An Appealing Settlement?

Likely, you’ve at least heard of the BCBS-Thomas/Love Settlement. It’s a complicated affair, but the end result is that the settlement possibly installed a few teeth into your payer negotiation arsenal, such as more transparency in fee schedules, stricter adherence to true medical necessity standards, and more reasonable deadlines for credentialing reviews.

The settlement also required some of the Blues to set up a “Level II Post-Service Provider Appeal” for medical necessity and billing disputes. External review is voluntary and binding for both parties. The purpose is to allow you the opportunity for independent review of the application of coding and payment rules and methodologies by the plans. Sounds like good news, but here are few details you should know:

• When and how to file an appeal - If you don’t agree with the outcome of a Level I appeal - that is, an appeal reviewed at the plan level - you can request a Level II review from the designated third party, MES Solutions. For billing disputes, you must appeal within 90 calendar days of the date on the denial letter. For medical necessity disputes, you have just 60 calendar days. Submit requests by mail, fax, or through the MES Web site.

Before submitting a Level II appeal, make sure you understand the reason behind the Level I denial. Was it based on an allowed plan policy change? Don’t pay for the “privilege” of a second-level review only to receive a ruling that the first-level denial is being upheld on the grounds that it is consistent with a plan’s published policies. Not receiving payment for claims is bad enough; adding appeal fees on top of that to uphold the denial is a double insult.

• What it costs you - Sorry, but the service isn’t free. For billing disputes, you’ll pay a $50 minimum for claims up to $1,000. Greater than that, the “filing fee shall be equal to $50 plus 5% of the amount by which the amount in dispute exceeds $1000 but in no event shall the fee be greater than 50% of the cost of the review.” For medical necessity disputes, the fee ranges between $50 and $250. If you win your appeal, MES will refund your filing fee.

The cost of review is not published, so inquire first before beginning the process so you’re not surprised by unexpected costs. Example: A $30,000 claim may result in a fee as high as $1,500 if the cost to review is $3,000.

Granted, this appeals process is a step toward more equitable treatment of physicians, but I’m concerned that it’s not a fully functional solution. Consider these two red flags:

• $500 minimum disputed amount - This is problematic, especially if you are a primary-care physician, where you could conceivably have 100 or more separate, denied claims whose individual amounts fall under this threshold (e.g., hearing or vision screening services).

• Payer policy changes - Plans currently do a poor job educating physicians on policy changes - changes that drive what gets paid and what does not. Do everything you can to keep up with such changes so you don’t appeal - and pay for - a Level II claims denial, only to find out it’s upheld due to a policy change of which you were unaware.

Frankly, this issue causes me great concern; I am not convinced this appeals process will actually help physicians. To be truly helpful, there needs to be a mechanism through which you can dispute the validity of policies, rather than simply appeal claim and medical necessity denials based on those policy changes.

Susanne Madden

is founder and CEO of The Verden Group, a consulting firm that helps physicians handle the complexity and volume of change in managed care today. She writes and speaks frequently on all aspects of managed care. She can be reached at madden@theverdengroup.com or by visiting www.theverdengroup.com.