Frier Levitt Healthcare Survey Results Reveal Widespread Non-Payment by Health Insurers

Frier Levitt recently conducted a survey of non-payment by health insurers using a sample of various in-network healthcare providers to discover patterns of non-payment, underpayment, and recoupments by public and private payors. While the plurality of respondents reported withholdings between $25,001 and $100,000, our findings suggest that a significant number of respondents were owed over $100,000.  As seen in the figures below, the biggest offenders in New York and New Jersey appear to be Anthem, Blue Cross Blue Shield, UnitedHealthcare, and Medicaid/Medicare Advantage plans. Surprisingly, even though it does not have as large a market share as Horizon, UnitedHealthcare (“UHC”) appeared relatively frequently in the survey data in terms of withholding payments from practices.

Private payors, such as Horizon and UHC, are responsible for reimbursing medical practices in a timely manner for the services they provide to patients. Every state has some version of a “prompt pay” law that requires the adjudication of a medical claim within a reasonable period. However, it has become increasingly common for payors to engage in tactics that delay or deny payment to practices, leading to significant financial strain for many providers.

Frier Levitt’s recent survey found that a significant proportion of medical practices have experienced substantial non-payments from payors. Approximately one-third of the respondents reported having over $100,000 in unpaid claims, which impacts the profitability of even the largest practices.

One of the primary ways that payors delay or deny payment is through increased audits and document demands. A pre-payment review audit, a new tool being used by private payors, can be lengthy and burdensome for practices, requiring them to provide extensive documentation to support their billing and coding. In some cases, payors may use these audits to retroactively deny payment for services that were previously deemed medically necessary and reasonable.

Another tactic that payors may use is repeated document demands that often lead to overpayments.  While many practices are used to dealing with pre-authorizations, payors are now identifying specific codes or procedures and asking providers to submit records after the fact to determine if the services should be reimbursed. In these cases, payors often claim that the practice is not entitled to receive payment, or if payment was already made, then it was not entitled to the reimbursement paid. This is not a pre-payment audit, but a standardized request for records for specific codes after the services were provided. This oppressive conduct can be especially problematic for small practices with limited financial resources, as it may be difficult for them to take on the administrative burden of having to constantly produce records, let alone not be paid for the service.

To fight back against these tactics, practices need to take a proactive approach. This may include filing appeals promptly to contest denied or delayed payments and seeking legal assistance if necessary. 

It is important for practices to carefully review their contracts with payors and to ensure that they are compliant with all billing and coding legal and regulatory requirements. This may require guidance from industry experts or legal counsel to ensure that the practice is following all necessary guidelines. Practices may also consider joining professional associations or advocacy groups that can provide support and resources for dealing with payor issues. Medical societies and organizations can be an important source of information on best practices for dealing with payors.

How Frier Levitt Can Help

Medical practices need to be proactive in addressing payor issues to avoid becoming subject to nonpayment and underpayment by health insurers. By taking steps to ensure that your practice is compliant with billing and coding requirements, your likelihood of being compensated in a timely manner for the services you provide can be improved.

Frier Levitt’s survey findings demonstrate the damage payor tactics can have on private practices, yet there are steps providers can take to combat payor issues both before and after they occur. If you are a provider dealing with nonpayment or underpayment issues, contact us to learn more about what you can do to protect your practice from erroneous payor tactics and recoup money being inappropriately withheld.