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Jul 27

Send plan a notice if an incorrect payment violates the contract

Like most providers, you probably dread having to cope with the administrative hassle of dealing with a plan that pays you incorrectly. But if you’re confident that your claim is valid and correct, there’s a tactic you can use to bypass that hassle and get paid more quickly, experts say.

Resolving this issue can be as simple as sending the plan a notice that the nonpayment or underpayment violates the contract. This will often work to prod the plan to pay you appropriately, says managed care consultant Maria K. Todd.

Plan contracts often allow plans to legitimately deny claims or to pay less than the claim amount. But there are also situations in which the plan’s failure to pay a claim you’ve submitted can’t be justified under the contract.

For example, the plan may fail to pay the claim on time without giving you notice that there’s something wrong with it. Or it may incorrectly calculate your payment by not following the method outlined in the contract.

When situations such as these come up, you may want to take the position that the plan’s failure to pay in accordance with the contract violates the contract, says Todd, who successfully uses this tactic on behalf of her provider clients.

“If you can show that you’re supposed to get paid a particular amount on a claim under the contract and the plan didn’t do that, you have the right to tell the plan it has violated the contract,” Todd explains. “It’s a hardball tactic that a provider shouldn’t use routinely or lightly, but it should be in every provider’s arsenal.”

Notices are successful because plans take accusations of contract violations seriously. “The plan will typically look into the issue quickly,” says Todd.

The strategy also works because it requires you to send the notice to the plan representative identified in the notices section of your contract; this representative is usually a plan executive with the authority to resolve the issue. “You’re no longer dealing with a claims processor,” she says.

Editor’s note: This tip was excerpted from HCPro’s monthly newsletter, Managed Care Contracting & Reimbursement Advisor. For more information, click here.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →