When refund demands follow audits by third-party payers

In the April Update article, “Dental benefit contracting: It’s not all about the fees,” I explained in detail how dental benefit plan contracting can impact the way a dentist is accustomed to practicing dentistry.

In the May Update article, “Understanding audit authority of third-party payers,” I explained how a plan’s authority to audit charts and records is an often overlooked but very important component of contracting with a dental benefit plan.

In this article, we will discuss what happens when the plan’s findings from the audit result in a refund demand.

As I discussed in the May article, during its review of the audit data, the plan will look for possible fraudulent billing “patterns” — patterns being the key word. Let’s look at some of the most common patterns that a plan may look for and discover during an audit review.

Many plans today pay claims according to the treating dentist’s contract with the plan. A claim is a legal binding document that must accurately represent what is being claimed to the plan, and this includes accurate reporting by the dentist who provided the treatment in boxes 53-55 of the ADA 2012 claim form.

A plan’s utilization review may point to a potential billing issue if its system of records shows only the billing dentist contracted but there is a larger volume of claims from this dentist in comparison to his or her solo-practicing peers. While it could be that the office is just a very busy office, a plan may be concerned that noncontracted associates are working for the billing dentist, yet all claims are being billed as if the billing provider is doing all of the treatment. If this billing pattern is discovered during chart review, the plan may consider it fraudulent billing and a breach of the billing dentist’s contractual agreement. In result, the plan could demand a refund from the contracted billing dentist for the difference between the in-network fee and out-of-network fee that would have been paid had the noncontracted treating provider been accurately reported on the claim.  

If it’s not documented, it didn’t happen

Another pattern a plan will look for during the review is when no record can be found to prove that a claimed service was provided. This recalls the saying, “If it isn’t documented, it didn’t happen.” Here is an example: A three-surface filling was claimed but there is no proof in the patient’s record of written documentation and/or X-ray. While even the most meticulous dentist can on rare occasion get busy and forget to document a patient’s record, if the plan reviews 25 charts and out of the 25 reviewed the majority of charts were not documented, the plan may consider this fraudulent billing of services not provided.

During reviews, plans often look not only at chart records but scheduling records. They do this to see if an appropriate amount of time was set aside to provide the service that was billed. For example: Two quadrants of scaling and root planing were billed, but according to the schedule, the patient’s appointment was scheduled for only 30 minutes. Again, the plan is looking for a pattern; if it sees the above-described example repeatedly, it may question the legitimacy and quality of the service being billed and/or provided.

In the April Update article, I explained that in-network providers are obligated to follow the plan’s processing guidelines, which are typically found in the plan’s handbook. The restorative guidelines section of a plan’s handbook may read something like this: “A preventive resin restoration is considered a sealant for benefit purposes.” A plan that calls out such a restorative policy will focus during its review on claims billed as fillings for which the clinical evidence does not meet the plan’s policy guidelines. If this is the case, the plan may consider this reporting a more expensive procedure than was actually rendered. Again, this can result in a recoupment request.

So what do you do if a plan requests a refund from you? Whether you decide to pay the refund demand or appeal the demand, state law requires a response from the provider within 30 days of the date of the refund demand letter.

It is increasingly common for dental plan contracts to have offset language, which allows the plan to recover alleged overpayments from future claim payments, so simply opting to ignore a refund demand from a plan does not resolve the issue. Use of offsets to collect the amount of an owed refund is legal if the provider fails to reimburse the plan for an uncontested overpayment within 30 working days and the provider’s contract with the plan authorizes the plan to offset an uncontested overpayment from the provider’s future claims. 

How do you protect yourself from a recoupment demand? First, get your hands on the plan’s current handbook and read the Quality Management section to be sure that you are meeting the plan’s expectation for record keeping. Second, do a periodic self-chart audit to identify and correct issues and strengthen any weaknesses.

Contact CDA Practice Support at 800.232.7645 if you are dealing with an upcoming plan audit or if you need help with a plan recoupment demand.

This column by Cindy Hartwell, dental benefits analyst at CDA Practice Support, ran in the June issue of the CDA Update.

Related Items

An often overlooked but very important component of contracting with a dental benefit plan is the plan’s authority to audit charts or records. State regulators require dental benefit plans to have quality management, utilization and antifraud policies and procedures in place to protect the insured. Performing these post-pay chart audits or reviews is one way plans comply with this requirement. They conduct these reviews to ensure that dental procedures reported by a dental office on behalf of an enrollee are consistent within the provisions of the dental benefits.

Dental benefit contracting: It’s not all about the fees
What you need to know before you sign
I’ve heard from some dentists who signed on to a plan’s network only to discover afterward that the plan has certain policies and procedures that the dentist disagrees with. It appears, then, that the advice “buyer beware” also applies to one considering “buying” into a provider network. Many of the complaints CDA Practice Support hears from dentists are about plan payment policies that are often spelled out in the provider contract or handbook, so a thorough review of a plan’s provider contract prior to signing is strongly recommended.