Practice Management Alert

Question: We are in a situation where we billed for services in good faith to an auto carrier. The carrier paid, but it now states the patient wasn't covered at the time. The patient is covered only by Medicaid, and we are having problems getting Medicaid to pay. After receiving the refund request, I spoke with the patient who told me he was covered. At that time, I denied the refund to the auto carrier. The carrier is now making a second request for the refund. What is our legal obligation at this point?
 

Michigan Subscriber

Answer: This question takes more information to answer definitively, says attorney Michael Cassidy, with Tucker Arensberg in Pittsburgh. However, here are some general guidelines about these types of situations:
 
If you have a participation agreement with the auto carrier, it should contain a provision dealing with refunding mistaken payments, Cassidy points out. If you don't have a participation agreement with the carrier, consult the law for your state mandating auto insurance coverage. "State property law and insurance fraud law will also deal with these situations," he advises.
 
"If the patient is covered by Medicaid, the practice needs to bill Medicaid and refund the auto carrier," Cassidy instructs. While there's a chance the auto carrier won't bother to pursue the claim, "it will almost certainly prevail if it does, unless there is something in the state law that provides otherwise," he says.
 
Translation: When choosing your battles, you might want to let this one go. Of course, you can avoid this situation altogether by asking the patient for proof of coverage at the outset.