In the complex world of healthcare, one of the most challenging aspects for providers and organizations is dealing with managed care disputes. These disputes often arise when health plans fail to reimburse healthcare providers for services rendered adequately. Whether it’s a physician’s practice, acute care facility, or outpatient center, the financial impact of underpayments and denials can be devastating.
Managed care litigation, particularly in high-volume scenarios, can significantly strain healthcare organizations’ revenue cycles. Fortunately, contingency fee agreements offer a solution that allows providers to pursue their claims without shouldering the financial risk of litigation. Trevor Biglin, Esq. from Abril Law in Miami, discusses the intricacies of volume-managed care litigation and how healthcare providers can benefit from contingency fee arrangements.
Understanding Volume-Managed Care Litigation
Volume-managed care litigation refers to disputes between healthcare providers and payors, often involving hundreds or even thousands of claims. According to Biglin, “Managed care disputes typically arise when the payor (health plan) fails to reimburse for services rendered by healthcare providers adequately.” These disputes can stem from ambiguous contracts, miscalculated reimbursement rates, or cases where there is no contractual relationship, leaving reimbursement governed by state statutes.
Healthcare providers face many claims, many of which involve underpayments or denials for similar reasons. This volume creates a challenge for healthcare organizations’ revenue cycle departments. “Providers oftentimes lack the requisite experience and labor to effectively address and resolve each of these problem claims internally,” Biglin explains. Without a streamlined process for resolving these claims in bulk, healthcare providers are left vulnerable to significant financial loss.
Common Challenges in Volume-Managed Care Litigation
Healthcare providers face several challenges when dealing with volume-managed care disputes. One of the most significant issues is the ambiguity of managed care contracts. “These contracts can be complex and difficult to understand for laypersons,” Biglin notes. Misinterpretations can lead to disputes that snowball over time, making resolution even more challenging.
Another common issue is billing and reimbursement disputes. Providers must carefully navigate the terms of insurance policies and keep meticulous records to substantiate their claims. However, many healthcare organizations do not have the internal resources to tackle these disputes effectively, especially when faced with large volumes of claims. This is where legal expertise becomes invaluable.
“Seeking the expertise of legal counsel can be beneficial in crafting a strategy to quickly and effectively resolve disputes,” Biglin stresses. An experienced healthcare reimbursement law firm, equipped with state-of-the-art technology, can analyze claims in the aggregate and implement solutions to address these disputes in bulk.
The Benefits of Contingency Fee Agreements
One of the key concerns for healthcare providers is the cost of pursuing legal action. Many are hesitant to engage legal representation due to the potential financial burden. This is where contingency fee agreements come into play. “In these arrangements, attorneys are compensated only if they prevail on the provider’s behalf,” Biglin explains. This eliminates the upfront financial risk for healthcare providers, making it a practical option for pursuing disputes.
Contingency fee agreements align the interests of both the provider and the attorney. The law firm only gets paid if they successfully recover reimbursement on behalf of the provider. As a result, both parties are motivated to achieve the best possible outcome.
Why Contingency Fee Agreements Are Attractive for Healthcare Providers
Contingency fee agreements are particularly suited for reimbursement-related healthcare cases, especially those with significant financial stakes. “These agreements are attractive to providers as they are insulated from the uncertainty inherent in hourly fee agreements,” Biglin says. Traditional billing structures, which involve hourly fees, can lead to exorbitant costs that may exceed the amount in dispute.
In contrast, contingency fee agreements provide a cost-effective solution, particularly for lower-balance claim denials or underpayments. Healthcare providers can pursue their claims without worrying about the financial burden of legal fees, and they benefit from the law firm’s shared interest in maximizing the recovery.
How Healthcare Providers Can Protect Themselves
Biglin advises healthcare executives and practitioners to take proactive steps to protect themselves from potential legal risks in volume-managed care disputes. “It is important to regularly review networking agreements between the payors and providers to ensure the terms are clear, fair, and reflect current reimbursement trends,” he says. Providers should also implement robust compliance programs to stay in line with regulatory requirements.
One of the most critical steps is maintaining detailed records of all interactions and transactions with managed care organizations. “Keeping detailed records is essential in supporting your position in case of disputes down the line,” Biglin explains.
Additionally, working with experienced legal counsel can help healthcare providers manage their accounts receivable and foresee problematic trends. “Relying on an experienced healthcare reimbursement law firm can assist in managing and controlling accounts receivable,” he adds. By identifying issues early, providers can reduce revenue drain and protect their financial stability.
Choosing the Right Legal Representation
When selecting legal representation for managed care disputes, healthcare providers should prioritize attorneys with specific experience in this area. “It is crucial that your legal counsel has familiarity with the nuances of patient registration, coding, billing, and all phases of the revenue cycle,” Biglin emphasizes.
Healthcare providers should also ensure that their legal representation is equipped to handle sensitive information securely, particularly regarding Protected Health Information (PHI). Clear communication about the scope of representation and the structure of contingency fee agreements is essential to ensure both parties have aligned expectations.
Volume-managed care litigation presents unique challenges for healthcare providers, but they can navigate these disputes effectively with the right legal support and contingency fee agreements. By understanding the benefits of these agreements and selecting experienced legal counsel, healthcare organizations can protect their financial interests and achieve favorable outcomes in their legal matters.
Article Originally Posted by the South Florida Hospital News & Healthcare Report:
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