Testimony In Support of H. 2193, An Act to Limit Retroactive Denials of Health Insurance Claims, before the Joint Committee on Financial Services

The Massachusetts Medical Society wishes to be recorded in support of the above-referenced bill that would limit retroactive denials of claims by health insurers.

House Bill 2193 would bar all health insurers – including Medicaid – from recovering payments made to providers more than 12 months after the payment of the claim.  The insurer would also have to give at least 15 days advance written notice of the intent to recover, giving the provider an opportunity to request additional information needed to verify or contest the validity of the denial.  The 12 month limitation would not apply to claims in which an insurer is alleging fraud, double billing or the non-provision of services.  The notification would also trigger a six-month period allowing the provider to submit the challenged claim to another insurer.

There is currently no limitation on insurers’ ability to recoup payments already made, even in cases where no fraud is alleged.  The Medical Society has been made aware of cases where such recoupments have been demanded three years after payment.  It is difficult for physicians and other health care providers to challenge these actions, since most records are placed in “dead storage” soon after a year and are not easily accessible in a cost effective manner.  Thus, recoupment challenges are often too costly to defend against and payments already received are inappropriately lost.  

The MMS has adopted policy which recommends that: “Legislation for payment recoupment include provisions stating: (1) Notification of errors in payment must be given to the provider within three months of the initial payment; (2) if an insurer claim payment recoupment is in error, the insurance company will pay interest to the physician, plus the original claim payment amount, with the interest calculated from the original date of claim submission; and (3) when notified of an overpayment on a claim, the insurance company cannot perform automatic recoupments.  Physicians, when notified, will have 35 days to contest the overpayment before payment is due.”

We urge the Committee to report out House Bill 2193 favorably.

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