Clawing Back at Insurance Clawbacks

Episode 44: Clawing Back at Insurance Clawbacks

You’ve probably heard the saying, “Easy come, easy go,” right? But in medical practices, when money goes, it’s anything but easy. It’s stressful, confusing, and can throw a wrench into your operations. You’ve worked hard to provide care for your patients – why would the insurance companies clawback money they’ve already paid you?

Insurance clawbacks can be a nightmare. One day you think your accounts receivable is well managed and well organized, and the next thing you know, insurance companies are taking back funds that they’d paid you previously.

So, what are insurance clawbacks? Clawbacks essentially happen when an insurance company retracts payment previously made to a healthcare provider. The reasons could range from overpayments to errors in billing or even suspected fraudulent activities.
And this can be a huge headache. It’s like getting paid for a job, and then your employer decides they want the money back. Not a great feeling.

There are several reasons why an insurance company might initiate a clawback. Some of the common ones are:

• Overpayment: Perhaps, during an audit, the insurance company realizes that they have paid you more than the agreed contract rates.
• Coding Errors: This often happens when there’s a mistake in the medical billing codes, either unintentionally or in some cases, as a fraudulent activity to claim higher amounts than were actually rendered.
• Policy Changes: Insurance companies frequently update their medical policies and payment structures. A procedure that was once covered may now fall under a category requiring a prior authorization or a referral, which may trigger a clawback.
• Insurance Company errors: Yes, they are all human, and they have to work with computer systems that aren’t always reliable. Sometimes a clawback is simply an error on their part.

So what we’re saying here is, don’t always assume malice when it could be ignorance, but at the same time, stay alert. Clawbacks could happen due to either side’s errors.

One of our clients has a current clawback they are appealing. The insurance company conducted an audit, and the manager unfortunately did not fax over all of the chart notes for the procedures in question. The insurance company is now claiming that since the records didn’t get faxed at the time they were first requested, they are accusing the practice of fraud and saying that the services obviously didn’t happen. They have clawed back the money and are refusing to look at any other systems or audit logs to verify that the services actually were rendered. They’re just crossing their arms and saying “No!” we are continuing to appeal that one. Beware that in many cases the chart auditors are looking for reasons to deny services that you rendered, as they have to justify their existence. Their actions may or may not be fair or reasonable, and my strong recommendation is to pay attention and appeal.

So let’s review some was that you can protect your practice. With any interaction with the insurance companies, it’s essential to be proactive rather than reactive as much as possible.

We recommend performing regular internal audits on your billing and coding. Make sure that everything aligns with the most current coding guidelines and individual insurance company medical policies. As we mentioned way back in Episode 4, track your denials and identify patterns early on, as they can be indicative of a medical policy change.

As far as documentation, the old auditor in me will always encourage you to maintain meticulous records. Any correspondence with insurance companies should be documented. This can act as evidence if ever a dispute arises, and the better organized you are, the quicker you can get to a resolution. If you’re like me, and paperwork is not your forte, it’s okay. Find someone on your team who is good at it, and delegate to them.

And, while I don’t recommend overutilizing your attorney, having a good legal team or consultant who specializes in healthcare law can be a big advantage. They can help guide you through the complexities of insurance contracts and even help negotiate more favorable terms. And when there’s an issue, they can help with interpretation. Occasionally, when you need a “bad cop,” some correspondence on your attorney’s letterhead can help to speed things along.

It’s also important to have someone on your team who is familiar with the appeal process for each insurance provider you work with. In many cases, you’ll have a limited time to contest the clawback. You may also wish to enlist the support and expertise from your county or state medical association. In many cases, they have a staff member whose role it is to interface with the insurance companies and to advocate for their physician members.

The next step in a strong strategy around clawbacks is staff training. We recommend that you are continually investing in educating your team on current billing codes and healthcare policies. The more knowledgeable they are, the less likely errors will occur.
The key takeaway here is vigilance. You can’t slack off when it comes to financial management, especially with the ever-changing landscape of healthcare. Encourage them to attend local and regional meetings for education and to network with other revenue cycle folks so they can have their ear to the ground for you.

Now, I can guess that some of you are breathing a big, deep sigh at having to handle all of this. Yes, it can be frustrating, and it’s how the game is played. Support your revenue cycle team and your practice managers or administrators in getting educated to respond to these clawbacks quickly and effectively. You also need to be educated about these financial aspects because it affects you directly, and I recommend going over any clawbacks with your team so that you understand them completely, and you are certain that your team is following up and appealing them, not just shrugging it off and writing it off. That means you didn’t get paid for the care you rendered for your patient. Don’t let that happen.

So there you have it, your guide to understanding and combatting insurance clawbacks. In the medical world, knowledge is not just the power to heal but also the power to protect your financial well-being. Remember that a proactive approach is always better than a reactive one. This episode aimed to provide a comprehensive yet digestible approach to insurance clawbacks in medical practices. It’s a topic that can be overwhelming, but with the right knowledge and tactics, you can safeguard your hard-earned income and navigate the complexities with confidence.

Thank you for joining us today on Medical Money Matters. If you found this episode helpful, don’t forget to follow or subscribe to receive upcoming episodes automatically. Please join me for our next episode, where we’ll be talking about investing in real estate for your practice space. I’ll be joined by medical real estate expert Brad Christiansen of Colliers International.

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