Physicians Strike Back At Employers' Collection Firms

(MoneyWatch)  As healthcare becomes more expensive, self-insured employers are ratcheting up the pressure on physicians by hiring outside collection firms to dun them for what the employers claim are past overpayments. Physicians are angry about these ex post facto demands, which often concern claims that were paid years ago, and they have enlisted their medical societies to fight the companies that are doing this.

In the most recent clash, the Tennessee Medical Association has sued Health Research Insights (HRI), a Franklin, TN-based firm that has sent collection letters to physicians in Georgia, Kentucky, Tennessee and Texas. Other defendants in the suit include the Metropolitan Government of Nashville and Davidson County, TN, and Nashville's Board of Education, which runs a self-insured plan for school employees. Blue Cross and Blue Shield of Tennessee, the plan's administrator, is also named in the suit, although the insurer disavows any relationship with the collection firm.

The suit, which alleges fraud, says that HRI keeps 40 percent of whatever it collects. The TMA wants a court to enjoin HRI from making any further efforts to collect from physicians. An earlier protest by the Georgia Medical Society against HRI's work on behalf of Georgia Pacific led to a suspension of those activities.

Health plans audit physicians and may force them to return overpayments. But most states have limits on how far back the insurers can go. Self-insured employers, which are governed by the federal ERISA law, have no such limits.

While HRI is said to be using employers' claims data as the basis for determining that some physicians were overpaid, other collection firms sometimes demand medical records from doctors. Consultants and attorneys say that these documents are frequently related to services that physicians provided when the self-insured employer had a different plan administrator. The privacy provisions of the HIPAA law allow the employer to see the records, although physicians can refused to provide them.

This battle over payments is yet another consequence of the patchwork quilt that we call a healthcare system. With dual regulations governing self-insured and fully insured plans, as well as public and private forms of insurance, it's a wonder that anybody can even understand what's going on, let alone make it work. It will be interesting to see how Congress addresses ERISA in its healthcare reforms. If the feds take over insurance regulation from the states, it's hard to see why self-insured employers should be treated differently than anybody else.