HOME » Dealing with Refund Claim Demands Case Study

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An account that was denied for authorization based on medical necessity was brought to our attention on the last day of the timely filing deadline. Convergent managed to contact the review company and pushed for an extension. A seven day extension was granted. Convergent then submitted the claim to our UR department. Our UR nurse indicated that the carrier/review company was right in concluding that that this stay was not medically necessary.

Undaunted, we sent demand letters to both the review company and Aetna citing California Health and Safety Code Section 1371.8 which:

1) Prohibits a health plan or health insurer from rescinding or modifying an authorization for services after the service is rendered, for any reason, including but not limited to, the plan's subsequent rescission, cancellation or modification of the enrollee or insured's contract or the plan or insurer's subsequent determination that the plan or insurer did not make an accurate determination of the enrollee or subscriber's eligibility.

2) States that this section shall not be construed to expand or alter the benefits available to the enrollee or subscriber under a plan.

3) Makes legislative findings and declares that by adopting the amendments made to this section by Assembly Bill 1324 of the 2007–08 Regular Session, the legislature, does not intend to instruct a court as to whether or not the amendments are existing law.

Under this statute we argued that the payer cannot decide to rescind the authorization at this point in time due to the fact that services had already rendered to the patient.

We also submitted emails and made numerous follow up phone calls.

After some time, Convergent received a call back from the carrier, who advised that the medical records department reviewed the information that Convergent faxed to them. They overturned the decision for a recoupment on this claim, advising that they would no longer pursue the overpayment. They confirmed their intention to close the claim out and advise Aetna that a refund was no longer due.

They also advised that a letter was sent directly to the hospital with this conclusion, resulting in a $6,587 recoupment for the hospital.