what happens when an insurance company sends you a letter that says, we paid you money, but oops, we shouldn’t have, and we want it back.
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Well, Hello there, friends. Welcome in to another show. This is one that I think is going to be important to you and to many, simply because it’s going As you’re aware, I do the network where I help day to day offices with issues, but we do seminars. And one of the big questions I often get, and I’ve gotten a lot this year, in fact, in the last month, is what happens when an insurance company sends you a letter that says, we paid you money, but oops, we shouldn’t have, and we want it back.
Do we have to pay that back? What’s the protocol here? Can they force it? Can they take payment from a future one? Let’s talk about the laws when it relates to that. When an insurance company makes a payment. And then later decides it’s a payment they shouldn’t have made and now is requesting you to pay it back.
Let’s go to the slides. Let’s take a look at what the laws tell us about this. Cause that’s what’s really important is to understand where’s the responsibility. Think of this, you bill an insurance, you verify it and they pay you. And then later they say, oops, we shouldn’t have paid you. The first place we might look is what did the statute of limitations say as far as how they can recoup it?
My goodness, we have a statute of limitations with many insurances that can be as little as 90 days. Often it could be a year and some may be a little longer, but generally a year or less. So if there’s a statute of limitations for them to Make a payment to us, us sending a bill. Is there a statute of limitations for them to force it back?
Let’s take a look at some of the states here. I won’t say I have every state, but this will at least give you an idea. Under federal law, they can do for one year for any reason, just for whatever. And that’s under Fed, so they can force that. But the states are a little bit different.
Look at these first states, Alaska, Hawaii, Idaho, Delaware, they have no statute of limitation. So then what happens in those states? What that will happen is it defaults to the federal statute. I’m going to say it’s going to be. A year. However, look at states like Georgia, 90 days. South Carolina and Texas, 180.
Arizona, California, one year. Notice it only says 12 months. 12 months and one year, a little bit different. I know that seems a little weird, but nonetheless falls in that. What this boils down to, though, is they have a time limit that if they don’t send the request within this time, They can’t force the refund.
So by example, in Georgia, if they send it to you and it’s a year later, you can tell them, go fly a kite because statute of limitation is too old. Much if you send a claim, you’ve all done this. You send a claim a little bit late from the statute, what does the insurance say? Oh, we’re not going to pay.
Kind of like catching an airplane. If you don’t make it by the time it leaves the gate, you’re not getting on. So don’t be afraid to first push back when it comes to just simply statute of limitations. But I want to take it a step further. Because at some point, who’s the responsibility for it? Think of all the work we do to verify insurance.
They say it’s going to be covered. They pay it. And they come back later and say it’s not covered. Let’s take a look at a letter like this. This is under a federal plan. And I think it’s interesting to how this is written. Notice it says here, Dear Billing Department, they’re sending this to us. And it says, in regards to the request for repayment of a claim, the request made to you was voluntary.
Now I want everyone to notice that statement. Now, not often do they say that, but in this case, they’re clearly stating it’s voluntary. So it’s a voluntary overpayment request because you are in Network Provider, you do not have to pay back any overpayment if the overpayment was discovered after 365 days.
Again, this is under the federal plan. So it’s one year. So notice they’re saying, oops, we made this payment and we shouldn’t have, but since it’s over one year, we’re asking nicely, would you go ahead and refund it? My answer? No. Why would I refund it when there’s no requirement? In fact, what they’re saying is We made a mistake.
It’s our mistake, but we want you to pay us back and you chase after your patient to get the money. And I’m gonna say, no, you’re the insurance company. You made a mistake on paying it. You go after your insured. That responsibility is yours, not ours. And again, notice how they put it voluntary because There’s case law that goes with this.
And here’s a letter that goes over the protocols of when an insurance company pays something wrong and they later want to recoup. And now what I want to do here is emphasize really where the case law is. And it goes into this. It says, I would like to bring your attention to these cases. Federated Mutual Insurance Company versus Good Samaritan.
This dates all the way back to 1974, by the way. So none of this is new. Where the court held that an insurance company could not recover the mistaken overpayment. And determine that the insurance company is in the best position to know what policy limits are and must bear the responsibility of their own mistake.
So let’s say, by example, you bill an insurance. They say they have 20 visits for acupuncture. Great. You bill all 20. And then they come back and say, Oops, we made a mistake. It turns out the patient only has 10. They told you it’s 20 and they paid for it. Now they want to come back? No, that’s their mistake.
This is what it’s highlighting. And that goes on here for the City of Hope. Notice this dates back to 1992. It says, Where the court held that in the absence of fraud. A health care provider is not legally obligated to refund payments it receives from an insurer if the insurance subsequently determines the payments were paid in error.
Now again, this is not something you did wrong. You billed it and they just said, oops, there was no coverage. Maybe the person ran out of visits. Maybe the person had limited coverage. Whatever the case may be. Whose responsibility is that? The insurance carrier. So I’m going to suggest do not be afraid to push back and say, based on these two case laws, we shouldn’t refund because it’s your responsibility.
However, what if you’re in network? Here’s where things get tricky. Generally, when you’re in network with a plan, your contract has language in there that says, even if we make a mistake, you have to repay it. That would be true based on the contract, unless The statute of limitations is greater. So notice the federal plan.
Even that one knew after statute of limitations they can’t force it. So the first place to look if you’re in network is to see whether or not it fits the statute of limitations. If it does not, then going to push back on it. But if it does, they’re probably going to force it. You may try sending the letter that I just had here and see what they may respond, but generally they’re going to say no.
In fact, this is what you might find. What if they deduct payment? From a payment? That’s a future payment. Under the contract, they can do that. Now, what if you say, but Sam, they deducted it and it was from another patient? It’s not a HIPAA violation because they’re not sharing information.
They’re just saying, hey, we paid you a hundred dollars before and we shouldn’t have, and we’re going to take the hundred we’re paying you in the future. Again, based on contract. But what if you’re out of network? Do you have to accept that if you’re out of network? If they’ve already deducted the payment.
Obviously, you’re aware of possession is 90 percent of the law. Now it becomes us to push back. I will tell you, I had an office, this is a few years ago now, that an insurance had recouped 6, 000. They pushed back, took to court, they won. They won not only the amount, but some damages, as well as attorney’s fees.
The only problem is it has to be worth it, because what if you’re talking 100? Is it going to be worth you to file what it takes to go against an insurance company? Probably not, but don’t be afraid, and I’m going to suggest always push back, Statute of limitations, number one. Number two, the case law. The insurance company’s in the best position.
Is it our responsibility when we’ve already done everything to make sure that the policy was covered? And what’s the best way to know a verification? Bill and they pay. And if they’ve paid it, And they later come back and say, it’s our mistake. Generally it’s theirs. Do not be afraid to push back on that.
Here’s something to point out. This is an Aetna insurance. And take a look at, this is an important one. It says, our records indicate the overpayment as noted on the enclosed document is not eligible to offset. So you’re either out of network or it’s past statute of limitations. So they’re saying we can’t offset it.
We can’t take it from money. Therefore we must request that you issue a check or money order payable to us for the above amount. So we’re saying will you please be nice? My answer is, no, thank you. Do not be afraid to push back. They’re obviously looking to see if you’re afraid. Many times you get these letters and IDOT offices just flat out ignore it.
Unless they can force it, what are they going to do, take you to court for it? No, they’re just hoping you don’t know the case law. They’re going to take it in the short. So always be available to push back. Don’t be afraid. In fact, get your patient involved. Ultimately, their policy is one that they assumed it was correct when it was paid.
How do they come back later and say no? Don’t be afraid to push back. As always, the American Acupuncture Council Network is there for this type of question and many more. This is what we deal with on a day to day basis. Take a look at our site or come to a seminar. I’d love to see you in the future.
Otherwise, please take care. Wishing you best, my friends.