Special E-Mail Bulletin #4
May 2000
Late Payments Suit In Texas
Special E-Mail Bulletin
Hi, everyone.
If any of you attended my managed care contracting course this past weekend at the ASOA annual meeting one of the topics you heard me discuss was the problem of healthplans delaying or denying payments. I also mentioned some of the legislative action that's come about as a result of persistent problems in so many states with so many payors.
Today I found the following, very interesting story on the Internet. It's from Managed Care Week, and mentions several of the little tricks I described in my lecture. An amazing timing coincidence :o) I think you'll find this interesting.
Gil Weber
PacifiCare Blames IT for Payments, But Physicians Charge a Cover-Up
This article was published in Managed Care Week May 22, 2000
PacifiCare of Texas, Inc. has fallen behind in payments to providers under its new subsidiary Harris Methodist - that much is certain. But the managed care firm blames inadequate information systems integration, while a lawsuit filed by a physician charges the plan with intentionally withholding reimbursement.
The lawsuit, Persons v. Harris Health Plan et al., appears to rely on insiders at the health plan who provided descriptions of the alleged intentional scheme (Cause No. 141-18266200).
The suit charges that PacifiCare, under pressure to turn the plan around quickly to appease analysts and stockholders, developed a four-step plan to withhold physician payments. Starting Feb. 1, 2000, the claims department said it didn't receive any claims for the previous month and that month, according to the complaint.
When physicians began calling 30 to 45 days later, the claims department allegedly demanded that they be re-filed electronically, only to lose the second submission due to a "computer glitch." When the claims were filed for a third time on paper, "most would be rejected as not 'clean,' or appealed on phantom 'medical necessity' ground," according to the complaint.
The complaint presents "credible arguments on concerns about how PacifiCare operates," said the Texas Medical Assn.'s Rocky Wilcox.
Glitches happen: But "it's not uncommon" for health plans to encounter difficulties in integrating new information systems, says Janice Young, Gartner's research director for managed care applications and vendors.
"Many plans acquire other plans and assume the IT structure will be okay for a period of time," she notes. "But an organization that's losing a lot of money may frequently not have a system that is robust enough to have edits in place to manage claims processing."
"Then, they may have to do a lot of rework and they may not be able to get access to data, so it becomes a replicating cycle."
The suit proposes to represent a class of physicians who contract with Harris Health Plan and were damaged economically by delays and denials of payment. It charges the plan with common law fraud, civil conspiracy and breach of contract.
PacifiCare acquired Harris Methodist last fall, closing the acquisition in February.
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