HOME » Bill Review/Usual & Customary Denial Success Story Case Study

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A patient’s self-funded Health Plan did not pay at the full applicable contracted rate due to bill reviews. As a result, significant charge amounts were disallowed, resulting in an underpayment amount of $123,512.03.

Convergent pursued multiple appeals with the health plan, contesting their determination that the drug charges exceeded “usual and customary” amounts, and stressed that the “Average Wholesale Price” formula used for review was in no way supported by the actual plan language. The plan itself did not set hospital cost (for drugs or for any other services) as the applicable factor for determining what would be “usual and customary,” but simply provided for charge comparisons to other hospitals providing similar services.

After several demands for reconsideration and full allowance of the charges in question, the health plan continued to uphold its prior determination. Convergent’s Legal Department worked with the client to escalate to this matter to the local counsel level. Local counsel initiated litigation in connection with the matter, incorporating Convergent’s contentions that the disallowance applied were not supported by the plan language, or by any other applicable factors, and that the terms of a contract already controlled the payment rate due on the claim.

The health plan and the repricer settled the claim for more than 80% of the amount in dispute.