Justifying Costs to Ins. Co

Justifying Costs to Ins. Co

John T. Brinkmann, CPO, FAAOP

1/17/2003

Original Question:

Dear List Members: An insurance company recently denied coverage for
L5301 (definitive endoskeletal BK base code) and demands an itemized
description of the components and costs involved in providing this item
prior to agreeing to pay for it. Strangely, they covered other codes
involved in providing the prosthesis, but denied this one....
I'd appreciate any info on how you have handled similar situations.
Obviously, the cost of the materials is minimal - what other costs would
you include in such an itemized description?

ANSWERS

I wouldn't fall into that trap. the justification is that of Medicare,
the base code is for the device as described in the Medicare guidelines
and the other codes are add ons to provide an appropriate and functional
device. I would not go into the cost to do this at all. Good luck. gb

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Insurance companies generally have canned denials that they use now
and then just to keep us on our toes, to check the legitimacy of our
bills, (delay or avoid
payment's maybe?) whatever.

What you have to know is that it doesn't matter that it seems rediculous
to you. Send them what they are asking for, a letter of explanation of
why you can't, or some
combination of the two. Send a detailed RX and an explanation of what
you are providing, how it is made and explain the need for the device.
Send it ASAP so you will get
through the process and get paid this year. Well, maybe next year.

_____

     I just talked to my wife who does all our billing. She told me
that
insurance companies are not up to speed on the new codes. In fact we
attempted to bill Blue Cross of Rhode Island, with this code because we
were
delivering a RE-FLEX VSP with no cover.
     The claims person told my wife if she used this code it wouldn't
get
paid. So she used L5300 and down priced it. Thankfully they paid no
questions asked. Trying to live by the letter of the law can be
difficult
if not frustrating.
     A couple of points to relate to the insurance company:

      1. Our profits are all inclusive, generated from only two
sources,
the sales of the procedure (base codes) and componentry (add ons). We
do
not generate income from individual office calls, paperwork, or other
patient administrative fees like physicians or physical therapists.

       2. The fees we charge are usual and customary and can be
verified by
research.

     I hope this helps, one other thing, ask the insurance company if
you
can resubmit the claim with L5300. Faith (my wife) and I think that
this is
your best option.

_____

When I receive a request like this I try to get them to tell me how
much it
costs for them to provide the insurance to make sure that there is
inherent
reasonableness to their charges. I set up a dummy company that I
create
an invoice from for 90% of my charges to the insurance company.

_____

I would outline that this is a base code for the endo prosthesis, use
the
description in the Medicare/AOPA illustrated guide, include that code
was
5300 last year and Medicare has change to 5301 withadd a cover/ reduced
cost. Specify that the code is considered a normal and customary code
for
Medicare and most all insurance companies, their denial of the base
procedure is unusual to say the least.

_____

Refused to provide the informaiton, they'll eventually pay. I've taken
control of my reimbursement and my collections are outstanding. Do the
same.

_____

Hi John, I have run into this before. I invited them to come to the
clinic for several days to watch the fabrication process. The cost we
pay for raw materials is none of their business. If you can get someone
on the phone, begin with the cast process and give them a VERY datailed
description of the entire process. These insurance requests are from
people who think we slap together prats like assembling a bicycle. Once
I explain, or try to explain the process in detail, they have always
agreed that their request is not logical. In the many requests I had, I
have never given them the material info. We need to be patient in our
insistence that we are not DME retailers in spite of the billing scheme
we are controlled by. Any more questions, please let me know.

_____

I'm sure you have received a number of responses to your request
already.
Here is another - Medicare, BCBS, VA, and most insurance companies
accept
L-Codes and have allowable amounts as a matter of public record. You
need
not, nor ought you, have to justify further - unless of course your
charge
is significantly greater than posted allowables

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