Insurance Companies are Making Money of Incorrect Denials

Oh the joys of a New Year and insurance companies not being prepared for change. It happens every year, and although I remain optimistic, the insurance companies always fall short. This year has been no exception.

I dug around and found an article put out by the APTA (American Physical Therapy Association) dated back to Feb. 20, 2016 stating that the Physical and Occupational Therapy evaluation codes would be changing as of Jan. 1, 2017. I'm sure if I spent more time, I'd find one from CMS dated even earlier since this is where these code changes originated from.

That said, insurance companies and the California Department of Worker's Compensation had a year to work on their software systems and fee schedules to incorporate these required changes. Guess what? They didn't meet the deadline of Jan. 1, 2017. In the case of the Department of Work Comp, they sent a letter mid-December stating they would have their evaluation codes ready "sometime near the end of January." They're still not ready, by the way. The other offenders seem to be Blue Shield, Blue Cross, some people have reported that Aetna has an issue and some Cigna claims are also being denied.

Blue Shield, however, is the biggest offender that we are seeing. First they started denying with a PR-8 (patient responsibility - procedure code is inconsistent with provider type). So, let's first take a look at the PR portion of this explanation. Basically, Blue Shield is stating that the fact they don't have the new, required evaluation codes in their system, is now a patient responsibility cost. It's not the patients fault that Blue Shield didn't meet the deadline! So, a few days later, they are still denying the new evaluation codes, but are using CO-8 now (contractual obligation). Now it's the provider's fault that Blue Shield did not meet the deadline. At this point, Blue Shield is not paying any of the initial evaluation at all, skipping it altogether, and paying dates of service that follow it. They have opened up a can of worms that is going to cost them far more to fix than it would have had they just updated their system!

The best part is that the insurance representatives have no idea what is going on. We noticed this the first time on Jan 19th. Each time we called following that date, the story would change on what protocol to take to actually be paid. We finally elevated our question and requests for payment to a supervisor who basically told us, "These codes are not on our fee schedule and we don't know how to process them and pay you." Well, Blue Shield … how about you look at our original contract that has not changed and pay us based upon our contractual rate?! For goodness sake, this isn't rocket science!

Blue Shield and the other insurance plans had plenty of time to spend planning, implementing and testing their systems for these changes, but instead chose not to go this route in order to hold onto provider money. This seems to be their way of continuing to line their pockets with your funds. Let's keep in mind that Blue Shield's profit is $13.4 billion (with a B) dollars. You'd think they'd find it somewhere in that budget to update their software and train their staff within the required time frame.

What's a provider to do? Well, first you have to follow each plan appeals process and grievance protocol and wait the required time frame (in Blue Shield's case its two weeks) to reply and fix the problem you have reported. If they still delay or deny, I have a claim ready to go to the California Department of Insurance. They are the governing agency here in California that investigates and fines these insurance companies for non-compliance. Insurance companies are required to follow a set of guidelines set forth by the CDI in order to operate within state lines. The CDI begs providers to keep them informed if an insurance plan steps out of those set guidelines.

So, by all means, review your denials and delays today to make sure you are not being wrongfully denied due to an over-rich insurance company holding on to your money to make themselves more profitable at your expense.