In recent times, home infusion pharmacies have been grappling with significant challenges related to underpayment, untimely payment, and outright non-payment by major medical plans for infusion therapies. These tactics have affected both in-network and out-of-network providers, alike, and have ballooned in scope across the healthcare industry. For example, it has been reported that Anthem is holding more than $2.5 billion in approved but otherwise unpaid claims, highlighting the magnitude of the problem faced by home infusion pharmacies and other healthcare providers.
This article aims to shed light on the tactics employed by health insurance companies to avoid payment to home infusion providers. Additionally, we will explore the legal tools available to home infusion pharmacies to challenge such payment discrepancies and protect their rights.
I. What Is Happening
While underpayment, untimely payment, and non-payment is happening to both in-network and out-of-network providers, the specific tactics and circumstances vary based on participation status.
a. In-Network Providers
With respect to in-network providers, insurer tactics have taken a variety of forms. We address several of the more common tactics below.
i. Denials/Requests for More Information
One common tactic used by health insurance companies to avoid or delay payment is by issuing denials or continued requests for additional information when processing claims from in-network providers. These tactics can cause significant delays and financial strain on home infusion pharmacies by forcing them to continually gather more information to rebut the denial or to respond to the requests for information. Providers might receive vague explanations as to what information is “missing,” and may receive denials for missing information, despite the fact that it has been previously provided. Moreover, insurance companies often go through several rounds of this, requesting a different or new set of information with each round.
ii. Contradictory Acceptance or Rejections of Materials
Equally frustrating for in-network providers is the tactic where insurance companies will accept certain information or documentation on one claim, only to perplexingly reject it on another claim (sometimes even for a subsequent treatment for the same patient/prescription). This inconsistent behavior by insurance companies complicates the payment process and creates obstacles for providers seeking timely reimbursements.
iii. Precipitous Changes in Payor Position on Terms
Some payors might unexpectedly change their stance on contractual terms, causing confusion and financial uncertainty for home infusion pharmacies. Despite having interpreted and carried out their contract in one way for several months or years, payors have often abruptly shifted their position, leading to denials of payment for services that were previously otherwise covered. For example, a payor might take the position that a certain treatment is no longer “within medical policy” despite having previously approved the treatment through prior authorization and having covered it in the past.
iv. Introduction of a Third Party Intermediary
In an effort to apply more streamlined utilization management and network contracting to medical benefit claims, several large health insurance companies have contracted with third party intermediaries – such as CareCentrix or eviCore – to contract with the network of home infusion providers. These entities end up taking over the contracting, credentialing, utilization management, claims processing and ultimate reimbursing from the health insurance company. However, in many instances, we have seen these entities apply the underlying contract terms differently than the health insurance company previously did (for example, no longer covering infusions taking place in the pharmacy’s infusion suite under the home infusion benefit). In addition, we have seen many instances where a provider has lost access to the network because it was not contracted with the intermediary organization, despite having previously been contracted with the health plan.
v. Patients with Out of State Coverage
A final tactic used by health insurance companies to cause delays, confusion and non-payment to otherwise contracted, in-network providers occurs in the context of patients that either reside across state lines from a provider (i.e., patient resides in Kansas City, Kansas, but obtains care from a provider Kansas City, Missouri), or otherwise have insurance coverage issued in a state other than their state of residence (i.e., the patient lives in Michigan, but works for a company based out of New Jersey and has New Jersey issued insurance). In these instances, despite being contracted with the local plan, we have seen insurance companies place many hurdles and obstacles to obtain payment for otherwise “local” patients. This is particularly prominent among the “Blue Cross/Blue Shield” plans, who have different affiliates operating out of different states.
b. Out-of-Network Providers
Unlike in-network providers, out-of-network providers are not directly bound by contractual terms – including reimbursement rates – that are otherwise applicable to contracted providers. Where patients have out-of-network benefits, such out-of-network providers are able to submit claims to the patients’ insurance companies and obtain reimbursement based on usual, customary and reasonable charges available in the area. However, in the case of out-of-network providers, health insurance companies have used additional tactics to avoid paying the full amount for infusion therapies.
i. Non-Payment
A common tactic by insurance companies is to simply not pay out-of-network claims, even if the patient has out-of-network benefits. Insurance companies know that out-of-network providers have limited recourse to timely or efficiently challenge the outright non-payment of claims, and rather than take a substantive position on the validity of the claim, they may simply not pay at all. In some instances, insurers may equally provide pretextual or baseless reasons for denying or not paying on an out-of-network claim.
ii. Gross Underpayment
Other times, insurers may technically “approve” an out-of-network claim, but issue payment at a rate far below actual market rates. For example, on a $20,000 infusion administered and billed by a provider, the insurer might approve the out-of-network for $1.00. This is grossly below the actual usual, customary and reasonable charges for this type of service, far less than what they pay in-network providers for this service, and, worst of all, well below what the provider spent to even acquire the drug. When insurers technically “approve” and “pay” on out-of-network claims in this fashion, it can present certain difficulties in seeking to challenge the action.
iii. Issuing Payment Directly to Patients Instead of Home Infusion Pharmacies
Even when insurance companies ultimately render appropriate payment for out-of-network claims, such insurance companies might intentionally send payments directly to patients instead of home infusion pharmacies. This practice places the burden of collection on the providers and can lead to partial or non-payment for services rendered.
II. Legal Tools Available to Providers
To address these challenges, home infusion pharmacies can utilize various legal tools, including:
a. Prompt Pay Laws
Many states have enacted prompt pay laws that establish timeframes within which insurance companies must process and pay claims. These laws serve to ensure timely reimbursements to providers and penalize payors for delayed payments. For example, a state prompt pay law may require all claims be paid or denied within 30 days, and failure to do so can result in imposition of statutory interest. Frier Levitt has assisted home infusion providers in leveraging prompt pay laws to cause prompt payment of unpaid or underpaid claims.
b. ERISA Laws
The Employee Retirement Income Security Act (ERISA) governs certain employer-sponsored health plans and provides avenues for legal recourse when insurance companies violate their obligations under the law. Included among the remedies within ERISA are beneficiary appeal rights, claims processing regulations, administrative review and private rights of action. Importantly, where a right is held by a patient as opposed to a provider (as is often the case with out-of-network providers), home infusion providers may still be able to assert rights through an assignment of rights/assignment of benefits from the patient, or by working cooperatively with an eager patient to ensure payment and access.
c. Contractual Provisions
Reviewing and negotiating favorable contractual provisions with payors can protect home infusion pharmacies from potential payment issues. Specific contractual terms can clarify payment expectations and provide leverage in the event of payment disputes. Not only can these provisions clearly establish coverage and rates, but they often incorporate state payment and appeals requirements directly into the body of the contract, giving rise to additional breaches of contract.
III. Conclusion
The challenges posed by underpayment, untimely payment, and non-payment by major medical plans for infusion therapies demand attention and proactive measures from home infusion pharmacies. Familiarizing themselves with the tactics employed by insurance companies and understanding the legal tools available can empower providers to navigate these issues effectively and safeguard their financial interests. Frier Levitt routinely represents both in-network and out-of-network home infusion providers on a variety of non-payment and underpayment issues. If you are facing reimbursement issues on your home infusion claims, contact us today.
