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Shaw Chiropractic
A Medical-Legal Newsletter for Personal Injury Attorneys
by Dr. Steven W. Shaw

Balance Billing by Physicians Still a Challenge
I recently testified at a hearing for an attorney who was unjustifiably grieved by a doctor. The issue surrounded a balance billing effort on the part of the treating doctor. The doctor had an outstanding bill which was paid by a managed care organization at the contracted rate. The doctor claimed that because she had a letter of protection she also had the right to be paid for the services at her full fee. This claim was made even though she had a contract requiring that she would take the lower fee as full payment (plus any co-pay or deductible).

My testimony covered several aspects surrounding participating doctor agreements and letters of protection. Below I will summarize the important aspects of my testimony.

1. A doctor who has a contractual arrangement as a participating doctor with a managed care organization (MCO) must accept the fee schedule of the MCO. They cannot balance bill for the covered services.

2. Most MCO plans do not allow for billing of services above the approved allowance. In other words, if twelve manipulations are approved for chiropractic care and the patient receives fifteen manipulations, the three visits must be written off by the doctor.

3. If a service is not a fee scheduled service (ex. nutritional supplements) the doctor can bill their usual fee. That being said, doctors can get creative when billing and disguise a covered service as a non-covered service so they can bill for it seperately. Some MCO policies will not allow for billing to their members for any service not listed as approved for the provider specialty.

4. Letters of Protection are not necessary to protect a doctor’s interest in a settlement. The absence of a letter of protection does not relieve the attorney of his ethical obligation to escrow funds if properly notified of a valid interest in the settlement.

5. A non-participating doctor can bill a patient any fee they feel is reasonable without consideration of the carriers reimbursement.

6. Non-participating providers can balance bill on partial payments by med pay or insurances policies allowing out-of-network provider care. Fee disputes for any outstanding balances are between the patient and doctor.

7. Medpay coverage provisions usually are primary. A fee reduction by a medpay carrier is not binding on a provider who may balance bill. The balance billing may be to the health carrier, patient or attorney. If the health carrier is a MCO then the doctor is bound by the contractual limitations discussed earlier. Usually, Medpay reimbursements are greater than MCO reimbursements resulting in no additional payment to participating providers.

Given the above, the attorney should examine the motivation of the treating doctor. Doctors who are going to be paid by MCO will have no incentive to provide care above policy limitations. This level of care is usually far less than is optimal for patient outcome. It also is not representative of the injuries which the patient may have sustained. Herein lies the dilemma. Doctors are working for insurance companies rather than their patients. Should the MCO limit care to 10 visits at $40 per visit the medical specials will be $400. I would suspect that economic damages of $400 during a 10 visit treatment plan would be unimpressive to a claims adjuster or defense attorney. This would make a fair settlement unlikely.

On the other hand, MCO participating doctors have the ability to refer to specialists who otherwise might be inaccessible to non-participating doctors. The problem with this is that the participating specialists are as dis-incentivized as the doctors who are penalized for making the referral in the first place.

What then is the best scenario? First, encourage all your clients to purchase Medpay coverage on their auto policy. This eliminates the issues surrounding patient loyalty. Second, explain to clients that by staying in plan they may be jeopardizing their health and their case. Discuss the subrogation issues and that some MCOs require return of payments at case settlement. Encourage clients to see doctors who can treat their condition for the what it is not what the carrier allows in the policy language.

Give the above, The Shaw Chiropractic Group has volitionally withdrawn from all contracted insurance plans. We have medical relationships which allow access to all specialties and diagnostic procedures. We believe that this offers you and your clients a better service which in turn reflects favorably on our office and doctors.