Billing and Collections Q&A - June 2019

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By Lisa Lake

Count on Got FAQs? to help answer your toughest billing questions. This month's column addresses manufacturers' warranties and the timeframe that insurers have to recoup payments made in error. 

Q: I started working for an O&P provider in Texas. I was asked to update our patient forms to ensure they are up to date and compliant. In the procedure manual I came across a warranty form that stated that every product sold or rented by our company carries a one-year manufacturer's warranty. Is the warranty mandated by Medicare?

Also, can you advise how often a patient can receive a prefabricated knee brace and where I can find the codes and what I need to bill correctly for them? What is the definition of a prefabricated knee brace? Any information you can provide will be greatly appreciated.

A: Although Medicare has not created an official definition of a warranty, it is commonly considered to be a guarantee by a manufacturer promising to repair or replace an item, if necessary, within a specified period. Warranty requirements are primarily regulated by each state. Medicare does not specify warranty requirements except to say that repairs and replacements covered by warranties are not eligible for program reimbursement. You can read the DME MAC publication called Correct Coding - Warranty, Reasonable Useful Lifetime (RUL), and the Minimum Lifetime Requirement at https://bit.ly/2ZT7VDu.

According to the medical policy, "correct coding of prefabricated knee orthoses (L-1810, L-1812, L-1820, L-1830-L-1833, L-1836, L-1843, L-1845, L-1847, L-1848, L-1850, L-1851, L-1852) is dependent upon whether there is a need for ‘minimal self-adjustment' at the time of fitting by the beneficiary, caretaker for the beneficiary, or supplier that does not require the services of a qualified practitioner." Minimal self-adjustment is defined as an adjustment the beneficiary, caretaker for the beneficiary, or supplier of the device can perform and that does not require the services of a certified orthotist or an individual who has specialized training. The complete medical policy on prefabricated knee orthoses and how often a patient can receive one can be found at https://bit.ly/2zLmoVj. The chart that reflects the useful lifetime expectancy is on page 23.

Q:  I work for a provider in Alabama, and we recently received a request for a refund from BCBS of Alabama. We received this payment over two years ago. Can an insurance carrier request money that was paid that long ago? They stated they were not the primary insurance carrier and should not have paid the claim. Before we spend the money to hire an attorney to dispute these requests I wanted to know if you could shed light on how this can happen.

A: Healthcare insurers are subject to various state laws regarding prompt payment of claims. After paying claims in compliance with the time frames set in such laws (e.g., 30 days), an insurer may choose to conduct a claim audit to verify claims were paid appropriately and accurately. As a result, an insurer may try to recoup payment from a healthcare provider for claims paid in error. It may do this by reducing payments currently owed the provider, withholding future payments, or otherwise requiring a refund from the provider. States that have a statute of limitations on an insurer's retroactive claim denial include Alabama, Florida, Georgia, Maryland, New Hampshire, Rhode Island, Tennessee, Texas, Virginia, and West Virginia. The time limit in which to retroactively deny claims varies from six months (Maryland, Texas) to 30 months (Florida). Often excepted from such limitations are retroactive denials for claims submitted fraudulently. In Alabama an insurer is prohibited from retroactively denying, adjusting, or seeking a refund of a paid claim for healthcare expenses submitted by a healthcare provider after one year from the date the initial claim was paid or after the same period of time that the provider is required to submit claims for payment pursuant to a contract with the insurer, whichever occurs first. If the claim was subject to coordination of benefits with another insurer, the time period extends to 18 months. If a claim was fraudulent or a duplicate payment, there is no retroactive review time limit (Ala. Code § 27-1-17(e) and (f)). You can find the Alabama statute at https://bit.ly/2LkTUv3.

Lisa Lake is an independent medical consultant with over 24 years of experience in the O&P industry, increasing providers' revenue by product recommendation, product and billing knowledge, and contract access assistance. She is a nationally recognized speaker on billing reimbursement and government compliancy. While every attempt has been made to ensure accuracy, The O&P EDGE is not responsible for errors. Lake can be contacted at llakeusa@gmail.com.