All posts by Cliff Hoffman

Case Study – Complex Coordination of Benefits Denial

By: Emily Blizzard, Esq., Associate Attorney, The Law Offices of Fotheringill & Wade, LLC


A Maryland hospital cancelled a request for authorization due to the belief that authorization was not required from the secondary payer. Subsequently, it was learned that the insurance company was actually the primary payer for most of the charges, causing denial of the submitted claim. Continue reading

Aetna Discontinues Unpopular Observation Notification Policy- But There’s a Catch

By: Emily Blizzard, Esq., Associate Attorney, The Law Offices of Fotheringill & Wade, LLC

In the March 2018 Edition of the Aetna OfficeLink Update, Aetna announced a major change to their observation notification policy. Effective July 1, 2018, Aetna will “no longer require notification for observation greater than 24 hours.”

This change will come as a relief to many hospitals. The soon-to-be phased out Aetna policy, in practice, caused Aetna to refuse observation notification until 24 hours had elapsed, but then after the 24 hour mark would require notification within the inpatient notification timeframes. This differs from most insurers, who would require observation notification for observation care of any length, or not require observation notification at all. Aetna’s policy proved to be difficult to operationalize for many facilities, and in our experience, led to denials. For example, we have seen administrative denials under this policy for lack of notification because facility tried to notify after only 23 hours.

However, there is a catch. With the change to no longer require notification for observation over 24 hours, Aetna has also stated that it will “no longer cover observation services that extend beyond 48 hours.” We expect that this hard cap on observation hours will prove challenging for many hospitals, particularly for the rare occasion when a patient meets neither discharge nor inpatient admission criteria after 48 hours in observation.

We recommend a two-pronged approach to address hard caps on observation.

  1. Addressing existing denials through the appeals process:
    1. Tell an effective story of why your patient required observation care over 48 hours. Why specifically did your patient meet neither discharge or inpatient criteria?
    2. Cite to the insurer’s own clinical policy: Does the insurer’s clinical policy forbid admitting a patient inpatient under your circumstances? Does the insurer’s clinical policy discuss situations in which observation stays of over 48 hours would be considered medically necessary?
    3. Use your best facts: Did the insurer approve observation care for longer than 48 hours? Does state law, federal law, or your contract dictate coverage under these circumstances?
  2. Preventing new denials:
    1. Contract around the policy: If a policy like this has proven costly for your facility, have you considered working modifications to the policy into your contract?
    2. Scrutinize your internal administrative and utilization review protocols: Are you conducting regular, documented reviews against a major criteria set? Are patients being upgraded to inpatient or discharged when appropriate?

Given this change effective 07/01/18, facilities should make sure that their utilization review and case management staff is aware of this change so that it is incorporated into their practices. As with anything in the insurance world, an ounce of prevention equals a pound of cure. We encourage providers to take action now so that their facilities are prepared for these new policies when they go into effect.

SOURCE: Aetna March 2018 OfficeLink Update

Emily Blizzard, Esq. is an associate attorney at The Law Offices of Fotheringill & Wade, LLC.  Ms. Blizzard represents healthcare providers in the appeal of denied and underpaid claims and has experience with both governmental and third party payers. Ms. Blizzard graduated magna cum laude from Michigan State University College of Law and is admitted to the Maryland Bar.


An Aetna Medical Director Admitted He “Never Once” Reviewed Medical Records- What Now?

Emily Gillingham, Associate Attorney at Fotheringill & Wade, LLC

Almost every day, one of our hospital clients refers a case to our firm that has us questioning how an insurer could have reached the decision they did.

We got a unique look into the inner workings of Aetna’s utilization management department this week with the bombshell revelation, reported by CNN, that a former Aetna Medical Director, Dr. Jay Ken Iinuma admitted in a deposition that he never looked at a patient’s medical records during his time at Aetna.

What’s worse? Dr. Iinuma further testified that this was what he was instructed to do in Aetna’s training for the position.

The State of California’s insurance commissioner has launched an investigation into the practice, and we expect other states to follow. Not only does this practice raise serious questions about the plan’s adherence to member agreements to cover medically necessary care, but it may run afoul of state regulations requiring that utilization review be performed by a qualified medical professional.

What should medical professionals do with this information? It is a good practice to have a robust denials management system in place at your practice or facility. Take advantage of peer-to-peer review rights and file appeals. Keep an eye on timeframes, as a lot of contracts take away an opportunity to challenge even egregious denials after these timeframes pass.

At Fotheringill & Wade, some effective strategies we employ include:

  • Checking the credentials of the person at the insurer who made the decision. Was it a medical professional? Does the contract or state law provide for a doctor versus a nurse to issue the denial? Can we discount the insurer’s position by noting that the reviewer has no experience in the patient’s condition?
  • Finding the insurers’ clinical policy and referring directly to it. It is effective, though time-consuming, to match medical record citations with clinical policy prongs. Did the insurer use the correct policy for the patient’s condition to issue its denial? Assume (and now we have reason to!) that the doctor isn’t taking even a cursory glance at the medical records.
  • Pushing back when a denial is egregious. Complain! Take the matter to your provider representative; talk to the plan’s compliance department or legal counsel. Take advantage of external appeals. Don’t take “no” for an answer when the plan seems to be ignoring the words on the page.

As with all things, experience counts. We have a great track record of helping our hospital clients with insurance denials. If you are struggling with insurance denials, you aren’t alone! Contact us to discuss your insurance denial management.

CMS Announces New and Expanded Appeal Settlement Initiatives

On Friday, November 3, 2017 CMS announced that it will make available a new settlement option for eligible providers and suppliers with a low volume of Medicare Part A and B claim appeals pending at OMHA and/or the Medicare Appeals Council. CMS also announced that OMHA will be expanding the Settlement Conference Facilitation Process for certain appellants that are not eligible for the LVA option.

Low Volume Appeals

The low volume appeals settlement option (LVA) will be limited to appellants with a low volume of appeals pending at OMHA and the Council. Specifically, appellants with fewer than 500 Medicare Part A or Part B claim appeals pending at OMHA and the Council, combined, as of November 3, 2017, with a total billed amount of $9,000 or less per appeal could potentially be eligible, if certain other conditions are met. CMS will settle eligible appeals at 62% of the net allowed amount. The announcement is posted on the CMS website.

Settlement Conference Facilitation (SCF) Expansion

SCF is an alternative dispute resolution process at OMHA and gives certain providers and suppliers an opportunity to resolve their eligible Part A and Part B appeals. Additional information on SCF can be found on the OMHA website.

American Hospital Association Calls on CMS to Address ‘flaws and inaccuracies’ in OIG Audits

In a letter dated October 2nd, the American Hospital Association has called on CMS to take a more active role regarding hospital compliance reviews conducted by the Office of Inspector General (OIG). Citing fundamental flaws and inaccuracies, both in the OIG’s understanding and application of Medicare payment rules and in the procedures used to conduct the audits, the AHA asserts that the flaws “result in vastly overstated repayment demands, unwarranted reputational harm, and diversion of hospital and physician leaders’ time from their core mission of caring for patients.” The AHA further asserts that the OIG’s mistaken legal interpretations result in uneven application of Medicare payment rules and that there is a lack of consistency in the appeals process.

Due to the OIG’s extrapolation of findings to all claims in an audit period the AHA asserts that the negative effects of the audits are “exacerbated.” Hospitals are forced to appeal each claim, creating a severe financial and reputational impact that continues long after the OIG’s errors are corrected on appeal. The AHA letter expressed concern that, based on information relayed in their meeting, the OIG now plans to extrapolate in every single hospital audit, despite the legal and statistical limitations on extrapolation and the significant concerns about the OIG’s sampling and extrapolation methodologies.

The AHA letter reiterates the following suggestions to improve the accuracy and fairness of the OIG audits, that were provide to CMS during their meeting:

  1. Extrapolate only if there is a significant error rate
  2. Delay extrapolation until the appeals process is complete.
  3. Allow rebelling of denied inpatient claims regardless of the usual timely filing period.
  4. Provide feedback to the OIG to facilitate issuance of an amended audit report and improvements in audits.
  5. Review and address legal issues raised by hospitals before an audit is performed or before a repayment demand is issued.

The full AHA letter can be found here.