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Salzman contacted the Interdivisional (39/42) Task Force on Managed Care and Health Care Policy and told us a tale of how he solved a problem with Medicare Supplemental Insurers in Michigan. The supplemental insurers had not been reimbursing patients for the full “psychiatric reduction plus copay.” He succeeded in having the Michigan insurance commissioner force all companies under his jurisdiction to retroactively correct all reimbursements for all patients for three years. Unfortunately, this victory only affects patients under the Michigan rules. Other states and ERISA plans will need to be dealt with by others, and hopefully, based on Dr. Salzman’s success, readers or state organizations can pursue a similar course in the other 49 states. Dr. Salzman’s report is presented below.
HISTORY: Several years ago, I noticed that some insurers were miscalculating the secondary amount due to Medicare subscribers after Medicare paid as the primary insurer. Confusions regarding Medicare’s terminology, the psychiatric reduction Medicare invokes, bad arithmetic and other issues were resulting in providers being paid considerably less than they were due. I contested these issues on a case-by-case basis with a variety of insurers, but was getting annoyed with that process. I got annoyed enough often enough that I raised the issue with the State of Michigan Office of Financial and Insurance Services. They helped me
resolve one pernicious case (amazing how quickly the insurance company responded to THEM), but I asked why OFIS did not ask for an audit of their books for ALL Michigan therapists, since the error was clearly systematic. It felt like hitting a wall.
OUTCOME: With a lot of persistence, additional complaints from other therapists, and the incredible support of some of the OFIS staff, the issue was actually brought to full consideration. OFIS found that, indeed, some insurers were prone to getting the numbers wrong and that they needed to get them right if they were to continue doing business in Michigan. They drafted a document to this effect. The link below is to the outcome. http://www.michigan.gov/cis/0,1607,7-154-10555_12900-109269--,00.html
On Jan 21, 2005, OFIS issued Bulletin 2005-01-INS, instructing all Medigap and Medicare Supplemental Insurers regarding the proper calculation of the supplemental amount to be paid. Amazingly, OFIS further orders them ALL to conduct their own internal audits to determine whether they have paid such claims correctly since 2002, to reprocess and pay any claims not correctly paid WITH a 12% per year interest, and to report to OFIS that this has been done on or before March 15, 2005. After March 1, 2005, any insurer paying mental health Medicare supplemental claims incorrectly will be considered to be committing a knowing or persistent violation of Michigan code and will be pursued for enforcement.
SO? WHAT DO I DO ABOUT THAT?: There is not much you need to do. If you have received lower than expected Medicare supplemental payments (e.g. not equal to what Medicare paid as primary for the claim), you should expect a check from the insurance companies involved. If you don’t get one, you can contact them and reference the Bulletin. If you still don’t get resolution, you can refer the matter to OFIS. It would also be ok to pass the word on this item to your colleagues. Do note that not all insurers or plans are subject to this bulletin or the oversight of OFIS (e.g. self-insured plans, non-supplemental plans). If you have been reimbursed for the copayment (not the deductible) by an insurer secondary to Medicare, it is likely that they are subject to the OFIS bulletin. If you think you have been underpaid, there is some serious recourse now available.
Kenneth Salzman can be reached at whitecrane@usa.net
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