If I were to argue a carrier response like that, I would ask for a statement in writing, providing either their legal written policy of observation care billing, or a legal statement indicating why they are not required to pay for these services with POS 22. Specifically when federal insurance carriers, such as Medicare, and state payors, such as Medicaid, allow, pay and submit POS 22 as appropriate for hospital observation care E/M services.
Also, I would give the carrier a deadline to reply by, perhaps 14 to 30 days. In addition, I would advise the carrier, in the same letter, that after that time-frame, this matter would be turned over to our company's legal counsel for resolution.
I have been known to not only cc the provider of the services on the letter, yet the patient too.
Whatever you write in a letter, the message to the carrier should be loud and clear, without being abusive, that you expect either legal documentation of why they won't pay, or payment. That is that.
Perhaps also check your states clean claim laws and find out how timely carriers are supposed to be paying clean claims under the prompt payment laws. Maybe reporting the carrier for inappropriate actions is also in your providers best interest.
It's becoming ridiculous how much we have to fight, at times, to have things paid appropriately. There are carriers out there who will attempt many elusive maneuvers attempting to get away without paying. It's our responsibility to take a stand and not allow that to happen, by saying to the effect that we want them to prove to us why they should not have to pay something when other carriers are paying - specifically when we know in our hearts it is truly reimbursable.
Ok, I am getting off my soapbox now, LOL. It just burns me when a carrier blatantly tries to not reimburse services that are truly deserving reimbursement. Hope you have a great day
Kris