Health Plans Versus Physicians: New Legal Threats
By: Michael J. Schoppmann, Esq.
Kern Augustine Conroy & Schoppmann, P.C.

Over the past few years, a “billing claim review and audit initiative” by United HealthCare (“UHC”) has targeted physicians who have billed office visit codes in the 99211-5 series. Upon compiling the requested data, UHC has generated “Request for Reimbursement” letters to the reviewed physicians, demanding that they return monies paid.

Unfortunately, UHC has also recently, and drastically, raised the stakes in efforts to further reduce physician reimbursement. According to information received by Kern Augustine, physicians receiving these letters have also been reported by UHC to a designated insurance Fraud Prosecutor for consideration of criminal prosecution. As such, those physicians receiving a Request for Reimbursement are now subject to potential criminal investigation. Given this development, any repayment of monies to UHC could be construed as an admission of wrongdoing.

This dramatic escalation of the dispute between HMO’s and physicians on appropriate billing and reimbursement cannot be ignored. Not only are HMOs continuing to reduce reimbursement rates, delay payments and down-code without justification, they are now seeking to enlist the effort of the State’s criminal authorities to bolster their efforts through further intimidation of physicians.

A decision to reimburse UHC is now not only an economic decision; it is a decision that has criminal implications for physicians and their practices. Given this development, no physician should consider responding to a demand for repayment by UHC or any other HMO or third party payor without careful consideration of all the possible consequences of such repayment, and without appropriate guidance. Assessment of the accuracy of the UHC audit, the ability to challenge its findings and the need to take immediate action to mitigate further liability all need to be addressed. Certainly, no physician who receives communication from any authority, and especially an Insurance Fraud Prosecutor or Investigator, should respond without the assistance of experienced health care counsel.

Even if the matter does not result in criminal charges, it may still be referred to other entities, such as the Office of Professional Medical Conduct for investigation and potential disciplinary action. Any such action will trigger a report to the National Practitioner Data Bank, investigation by other states in which the physician holds a license, adverse action by health plans and managed care programs with which the physician participates and public disclosure through the New York Department of Health Physician Profile.

Unquestionably, these tactics only serve to re-enforce the need for every physician and/or medical practice to carefully scrutinize their billing practices, weigh carefully their interactions with managed care companies/health plans and never disregard the potential consequences of these ever increasingly complex, and risky, relationships.