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Thread Topic: OB On-Call Billing
Topic Originator: Margie
Post Date July 24, 2006 @ 12:19 PM
OB On-Call Billing

July 24, 2006 @ 12:19 PM Reply  |  Email Friend   |  |Print  |  Top

Can anyone tell me what the payors' responsibility is for processing and paying claims for services provided by the on-call OB/GYN for a delivery when they are not contracted with the patient's carrier, and how the claim should be billed.

Sun Health Clinics

Steve Verno
July 26, 2006 @ 8:08 AM Reply  |  Email Friend   |  |Print  |  Top

An insurance company pays pursuant to the contract they have with their member. The exceptions are Medicaid and Medicare HMOs.  Medicare HMOs are required to pay a non-par provider and the amount they are required to pay is the Medicare allowable including copays and deductibles. (HCFA Op Letter #38 and Medicare Reimbursement Manual).  Medicaid HMOs are required to pay the provider, the current Medicaid allowable.  This is based on State Law and the Social Security Act.  The rest of this response is for non-Medicare/Medicaid insurances.

You see, it is not your claim they are paying, it is their member's claim because all an insurance company does is pay a benefit that a member is entitled to receive.  Read your own health policy manual and you will see what I am saying.  When the insurance company pays the benefit, they issue an "Assignment of BENEFIT" document.  It's not a Payment of the Doctor's Claim document.  You can read 29 CFR 2560-503-1 for more info.  

When you are not contracted, you are sending the patient's claim as a courtesy to them.  When the insurance compay pays the benefit, they have no legal obligation to send your provider anything because their contractual obligation is to pay the cost of the benefit to their member.  The insurance company can, if the contract allows, send your provider the benefit payment, if the patient signed a document called "Assignment of Benefit".  See, we see the word Benefit again.  All an Assignment of Benefit form is, is a request form.  It asks the insurance company to defer payment to a designated person.  If the contract with their member does not allow the member to send the payment of their benefit to someone else, then the insurance company doesn't have to honor that request.  Some States have developed laws to order the insurance company to honor the AOB, but the insurance companies are citing ERISA, stating State law has no jurisdiction over the payment of the benefit, so they don't have to send payment to anyone other than the member.

Now, if the insurance company sends your provider the payment, or if they send payment to their member, you do not have to accept any adjustments the carrier applied to their member's claim.  You see, what they paid may be all they are required to pay. The patient is contractually responsible for any amounts above and beyond what the insurance company paid when seeking care from a non-participating provider.  Look at your own benefit manual and you will see this is true.  

If the insurance company sent the payment to their member, you must collect 100% of your billed charges.  If the patient does not pay, then send them a letter, politely informing them that they have 30 days to pay or you will inform the Internal Revenue Service that they received income from their insurance company and you will ask the IRS to audit their tax return to ensure they reported the income.  You also want to inform their insurance company to not send you a 1099-MISC form at the end of the year, but to send it to their member.

I have a form already designed at the Medical Association of Biller's website you can obtain for free:

I hope this helps.

Steve Verno
July 26, 2006 @ 8:46 AM Reply  |  Email Friend   |  |Print  |  Top

This forum doesn't allow you to edit your response.

To make a correction, the insurance company issues an Explanation of Benefit form.

July 26, 2006 @ 1:15 PM Reply  |  Email Friend   |  |Print  |  Top

Thank you - that helps somewhat,  But it also raises other questions in my mind.

The "contract" is between the patient and their insurance company.  And the Ins. Co. has an agreement with providers, making them "contracted" or "preferred" - these providers are then paid directly for services rendered per the agreement.

If the providers, both "designated" (because the OB services are packaged) and "on-call" are employees of a group practice, and the on-call is new and hasn't completed the credentialing/contracting process, but while on call delivers a baby on behalf of the "designated" provider, how might this play out?  Is this totally dependent on the agreement between the payor and the practice?  

Thank you...

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