Callagy Law Arizona: medical provider

Important developments regarding Health Insurance Primary (HIP) and other relevant information.

The purpose of this post is to help assist those with questions they have concerning their business or medical practice. The Callagy Law team is knowledgeable in many law practice areas and will frequently post topics ranging from Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. We hope to have this blog shed a light on many common questions.

Health Insurance Primary (HIP) means your health care insurer is primarily responsible for your medical bills after an automobile accident. This means that after an accident, your health insurer will be billed first by your medical provider, and then, depending upon what the health insurer paid or did not pay, your automobile carrier will be billed.

The implications of this for a medical provider are that the provider needs to bill the health insurer, and then, if the medical provider is still paid below what is appropriate under any applicable fee schedules or usual and customary rates, they should then bill the PIP carrier for the balance between what they are entitled to under the law and what they were paid by the health insurer. When the PIP carrier is billed in such an instance, the health carrier’s explanation of benefits needs to be included with the bill.

Not all health care plans are compatible with HIP. Before choosing this option in an auto policy, a consumer should know exactly what is and is not covered in the health care policy. Cost savings can be a reason why people choose to select their own health insurance as a primary source of coverage, because an auto policy will generally be cheaper with this option. However, if HIP is selected with an incompatible health care plan, the consumer will need to pay an additional $750 deductible before collecting from PIP insurance. MEDICARE and MEDICAID cannot be used for the HIP option. If you are not certain of what your health insurance covers, you should select Full PIP Primary for your auto insurance coverage.

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Healthcare Primary and What That Means for PIP Claims

Automobile insurers often deny a medical provider’s claim under the NJ No Fault laws (PIP) on the ground that the service was not “medically necessary.” This denial can take many forms. For example, the explanation of benefits or EOB can state explicitly that reimbursement is denied for “lack of medical necessity,” or because of the result of a Medical Director Review (MDR) or Peer Advisory Review (PAR). The denial could be the result of an IME (Independent medical Examination) or a determination that the patient reached Maximum Medical Improvement or MMI. For the most part, all of these denials are for the same reason that is, the service, according to the carrier, was not medically necessary.

If and when this type of denial goes to arbitration, the clinical records become essential to the provider’s case. It is the clinical records that will form the foundation of the medical necessity argument. But if you are a provider other than the treating physician the records you have will rarely be sufficient.

For example, a surgery center normally will send with its bill the Operative Report. This is necessary to support the fact that the surgery was performed and serves as a detailed description of the nature of the surgery. The Operative Report, however, usually does not support the medical necessity of the surgery. Similarly, the anesthesia record accompanying the bill of an anesthesiologist justifies the time and nature of the anesthesia, but does not add to whether the surgery was medically necessary.

The same is true of ancillary service providers of all medical disciplines. A pharmacy will normally append the prescription to its bill. Similarly, a DME (Durable Medical Equipment) provider, an imaging center or a lab will have clinical records supporting its provision of the service, but not necessarily documentation establishing the medical necessity of the underlying treatment.

It is the treating physician’s clinical records that are necessary for establishing the medical necessity of nearly all the medical treatment. Hence, it is best for an ancillary service provider to obtain, when feasible, not simply the prescription from the treating physician, but any other clinical records the treating physician might have to justify the medical necessity of the ancillary service. The medical notes from the office visit when the prescription was written would be helpful, or the medical notes leading to the MRI, for example, would likely provide all the justification necessary to support the medical necessity of the MRI.

Often the medical necessity of the ancillary provider’s services will rise or fall with the medical necessity of the treating physician’s services, and, accordingly, it is always safer for the ancillary service provider to obtain as much of the clinical record as possible from the treating physician.

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