Before the Joint Committee on Financial Services
The Massachusetts Medical Society wishes to be recorded in support of House Bill 978, “An Act Relative to Pre-Authorization of Medical and Health Care Services,” legislation that would require that health insurers pay for claims for which a pre-authorization by a health care provider was required. The bill provides a window for the retroactive denial of claims by insurers for non-covered patients up to 120 days after the service was provided or up to 30 days after the claim for payment was filed (if the provider filed the claim more than 90 days after the service was rendered). The limitation would not apply to cases of non-pre-authorized services or for non-covered services. This measure would help reduce administrative burdens placed on providers.
When insurers terminate patients from their plans, they also retroactively deny claims for services that had already been rendered by health care providers, even if they had verified that the patients were enrolled in the plan at the time the service was rendered. This results in considerable difficulty for health care providers who must then seek reimbursement elsewhere – often from the patient or another insurer – or risk not being compensated for services performed. In most cases, the patient does not know that they had been disenrolled by the insurer until after the medical care had been provided.
There is currently no limitation on insurers’ ability to recoup payments already made, even in cases where no fraud is alleged. The Massachusetts Medical Society has been made aware of cases where such recoupments have been demanded four 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. This is unfair! This legislation would limit re-coupments to a reasonable period for pre-authorized services.
We urge the Committee to report out this bill favorably.
