Keep it Simple Today: Today we notice the use of the term Claw Back and remind ourselves how this feature works in health insurance. We are aware of the frustration in dealing with health insurers. Our only protection is put it in writing, confirm it in writing, complain in writing and understand that "going green" in terms of doing away with medical services and insurance paperwork IS NOT AN OPTION if you want to protect yourself.
We're hearing a lot about "Claw back" in connection with financial firms and specifically with the fiasco revolving around Mr. Madoff, the current Ponzi scheme scoundrel being hammered in the papers. A claw back is a financial benefit that is then taken back because of some circumstance...the following is one way it works in health insurance.
My father was covered by four health insurances, one from his employer, one from his spouse's employer, one from Medicare and finally long term care. In connection with his illness, he was treated to the tune of a million dollars worth of medical care so you can imagine how much paperwork was generated.
Two years after his death, a notice was sent by the Visiting Nurse Service that his insurer had done a claw back on monies paid on his behalf to the Visiting Nurse Service and therefore, his spouse was now responsible for the amount taken back by the insurance company. The insurance company took the money back from the Visiting Nurse Service because it said it was NOT the primary insurer because his employment had ended prior to the fees and therefore his secondary insurer, his spouse's insurance should have been primary and should have first considered the charges.
The Visiting Nurse Service sent the bill.
The first step was to request itemized bills and explanation of benefits forms from the VNA. These statements indicated that in fact the employer benefits had paid a portion of the bills FIRST. While this was fine when the VNA services began, after termination of employment, these benefits became COBRA benefits which became secondary to the insurance coverage by the spouse's insurance coverage. Therefore, the claw back was proper...after benefits become COBRA, the primary insurer is the formerly secondary insurer, the spouse's insurance.
But the VNA did not submit the bills to the secondary insurer, they skipped over the secondary insurer and sought the balance of uncovered expenses from Medicare. Medicare paid the balance. But now that the COBRA insurer had done a claw back and taken back the amounts they paid, how would the VNA get paid?
The answer is that the VNA SHOULD have submitted the bills to the secondary insurer BEFORE submission to Medicare.
Step One: When the provider is filing claims, make sure the provider has a list of insurance coverages, this avoids any claim on the part of the provider that it didn't know about secondary insurance.
Step Two: Failure to submit the balance to the secondary insurer BEFORE the VNA submitted the balance to Medicare means that the secondary insurer will NOT pay on the claim because the time for submitting claims has expired. Always submit claims to EVERY insurer to preserve your rights of timely claim submission.
Step Three: The VNA submitted claims to all insurance companies, not the patient, therefore, the failure was the VNA's. If a provider is filing all claims, not only to your primary insurer, make sure you have paperwork evidencing that the provider has knowledge of all health insurers.
Step Four: The first insurer sent a notice out to the VNA (not the patient) a full year before the VNA notified the patient. If the patient had known about that notice then the patient could have advised the VNA to submit the claim to the secondary insurer. Notice of a claw back should be handled immediately so that time to obtain the money from the proper entity is still available. Even if the VNA had skipped the secondary insurer who became the primary insurer after original benefits became COBRA benefits, it could have acted on such notice in a reasonable period of time and gone back to the secondary now primary insurer.
Step Five: In this case, the VNA stated that it did not submit to the secondary insurer (admitting that it knew about such insurer) because the secondary insurer would not have covered the expense so it skipped the secondary insurer and went straight to Medicare. Do not skip over insurers.
Step Six: This is not an excuse. The VNA should have gone to the secondary insurer before Medicare.
Being aware of the ORDER OF INSURANCE when you have multiple coverages is important ONLY if you don't submit your claims to every insurer. Always submit your claims to all your insurers, this will preserve your rights to go back to that insurer on any unpaid claims even after the appeal period has expired if new facts arise, such as the claw back.
A word about the claw back...Even if it is not called a claw back, this tool for taking back money paid can be identified by language that notes claims were "mistakenly" paid or "overpaid". Keeping your files by date of service with the original bill, the EOB's on a claim, stapled together will allow you to go back and find your paperwork for a specific claim.
