Recovery ruling goes against MAMSI State asserts limitation on retroactive deductions

Health insurance

August 04, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

Mid-Atlantic Medical Services Inc., a Rockville managed-care insurer, misinterpreted a new state law limiting recovery from doctors and hospitals after a claim is paid, a hearing officer for the Maryland Insurance Administration has ruled.

In a decision announced yesterday, the hearing officer, Thomas Paul Raimondi, associate deputy insurance commissioner, said MAMSI may deduct past overpayments from future payments only within six months of paying the claim.

The dispute arose as a result of a law limiting retroactive deductions that took effect Oct. 1. It was enacted by the legislature in response to complaints from doctors and hospitals that had been paid for work only to have money deducted much later.

Insurance Commissioner Steven B. Larsen said the law means that after Oct. 1 MAMSI could not recover overpayments for claims older than six months.

MAMSI did not dispute that the six-month limit applied to claims for medical care delivered after Oct. 1, but it argued that it could still deduct retroactively for claims delivered before the law became effective.

"I can only say an assistant attorney general, the attorney general, the insurance commissioner and a hearing officer have all reviewed their arguments, and no one has found any merit to them," Larsen said yesterday.

There are no further administrative appeals open to MAMSI, which can follow the interpretation or challenge it in court, Larsen said.

Elizabeth Sammis, senior director for corporate communications at MAMSI, said Larsen's interpretation would lead to "waste, inefficiency and higher insurance premiums" because insurers could still attempt retroactive recoveries through court action. She said MAMSI is considering whether to appeal the dispute.

In addition to the order interpreting the law, the insurance administration still must review 75 disputed claims that MAMSI declined to pay based on its interpretation.

Both Larsen and Sammis said they did not know how much money was involved in the 75 disputed claims, or potentially in other claims.

However, Larsen said, "There must be substantial sums at stake generally, because of the vigorous way they have been resisting."

Sammis said that when MAMSI seeks retroactive recovery of a claim, it is because a review or audit has determined that the patient was not a member of MAMSI at the time the care was delivered or because the service provided was not covered by the patient's policy.

She said MAMSI does not seek retroactive recoveries because of disputes over whether the care was medically necessary.

Sammis said the MAMSI subsidiaries covered by the order insure 329,819 people under Maryland contracts.

Pub Date: 8/04/98

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