars in past due payments it's probably not cost-effective to go to court. And so you're stuck with alternative avenues to dispute resolution that may not be as effective in bringing the payor to the resolution table or getting it to settle in your favor.
Class action suits are designed to aggregate plaintiffs and allow legal counsel to bring one, focused action to the courts. That's more efficient than filing tens, hundreds, or thousands of individual complaints -- a process much more difficult to work through the court system. And, typically, the costs for plaintiffs in a class action are much less than when filing individually since legal counsel will probably be paid out of the collective award, if any. This means that you don't have to come up with a lot of up-front money to pursue a payor, particularly a well-capitalized payor with a suite full of high-priced attorneys.
What About The Risks?
Managed care is like Chess... Know the rules, plan ahead, prepare for the unexpected.
Maybe you've thought about joining a class action suit but feared that to join one would subject you to retaliatory action from the payor. Well, that's always a possibility though it?s not supposed to happen. Obviously a payor could terminate your provider agreement at its sole discretion, without cause, at the anniversary date. And though you might suspect (and might be correct) that underneath it all the termination was retaliatory, you might be hard pressed to prove that absent some compelling evidence.
You're supposed to be protected from retaliation when a participant in a class action suit. For example, the Notice in this CIGNA case states (in bold capital letters and with emphasis):
PARTICIPATING IN THIS LAWSUIT WILL NOT TERMINATE OR AFFECT ANY OF YOUR MANAGED CARE AGREEMENTS WITH CIGNA HEALTHCARE.
That's pretty clear -- participants in this class action should not fear losing access to their patients currently seen through any CIGNA provider agreement. Still, in the worst-case scenario, if you were to lose access to a payor's Members (and considering that you're not being paid properly for those you've seen in the past), what are you really risking by participating in a class action suit? If the contract is now a "dud," what would make you so desperate to hang onto it and suffer even more financial hassle?
Arbitration
You might wonder how or if any arbitration terms in your provider agreement could impact on your right to join a class action suit. Indeed, if you've signed a contract that obligates you to seek relief through arbitration or an internal dispute resolution protocol before pursuing "outside" avenues, there could be some complicating issues. Certainly you'll need to consult with qualified legal counsel to determine your rights and the roadblocks, if any.
In the class action suit discussed here, the arbitration terms in CIGNA provider agreements are certain to be an issue. The Notice states:
...during the course of this Litigation, CIGNA HealthCare will seek to enforce any valid agreements with Providers that require submission of disputes to binding arbitration, and thus preclude such Providers from participating in this Litigation. Class Counsel has taken the position that arbitration clauses should not be enforced and that the arbitration clauses were included in the CIGNA HealthCare contracts to prevent Class members from aggregating their claims in a class action.
Many physicians and attorneys have long felt that payors use mandatory, binding arbitration as a means to limit a physician's options and reduce the size of any potential award. Many attorneys have suggested that when physicians agree to mandatory, binding arbitration (probably assuming they have no option to say "no") those physicians are boxing themselves into corners.
Some attorneys suggest trying to negotiate a relaxation of any requirement that disputes can go no farther than binding arbitration (that is, without any other means of appeal outside the payor's self-defined grievance protocols). Certainly it will be interesting to follow this CIGNA case and see if the argument made by Class Counsel -- that the arbitration clauses should not be enforced --wins the day.
Additional Information
If you're interested in learning more about this case against CIGNA there is a website for information. Go to www.cigna-classcounsel.com
If you're interested in learning more about class action suits in general and/or how you might get involved, please contact me. I can direct you to a legal firm that will be happy to answer your questions.
Remember, it takes a few visionary trailblazers to get things initiated in these class action suits -- a few plaintiffs willing to stand up to and face down those payors who have taken advantage of healthcare practitioners. But once that ball is rolling the results can be incredible. While there's no guarantee that this suit against CIGNA or any other class action will be successful, I again say look at the recent "tobacco" suits. Who would have believed it could happen?
Confidential Patient Information: An Unrealized Security Breach?
At this point everyone has heard of HIPAA. And we all know that however HIPAA regulations may eventually shakeout, they will impose new and costly protocols for the handling, transfer, and protection of confidential patient records. It's clear that HMOs and other third party payors will be coming to practitioners with newly worded contracts or amendments referencing these increased security mandates. And so it's imperative that you learn and prepare for what's coming --that's key to surviving in tomorrow's managed care world.
Physicians and administrators understand that, among other requirements, they'll need signed releases from each patient prior to sending medical records and related information to other, authorized parties. However, what physicians and administrators may not appreciate is that they may violate this requirement and may put themselves and the practice at risk by unknowingly releasing confidential information stored in old or no longer used computers, and/or in computerized exam equipment.
Corneal Topographers, Fields Testers, Etc.
Let's say you've decided to upgrade some of your computerized patient testing gear. Whether the current equipment will be sold, traded-in, or dumped, there's data stored on a disk, tape, or other medium. It could be highly sensitive data regarding a patient's medical condition. Or it could be the basics of name, address, phone number, social security number, etc.
In any case, that's information that can be tied to a specific patient. You cannot let it out of your office without the patient's authorization. And, without doubt, your obligation to protect data extends to information stored in a computer or exam gear that's leaving your office permanently. If you send the equipment elsewhere, say back to the company from which you leased it, and someone else then accesses the data, you've probably violated HIPAA and, likely, your own state's laws on medical records security.
Office Computer Systems And Servers
Even if your staff consciously tries to purge data but, unknowingly, fails to do so you're potentially at risk. For example, let's say after installing a new medical records software package and some new terminals your staff "deleted" all the data from the old system. The computer system was then donated to a local elementary or trade school. And then someone there discovered that the data was still on the system and recoverable.
Why? How? Because "deleting" does not permanently remove data from a computer's hard drive or tape backup, and does not make it unrecoverable. (The same likely applies to computerized exam equipment.) "Deleting" only creates an electronic mark on the files in question, and tells the device's processor that it's OK to write over the marked files. But they're still there until more assertive action is taken to permanently render the information unreadable.
"Dumping"The Data -- Forever
As part of your office protocols (especially as proof of such protocols may be requested by health plans) you'll want to create written rules for destroying electronic data. The best way to assure that confidential data is gone and cannot be recovered is to destroy the storage medium. For example, you can break floppy disks or hard drives. You can open and rip apart tape cartridges. Obviously that's going to the extreme, especially if you had any intention of donating the equipment. (Absent the hard drive(s), for example, a donated computer is not much of a gift.) But the data will be rendered unrecoverable.
You can also use various electronic means to render the data unreadable. For example, there are numerous software security programs ("incinerators") that write over existing computer data and render the resulting files nothing more than a meaningless jumble of "1s" and "0s." Obviously some of these programs are more robust than others, so be sure to consult a computer security expert before using and depending on any such program. You want to be certain that any you might use does, in fact, render the data unreadable and unrecoverable.
It's probably a bit more of a challenge to insure that data stored in your computerized exam equipment is rendered unreadable and unrecoverable. Destroying that data in an automated perimeter testing device may not be as simple as dropping a CD into your office computer and following the on-screen instructions. Technical support staff from each manufacturer will probably prove to be your best source of information on how to do it right.
I don’t know who came up with these words of wisdom, but they ring true in all aspects of practice management and managed care.
I encourage you to live them.
Education is what you get when you read the fine print; experience is what you get when you don’t.
These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.
The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice. Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.
Copyright © 1998-2000, Gil Weber, MBA. No part of this newsletter may be reproduced or distributed in any form whatsoever without the author's prior written authorization.
