Case Study – Complex Coordination of Benefits Denial

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

 Issue:

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.

Relevant facts:

The patient was a victim of a crime and required medical attention. When she arrived at the hospital, the hospital notified her insurance and began concurrent review.  Given that the patient’s hospitalization stemmed from a crime, the facility was under the impression that the patient’s care would be completely covered by the state’s crime victim office and, as such, stopped concurrent review with the patient’s insurer.  The patient’s treatment required medical care unrelated to the crime and, to the hospital’s surprise, the state’s crime victim office only paid for the charges directly related to the crime.  This left a large balance unpaid, which was billed to the patient’s insurance company.  Because the hospital had stopped concurrent review with the patient’s insurance company, the claim was denied for lack of authorization.

The payer was an MCO with two levels of appeal. The hospital performed the first level of appeal but was denied.  Unbeknownst to the provider, the payer’s timeframe for the second level of appeal was only 30 days.   Having missed the timeframe for the second level appeal, the hospital received a denial for untimely appeal.  It was at that time, now facing two hurdles, the underlying denial and the timely filing issue, that the provider forwarded the claim to our firm for analysis and possible pursuit.

 Strategic approach:

1. Overcoming the Untimely Appeal

The denial for the first level appeal cited lack of authorization. The second denial was for an untimely appeal.  Upon research of the state regulations with respect to the MCO appeals process, COMAR 10.09.71.03 indicates that Maryland MCO appeals timeframes must allow providers 90 business days for the first level and at least 15 business days for subsequent levels. However, the first level appeal timeframe of 90 days is counted from “the date of a denial.” We filed an appeal with the insurance company that established that the second denial reason of untimely appeal should reset the appeals process to the 90 business day first level timeframe because it is a new “denial” within the meaning of COMAR 10.09.71.03.

2. Overcoming the Root Denial

The root denial of lack of authorization involved favorable facts, including the facility’s timely authorization request. Moreover, although the facility did not comply fully with the contract terms, the attempt to obtain the authorization showed an effort to comply. We contacted the insurance company and discussed this matter with their legal counsel. In addition to our substantive arguments that state law and the facility’s good-faith efforts to comply with the contract dictated payment in full, we also conveyed the sensitive nature of this case. This made the facts more compelling, and the insurance representative was receptive. We think that this may have played a part in the ultimate decision to overturn this case. However, obviously, being able to reference state law or regulations is always helpful when presenting your case to the payer.

Conclusion:

The success in overturning this denial was achieved through utilizing several powerful strategies: researching state law and regulations; noting the optics of the situation and appealing to the common ground of putting the patient first; and emphasizing the strongest facts that show good-faith efforts to comply with the contract terms.