Right now, with a stroke of a pen – an insurance company can renege on their payment for a medical procedure, and you could get stuck with $10,000s in medical bills.
It’s called retroactive denial. And It’s completely legal.
In Florida, the patient, the doctor, or the hospital who carried out the procedure may end up holding the bag.
State Representative Dr. Joel Rudman hopes his bill, House Bill 1335, will amputate insurance companies’ ability to ‘claw back’ money from patients they initially approved for procedures.
“I don’t think there is a physician alive who was in support of this practice,” said Representative Joel Rudman about the current setup. He believes that it gives an unfair advantage to the insurance companies.“I think it just goes to show you how insurance companies have ruled the roost in Florida for many years,” Rudman added.
Rudman unveiled the bill at a ceremony before a platoon of white-coated doctors at the Blackstone Golf Course in Walton County, near Mossy Head.
Although he did not have a specific number of retroactively denied patients – he told me every single doctor he knows had seen a situation where the insurance company pulled a ‘Lucy’ (from Charlie Brown) with insurance for a patient.
@midbaynews Dr. Joel Rudman (R-Navarre) introduced a bill for the next legislative session in #Tallahasseee that would stop #insurancecompanies from clawing back money way after a procedure is done because they felt like they shouldn’t have paid it. #medicine #florida #flaleg #sayfie #sayfiereview #joelrudman #statepolitics #flpol ♬ original sound - Mid Bay News
Under Florida law, insurance companies like Blue Cross and Aetna can take their money back from previously-approved procedures up to a year after the initial claim was filed and paid out.
Here’s how it works – when you go in for a medical procedure – the medical facility checks your health insurance to see if it will be covered. The insurance company gives a statement that, critically, is not a promise to pay that says that the procedure either is or is not likely covered by insurance. After the procedure, the insurance company has 365 days to claim their money back, and someone – either the medical provider or the patient- must pay it.
Should the medical providers decide to fight the retroactive denial – the insurance companies have recourse: “Under current Florida statute, if there is a dispute. Let’s say that they ask for their money back and the hospital fights that request, the insurance is just currently allowed to take that same amount from the next Blue Cross patient who goes to that hospital, or the next Aetna patient that visits that physician.”
While the bill seems like one that sits squarely in the arena of insurance – Representative Rudman argues it has an equal effect on businesses’ bank accounts, too. Specifically, it creates cash flow issues for doctor’s offices, surgery centers, and hospitals. “When you look around – businesses are having a hard time. Businesses are struggling in this economy and medical practices are no different. It’s hard to keep the doors open when you are paid legitimately for a legitimate service and then a year later can say ‘I want that payment.’ If you ran a restaurant and someone paid with their American Express card for their meal – and a year later, American Express said ‘we demand our money back or we are going to withhold money from the next customer who comes in, I guarantee you’d fight that with all your might. That’s exactly what we’re doing.”
If the bill becomes law, the insurance companies would still be able to make clawbacks but would only have 20-45 days from the initial claim. The difference in the amount of time is based on the claim. “We expect you to use that 20 to 45 days to pay for a claim,” Representative Rudman said, “We expect you to use that 20 to 45 days to ensure that the claim is properly adjudicated and properly paid.”
“This will change existing Florida law so that, when your insurance pays for something, and when they agree they should pay for it, they can’t change their minds 11 months later,” Representative Rudman said.
This would not apply to Tricare, Medicare, or other federal programs.
Finally, the bill carves out an exception for fraudulent claims.
Like all other bills – HB 1335 has a long way to go before it becomes law in Florida. It will have to pass through the various committees that will be assigned to review it. After that – it’ll have to pass the entire house of representatives. At the same time, what’s known as a companion bill will have to pass the same hoops in the Florida State Senate. Once through both straightaways with hurdles, the bill has to be signed by the governor (or not vetoed within seven days of presentation to the governor).