Health Law Gumbo

Intro (00:01):
Welcome to Health Law Talk, presented by Chehardy Sherman Williams health law. Broken down through expert discussion, real client issues and real life experiences, breaking barriers to understanding complex healthcare issues is our job.

Conrad Meyer (00:21):
And good morning. Good afternoon. Whenever you’re listening to this podcast, welcome back to another episode here of Health Law Talk here at Chehardy Sherman Williams. I, myself, Conrad Meyer and joined in the studio today by my wonderful partners and I guess my colleagues, cohorts brothers in arms, healthcare lawyers, corporate attorney, Rory Bellina, George Mueller, all of us here guys. How you doing?

Rory Bellina (00:47):
Doing well. Good afternoon. Good afternoon.

Conrad Meyer (00:50):
So today as we sit here on a Thursday afternoon, it’s this Thursday here in Meadow, Louisiana overlooking the beautiful Lake Pontchartrain. We decided to come on the show to talk about, I guess, sort of a gumbo, that’s what I called it, if you will, some of the current kind of healthcare issues that we are facing for our clients. And we thought it would be asked to come over and just have a discussion, a round table discussion about some of the issues we’re all facing that might be beneficial to listeners who might want to learn more about maybe some current hot topics that are going on. We agree?

Rory Bellina (01:24):
Yep, guys. Sounds great. Okay.

Conrad Meyer (01:26):
So I guess I chose the short straw and I was told to go first. I dunno why, but I guess I’ll go first. So guys, one of the things that we were mentioning before the show started was I have a hospital client who’s out of network with commercial payers who has historically been fighting commercial payers for basically what’s called the usual customary rate when they do procedures out of network. And of course that’s a very subjective determination that commercial payers use to reimburse facilities who are not under a contractual fee schedule. Interestingly, the way it has been a battle for decades, I mean this is not something that just popped up overnight because commercial payers want in-network facilities. However, a lot of times facilities don’t want to agree to go in network because the fee schedule is just so low. And so they just stay out of network. And so in this particular case, the client here has told me that what is going on is the commercial payers are telling their members that, Hey, member, if you do not, if the hospital, the Outof network hospital that you go to does not collect your required deductible for that service, that then the commercial payer will refuse to pay any benefit to the member, which

Rory Bellina (02:45):
Really on behalf of the member. On

Conrad Meyer (02:46):
Behalf of the

Rory Bellina (02:47):
Member.

Conrad Meyer (02:48):
So interestingly, so it puts the member directly in the middle of this battle.

Rory Bellina (02:54):
So the member essentially is getting a balanced bill.

Conrad Meyer (02:57):
Absolutely. Because they’re out of network. So technically on an out-of-network hospital, a facility or a provider can balance bill the member.

Rory Bellina (03:05):
Correct.

Conrad Meyer (03:05):
A hundred percent.

Rory Bellina (03:06):
So in this case, your client is the out-of-network hospital and for one reason or another, since they’re out of network, they’re not, well, they don’t have the systems in place to really, do they even have the systems in place to look up what the member’s deductible would be?

Conrad Meyer (03:23):
That’s a good question.

Rory Bellina (03:24):
I mean, do they

George Mueller (03:25):
Typically, sometimes

Rory Bellina (03:26):
They have to phone

George Mueller (03:27):
In or they

Conrad Meyer (03:28):
Make

Rory Bellina (03:28):
Contact. Yeah,

Conrad Meyer (03:29):
So they do a pre-auth, right? They do a pre-auth, right. And they try to get a pre-auth for the service. And that point in time, the pre-auth, which we just did a show correct on

Rory Bellina (03:39):
The new law, I mean verification of benefits, pre-auth, et

George Mueller (03:42):
Cetera, whatever they have to do to make sure that they’re in the system, get paid or whatever.

Conrad Meyer (03:47):
Absolutely.

Rory Bellina (03:47):
They’re

George Mueller (03:47):
Typically going to say, well, yeah, they sell the deductible of X. So you can collect that

Rory Bellina (03:52):
Copay, two different things. But yeah, I think that’s the time. And so why would a hospital or provider not collect that deductible?

Conrad Meyer (04:03):
Well, I think, well sometimes it’s used as sort of a marketing ploy to curry favor with patients

Rory Bellina (04:10):
To we’ll bill you later. Well,

Conrad Meyer (04:13):
We will collect it either. Sometimes they don’t do it at all, right? You have the ability to waive the deductible, but if you’re doing it consistently, which is I think what the claim is with the payers, these hospitals aren’t collecting the deductible at all.

Rory Bellina (04:26):
And that’s not an issue of an inducement because this is not, they’re out of network and they’re not billing it.

George Mueller (04:32):
I was just

Rory Bellina (04:32):
Going to ask

George Mueller (04:33):
About the I word if that’s an inducement, but I mean if they’re not in network, then

Rory Bellina (04:37):
What’s an inducement?

Conrad Meyer (04:37):
Correct. And that’s the point. And so the point is, and I agree with both of you wholeheartedly, that it’s not an inducement because they’re out of network, there’s no contract. And so they do, if they waive the deductible or they say, okay, patient will collect your deductible on whatever terms we can agree on, maybe it’s a 12 month loan or whatever it might be. But then the commercial payer is saying if the hospital does not do that, then they are now and they’re putting this, I don’t know if they’re putting it in a summary plan benefit in some A P B S within the plan documents, or are they sending this a separate cover letter to the members and saying, Hey, if you don’t pay the deductible, the hospital does not collect this deductible. We refuse to pay any benefit.

Rory Bellina (05:21):
And from the insurance perspective, they consider this. The reason I’m speculating, the reason that they are not paying this is because they believe that by your hospital client not collecting the deductible, possibly the patient could possibly being induced to having a procedure that might not be necessary. They don’t have any skin in the game.

Conrad Meyer (05:45):
Well, not as Right? Well, not necessary, but also out of network fee schedules. So in other words, they know if it’s an out-of-network fee schedule, that hospital’s going to come back and ask for a U C R payment that it’s going to be much higher than the normal fee schedule would be for an in-network facility. Right. Then if

George Mueller (06:04):
You’re looking at the total quantum due for the

Conrad Meyer (06:06):
Services,

George Mueller (06:07):
Then you want the member to bear its fair share if they have an unsatisfied amount

Rory Bellina (06:15):
And if the member’s not paying anything, there’s a risk that the member is getting a service that they might not get if they

Conrad Meyer (06:23):
Didn’t maybe not get, but also that service is now going to be charged at a much higher rate than an in-network facility. They’re going to

George Mueller (06:28):
Make it up.

Conrad Meyer (06:29):
That’s right.

Rory Bellina (06:30):
Okay.

Conrad Meyer (06:30):
That’s right. So suddenly you’ve got claims that are being sort of funneled due to this alleged inducement to out-of-network facilities who then bill the pays for the U C R rate, which of course exacerbates because there’s always going to be a difference of what Uber believes what

George Mueller (06:46):
That, and a payer figures into their total burden, right? With the premiums they’re going to collect plus full utilization of deductibles prior to say paying so that

Conrad Meyer (06:58):
Which might be a disincentive for services. So they might want to,

George Mueller (07:01):
And if you did that across the plan,

Conrad Meyer (07:02):
Imagine

George Mueller (07:03):
The financial effect.

Rory Bellina (07:04):
So what happens when the hospital doesn’t get paid anything and the insurance company says,

George Mueller (07:11):
Go

Rory Bellina (07:11):
Collect the full amount from the patient, then the hospital has to make a decision. Are they going to bill and proceed against the patient?

Conrad Meyer (07:18):
So that’s my point.

Rory Bellina (07:19):
After the services already provided, it

Conrad Meyer (07:21):
Puts the member right back in the middle of those cross hairs. And so now you’ve got a person who paid a premium, which is going to be the challenge. They paid a premium for a coverage model. So imagine if it was a p o s or p p O plan that had an out of network benefit,

(07:34):
And suddenly what you paid for, you’re being told we’re not going to satisfy that because your deductible wasn’t paid at the time of service. And interestingly enough, the question becomes in my mind, in my whatever brain I got here, is that is the deductible equivalent to the U C R rate of the procedure being performed. That’s what they’re saying. They’re saying, well, wait a minute, if I don’t have to pay anything, then you’re saying that whatever deductible should have been paid by the patient should have just canceled it out bull. No, absolutely not. So now you’ve got a commercial payer who’s basically saying, well, we’re not going to pay anything. No benefit. You’ve got a hospital now who’s going to have to go out to the patient because of their out-of-network and balance bill the patient. But then suddenly you have a patient who says, well wait a minute. The premium I’ve been paying is worthless. I really don’t have a P O SS plan. I don’t have a P P O plan.

Rory Bellina (08:25):
So you have everyone pointing fingers at each other.

Conrad Meyer (08:28):
Correct? Yes. That’s the conundrum that I’m facing right now.

George Mueller (08:31):
It’s the Spider-Man meme, the

Rory Bellina (08:32):
Spider-man meme of a triangle of three people all pointing air guns at each other. I

Conrad Meyer (08:38):
Wish our listeners could see what y’all just did. That was great.

Rory Bellina (08:41):
You

George Mueller (08:41):
Would think that maybe the payer should at least step in and pay the amount net of what the deductible would’ve been had it been applied or collected and or conditional paying that on them, collecting that deductible that way there’s kind of a sense of, I guess, equity fair play or putting them in the position that they should have been or supposed to be. And then forcing that compliance, right? I mean,

Conrad Meyer (09:06):
So some quantum marrow would argument on behalf of the facility, correct. Back out the deductible

George Mueller (09:13):
And or say, yeah, we’ll do it, but you still got to go collect it conditional versus just saying you didn’t comply, so you get nothing, zero go home. Because then you get the issue of, okay, what am I paying an insurance premium?

Conrad Meyer (09:24):
Correct. And that’s the issue. So in other words, back out the U C R payment minus deductible and get that, that’ll be it. And so you go get the deductible,

George Mueller (09:31):
I guess the heavy handed remedy is because naturally, I mean the payer wants to induce incentivize or force compliance

Conrad Meyer (09:39):
To stay in network

George Mueller (09:41):
Or at least comply and get the deductible.

Conrad Meyer (09:42):
So who is practicing medicine here? Just curious guys whose, because we have a corporate practice issue. No prohibition in Louisiana, but would you say that, and I’m not bad, I mean I’m not naming insurance companies, I’m want to say that, but does this have an eerie feeling of a corporate practice issue?

George Mueller (10:07):
Well, I’m curious, what does your client at the hospital do in that case? Do they try to go for the patient or do they try to fight the insurance company?

Conrad Meyer (10:15):
I think that’s sort of what we’re grappling with, right? Because what kind of marketing would it be for any facility to say, Hey, even though we’re out of network, we’re going to come after you patient for all of it. I mean, how many patients would want to come to that hospital? It

George Mueller (10:28):
Almost seems like it forces the insured to the patient to go after its own insurer. That’s right. And it’s trying to force, I think the facilities to get in network. Oh, if you get in network, you won’t have this problem. You’re going to get a

Conrad Meyer (10:41):
Well, if they allow ’em in network, because remember sometimes they’ll just say, well wait a minute, our network, remember it’s closed. We have a closed network.

George Mueller (10:48):
I would think that, I know personally have encountered situations where they’ll tell you what your deductible is. It’s like in their confirmation of benefits, verification of benefits and setting it up and making sure doing everything they need to do, even maybe not even a pre-auth, but just whatever you’ve typically do. When they do that, they’ll come back and say, by the way, here’s your balance of we also have to collect this so we can get paid. And so you would think, I mean it’s easier to do that and everyone’s happy except the patient has to pay it. But,

Conrad Meyer (11:18):
Well, let me ask you this. What about solving the issue on the front end?

(11:22):
In other words,

(11:22):
Hospital, there’s no or delineation of how a hospital should collect the deductible. So can a hospital create terms for each patient that it sees beneficial for each? In other words, okay, we’ll collect it, pay me a hundred dollars now we’ll finance the deductible for you patient over a 12 month period, 20, whatever it might be, right? And then what if those patients just never got collected? I mean, you could then argue that you did try and make an attempt. What do y’all of that?

George Mueller (11:56):
So key to that is what does the payer

Rory Bellina (12:00):
Deem

George Mueller (12:00):
To be? You’ve collected the deductible. Have

Rory Bellina (12:02):
You issued a note

George Mueller (12:03):
That you think is never going to get paid or have you

Rory Bellina (12:06):
Collected

George Mueller (12:06):
It in folding paper green

Rory Bellina (12:08):
Prior

George Mueller (12:08):
To getting put in for surgery? I

Conrad Meyer (12:10):
Mean, I’m sure the payer’s going to say, we want, you can’t have monopoly

Rory Bellina (12:13):
Money here. Did they

George Mueller (12:13):
Establish that in

Conrad Meyer (12:15):
There’s no, no. And who’s to say what that is?

George Mueller (12:18):
So not to

Rory Bellina (12:19):
Be

George Mueller (12:19):
Goofy English teacher here bar. So

Rory Bellina (12:21):
Collected,

George Mueller (12:22):
Past tense have collect. So it has to be collected. So is a note collected, I mean,

Conrad Meyer (12:26):
Well, to pay, I think there has to be an attempt to collect it. So

Rory Bellina (12:29):
Is there a trend where

George Mueller (12:30):
Some people are kind

Rory Bellina (12:31):
Of

George Mueller (12:32):
Giving a note for the collection of the deductible or is this where you have to show?

Conrad Meyer (12:39):
I think that’s where most collections go. I mean, I think when you’re out of network and you don’t cover your deductible upfront, they’ll sort of float the note until it goes after collections.

Rory Bellina (12:49):
And we see this also in the space where people are in network and a lot of times in the pharmacy world where a patient will go and they say, I can’t afford my copay or my deductible, but I need this medicine. And the pharmacy will give it to them and work on payment plans and sometimes they don’t pay and the pharmacy has to make the choices at a hardship. Are we going to write this off after a certain amount of time is trying to bill, but they’ve billed the insurance, they’ve filled the prescription given the prescription to the patient. So I think that comes up right now. And that’s an in-network example.

Conrad Meyer (13:25):
It’s a conundrum that I think is, I mean it’s interesting for sure, but one that I don’t think is going away. And I think that out-of-network facilit is going to have to grapple with,

Rory Bellina (13:36):
Well, alright, here’s another out-of-network insurance issue that we’re facing. Is

Conrad Meyer (13:41):
It is a Rory problem?

Rory Bellina (13:43):
Yes. So out-of-network provider submits a claim to someone’s out-of-network insurance and insurance instead sends the check to the patient and says, patient,

George Mueller (13:59):
Here’s

Rory Bellina (13:59):
Your check for services. But it’s literally sent to the patient at the patient’s house and a patient gets a check and they

Conrad Meyer (14:07):
Suspend it, right

Rory Bellina (14:09):
Is gone. It’s the same

George Mueller (14:10):
Thing you do with the additional increased cost of compliance with the road home and the mitigation, everything

Rory Bellina (14:16):
It gets spent, it gets put

George Mueller (14:18):
On red, it gets brought to, and

Conrad Meyer (14:20):
That’s by

George Mueller (14:21):
And everything

Conrad Meyer (14:23):
The statute. Now if you look some of the pay laws and things like that, that issue that you mentioned, Rory is a loop, not I would call a loophole, but it’s only attributable to physicians but not hospitals. So in other words, if you have even out of network provider from a hospital, you still have to send the payment to the hospital. But physicians who are out of network, you’re correct that it goes straight to the patients. And the time a patient gets a $50,000 check and Dr. John Doe goes to that patient and says, Hey, by the way, you got my $50,000 check. Can I have it? And the patient says, Ooh, I thought I hit the lottery. What do you do then? I don’t know. Good luck

George Mueller (15:07):
Collection attorney. Attorney. And then you end up chasing, but now you’re

Rory Bellina (15:11):
Essentially suing your patients for, you’re

Conrad Meyer (15:13):
Suing patients and if they’ve got the money, which they probably don’t, I mean then you’re squeezing blood from a turnip and possibly bankrupting and God knows what else to a patient. Because

George Mueller (15:22):
If there are multiple perils involved,

Conrad Meyer (15:24):
At least of

George Mueller (15:24):
Which could be, do they then turn into a malinger and or find a malpractice issue?

Rory Bellina (15:30):
And why the insurance,

George Mueller (15:32):
Does the insurance company do this just to mess with the provider for not being in network? I would suspect it is, I don’t want to say it’s a consistent and organized punitive measure, but it may be that they don’t have a contract with the provider and so they feel they have to pay the only person with whom they do have a contract,

Conrad Meyer (15:50):
The member.

George Mueller (15:50):
But the result is what everyone’s, we can’t see, the audience can’t see the grins on our faces, but obviously it is a punitive or negative impact or effect. It punishes

Rory Bellina (16:00):
The physician for not

George Mueller (16:01):
Being in network. What came to mind immediately was that I think body shops get a better deal in the state than the physicians. I mean the body shops get the check and it’s made to them all the time. Or they hold your car, get the car, right,

Conrad Meyer (16:13):
Right. Yeah, the collateral,

George Mueller (16:16):
Any personal services scenario, medical services,

Conrad Meyer (16:18):
Physician

George Mueller (16:19):
Services, the services are already rendered. So you’re collecting on an open account from someone that already has the money and then you’re either battling their other secure creditors and or whatever. Plus Conrad said, you’re going after somebody who may not be able to afford it. And granted the moral issue there of course is that well, they had the money they could have afforded had they not gone and spent it on something else other than what it was intended to be without the physician providing the services, they don’t have that money in the first place.

Conrad Meyer (16:48):
That’s right. That’s a

George Mueller (16:49):
Critical leg on that stool. But yeah, that’s a tough one, I guess until physicians band together and get a better lobbyist to change that rule.

Conrad Meyer (16:57):
I tried that. Lemme try you. I tried that about

Rory Bellina (16:59):
Maybe 15 years ago.

Conrad Meyer (17:02):
Went all the way up to Baton Rouge, sat down with D o I told ’em about exactly this issue and to literally put something into law that didn’t have that banned or prohibited boxes for payers to use as their notice requirements. Everything gets lost in the PO box. You can’t literally send certified mail to a PO box. So the prompt pay laws and all the other triggering notice provisions can’t run on a PO box yet. Amazingly, commercial payers notification, all their is always a PO box. PO

Rory Bellina (17:35):
Box,

Conrad Meyer (17:36):
Right? And I’m basically, I said exactly the same thing, Rory like wait a minute, why can’t hospitals have the favor of getting checks directly even out of network, but then physicians can’t? And I was basically told in no uncertain terms, good luck. Right? Good luck getting that passed is common sensical from a provider standpoint, but

Rory Bellina (17:55):
So then who’s fighting that? Because I doubt it’s not the public that’s doing that. So you’re saying it’s the insurance companies that have that

Conrad Meyer (18:04):
It’s provider

Rory Bellina (18:04):
Locked up from a kind of, I guess a position issue or a position standpoint from a prevailing something that helps them help keep their networks intact or to incentivize network membership?

Conrad Meyer (18:20):
Well, it presents problems from physicians who want to do out of network work on patients because now they’re faced with sort of a double whammy of, Hey, am I going to get paid? And how do I ensure that my patients who are going to receive the check it gets to me without them going to cash it?

Rory Bellina (18:44):
And what ability is there to make assignment of benefits that’s effective legally? I mean if the check’s made out to them and they go, you can’t stop that. Right.

Conrad Meyer (18:54):
Well, that’s even true. You get a good point, George. That’s true. Assignment of benefits. Even if the patients assign benefits in some sort of an assignment of benefits form for a physician on an out of network, the payers will not honor

Rory Bellina (19:08):
That. They don’t honor, don’t honor the point. They read it as not written. We’ve had that come through this firm where we sent the insurance company, here’s the assignment of benefits that the patient signed in the hospital pre-procedure saying send all payment for services rendered to X provider. Nope, she didn’t see it.

Conrad Meyer (19:26):
That’s a negative ghost rider.

Rory Bellina (19:28):
It’s

Conrad Meyer (19:28):
Not going to

Rory Bellina (19:28):
Happen. A payer just closes their eyes when that comes across their desk and they just still send the check to patient’s house and patients spends it how they want.

Conrad Meyer (19:37):
They use it for kindling and fire. They would put Kleenex. They don’t care.

Rory Bellina (19:41):
Oh man.

Conrad Meyer (19:41):
That’s the truth. I mean well, I’m just saying,

Rory Bellina (19:44):
Oh, the letter, absolutely

Conrad Meyer (19:45):
The letter, the assignment is absolutely ignored. It is. If it never happened and now you’re faced as a provider to say,

Rory Bellina (19:53):
What am I going to

Conrad Meyer (19:54):
Do? You’re playing Chase. Chase with what? I mean we all agree. The

Rory Bellina (19:59):
Hope of payment,

Conrad Meyer (20:00):
Good luck.

Rory Bellina (20:01):
Absolutely.

Conrad Meyer (20:03):
And then when they have to hire lawyers, right? Then they even get more frustrated because they say, wait a minute, at least I’m paying you. I haven’t even gotten paid for this and it’s been X amount of months, years or whatever.

Rory Bellina (20:15):
Something that I’ve been that’s come up recently for a couple of different clients that I know and I’ve talked with you about. And George, I’d love to get your opinion are the medical legal cases and how practices handle those. Because a lot of times they’ll get patients that come in and we’ll say, I was in a car accident. I’m represented by attorney X, this is going to be a legal case. Yes, I have insurance, but we’re not going to bill my insurance, essentially send the bill to my attorney. And the practice makes the decision if they want to treat that patient or not and get paid at the end on essentially a cash basis. Right?

(20:53):
But then Conrad and I have talked with you about this. An issue arises where same fact situation, but let’s say the case that looks really good, which is a bad way to describe it, but the case that looks really good for the attorney where he thought his client and the patient here was going to have a big recovery, doesn’t look so good of a case now, but the patient still needs treatment, still needs surgery, has all these outstanding medicals, and the patient or the attorney directs the patient to say, you know what? This isn’t working anymore. My attorney’s not going to keep paying for my treatment. Now I want you to run my insurance. And that recently has come up and it comes up sometimes I think on the front end and on the backend. And it causes a real issue for the practice, not only from an accounting standpoint, but from how they’re going to handle it. Because the rule is that if the patient wants their insurance and you, or let’s say you’re in network with them, or even if you’re not in network and they say, bill your insurance, you have a choice of are you going to discharge the patient or you’re going to treat them and bill their insurance, but then is the insurance going to pay you because the insurance is going to find out it was an accident case. They’ve got a

George Mueller (22:09):
Significant delay in notice. So they didn’t have the ability to steer or curate or otherwise manage from an administrative standpoint the course of care. And then you’ve got the subrogation issue because naturally first thing, whether it’s Medicare or Medicaid or whether it’s a payer, they’re going to subrogate, right? I mean, they get the ability to kind of come back and

Rory Bellina (22:32):
Participate

George Mueller (22:33):
In that claim to the extent it exists to get reimbursed for all the stuff they’re paying for because it wasn’t their fault.

Rory Bellina (22:42):
So

George Mueller (22:42):
Yeah, I think you’ve got a couple. I wonder about the delay, like the delay in claim. I’ve been treating for a year, but now I want it here. And I think

Rory Bellina (22:50):
Prompt

George Mueller (22:51):
Engagement of you have notification like any other insurance, right? And healthcare, it’s a little bit different, but I think still they have an initial, I wonder how do you get over the fact that you’re really late to the game and making your initial claim?

Rory Bellina (23:04):
Oh, you mean if the patient switches mid treatment saying I’m going from a cash pay to now use my insurance. I don’t know how the insurance company, I mean, I don’t know.

Conrad Meyer (23:15):
I think when you’re talking

George Mueller (23:17):
About is it as far as cost going forward or is it from day one?

Conrad Meyer (23:20):
No, I think cost going forward, right? It’s got to be cost going forward. That’s expenditures that are being done now that are relation to a tort fees. But it

George Mueller (23:30):
All is.

Conrad Meyer (23:31):
Technically it is, but it was never paid by the insurance company says. So no subrogation as to those payments that were never made.

George Mueller (23:38):
But do they get to claim ’em? Do they get to claim ’em from T zero? If so, what he described is the case looks like a big hit and then suddenly it’s like, oh wow, maybe we have some comparative fault. Even I

Rory Bellina (23:50):
Don’t, Sam’s

George Mueller (23:51):
Not a comparative default statement. We have some culpability or something. You can’t do that,

Conrad Meyer (23:54):
Right? I can’t you do that.

Rory Bellina (23:55):
I’m asking because I

Conrad Meyer (23:56):
Don’t It’s an overreach. How can you claim a subro subrogation, right, for payments that you didn’t make?

Rory Bellina (24:03):
No, no, no, no. What I’m saying is what if the

George Mueller (24:06):
Patient

Rory Bellina (24:07):
Says, I’ve got all these

George Mueller (24:08):
Costs, and they go back to T zero and present it to the insurance.

Rory Bellina (24:13):
Yeah. The patient says, you’ve been treating me for six months

Conrad Meyer (24:16):
And

Rory Bellina (24:17):
You’ve just been kind of holding my bill per se until the case settles and they say, my attorney says this case isn’t worth anything anymore. Now I want you to go back and bill everything through insurance.

Conrad Meyer (24:28):
Well, I think can, I think there’s a cutoff for that. I think there’s a time limit temporal.

Rory Bellina (24:33):
Well, let’s presume, let’s presume, just for argument’s sake, let’s presume that this is all within the one year from date of medical service. So what do you do as the practice this whole time along? You’ve been treating

Conrad Meyer (24:44):
This, you submit the claims,

Rory Bellina (24:49):
You’ve

Conrad Meyer (24:49):
Been holding them. If you’re in network, well, that’s the problem. So my problem is that the facts set the in network. So if I think if you’re, what

Rory Bellina (24:56):
If you’re out of network,

Conrad Meyer (24:57):
That’s different.

Rory Bellina (24:58):
You’re out of network.

Conrad Meyer (24:59):
What do you do that’s different? You submit the claims

Rory Bellina (25:01):
As out of network and you’re just, but okay, but now I’m the practice and I submit all these claims that I thought were going to be cash. Now they’re out of network and I’ve been treating this patient for six months, however long I’m going to get paid substantially less than I thought I was.

Conrad Meyer (25:18):
Or if

Rory Bellina (25:18):
You

George Mueller (25:18):
Don’t submit your claims timely relative to the date the service was presented,

Rory Bellina (25:22):
You don’t get paid. What if I did a surgery?

Conrad Meyer (25:24):
So if I’m out of network, if I got a question on network, I tell ’em, don’t submit the claims out of network. And I say, you hold those claims and then you as the provider, file an intervention in that lawsuit. Like

George Mueller (25:38):
A lien in

Rory Bellina (25:39):
The lawsuit. Absolutely.

Conrad Meyer (25:40):
You get a lien for your bill sergeants.

Rory Bellina (25:43):
All right. But the patient tells you, I want you to bill my insurance.

Conrad Meyer (25:46):
No, you’re out of network. I don’t have to listen to you. I can bill whoever I want.

Rory Bellina (25:51):
Okay.

Conrad Meyer (25:51):
Now if you’re in network, that’s different. If you’re in

Rory Bellina (25:53):
Network, network is different.

Conrad Meyer (25:54):
Network is different. But if you’re not a network provider, I would say absolutely not. You don’t patient sweet Sue, you don’t tell me who to bill. I’ll bill, I’ll bill you. And then what you do is you tally your expenditures, right? Your bill charges, whatever, and then you file a medical lien because there’s a medical lien statute statute. And you filed a medical lien in the litigation.

Rory Bellina (26:15):
And luckily this practice had, we had set them up on the front end for this, they had essentially a contract with the patient saying that you understand this is a legal cash case. We’re not billing your insurance. Your attorney’s responsible. If your attorney doesn’t pay, you’re responsible. And we had an agreement with the patient, but it seems to have come up a little bit more frequently than I’ve seen it in the past where patients are switching from this cash to saying, I want to do insurance now midway through treatment.

Conrad Meyer (26:48):
Well, I mean this is a question. Your question is something I’ve dealt with clients and when you’re in network, no question. You got a client comes in, Hey, I’m in litigation case, but I’m also a Blue Cross member or an

Rory Bellina (27:07):
Aetna,

Conrad Meyer (27:08):
Whatever commercial payer you are, and you have a in-network contract with that payer, you don’t have a choice. You’ve got to do the in-network. Even if they call in a label at litigation. I mean, I think you run afoul of your in-network agreement.

Rory Bellina (27:21):
I agree. I agree

Conrad Meyer (27:22):
With that. So if they’re out of network, to me it’s like the wild, wild west for the providers. You can do whatever you want. You can balance bill, you could file the lien, you could do whatever you want,

Rory Bellina (27:31):
Discharge the patient. If

Conrad Meyer (27:33):
You discharge, I’m firing you and you follow the board’s guidelines for terminating patient relationship. Yeah. Yeah.

Rory Bellina (27:39):
Okay. Alright. What if you have a patient come to you that is an injury case, but they have insurance and they tell you, yeah, it was an injury case, but I want you to use my insurance. What do you tell ’em? The practice of the provider then?

Conrad Meyer (27:56):
On an out-of-network or in-network?

Rory Bellina (27:58):
In-network

Conrad Meyer (27:58):
In, well, you don’t have a choice in-network.

Rory Bellina (28:02):
Correct.

Conrad Meyer (28:02):
So there’s a choice,

Rory Bellina (28:04):
But that provider is incentivized financially to convince that patient to not do their insurance,

Conrad Meyer (28:13):
But they also have a in-network agreement that requires them to do that. So they’d be in violation of that in-network agreement if they didn’t,

Rory Bellina (28:20):
Unless they can convince the patient to not run it through their insurance.

Conrad Meyer (28:24):
Did you want to run that risk or

Rory Bellina (28:26):
As

Conrad Meyer (28:26):
A provider, do you want to run

Rory Bellina (28:27):
The risk of the patient? No. No. But I have seen some clinics and providers that will say essentially, I can get you in a lot faster if this is not run through your insurance. Well, that’s

Conrad Meyer (28:39):
A UR issue, but I’m not telling my clients you want to play that game of chess. I don’t.

Rory Bellina (28:46):
I would not either.

Conrad Meyer (28:47):
That’s like a Russian roulette.

Rory Bellina (28:49):
Then

Conrad Meyer (28:49):
You’re going to get kicked out.

Rory Bellina (28:50):
Then going to that patient is going to call Blue Cross and say, Hey, guess what Dr. Conrad’s doing? And they’re going to,

Conrad Meyer (28:56):
They’re going to do an audit, which they’re required to do and everybody knows this. They’re going to pull the records, right guys? And then guess what? You’re going to be suddenly going to get that call. Guess what? You’re out of the network and you’re done terminated, you’re out. I don’t want to do that. And good luck with that.

Rory Bellina (29:09):
Yeah.

Conrad Meyer (29:09):
Not worth the risk.

Rory Bellina (29:10):
I thought I would just keep on the insurance,

Conrad Meyer (29:12):
Insurance side

Rory Bellina (29:13):
Train that we’ve been discussing. We

Conrad Meyer (29:15):
Have a lot of trains going on, man. That’s your train. I got my Mueller. What kind of train? I mean, don’t tell me. I know you have stuff in that caboose. I know you got it.

Rory Bellina (29:25):
I don’t have any,

Conrad Meyer (29:26):
You don’t have good juicy,

Rory Bellina (29:29):
I don’t have any insurance specific things

Conrad Meyer (29:33):
Going on like that. I

Rory Bellina (29:35):
Can’t say that I do.

Conrad Meyer (29:36):
You can’t speak to the insurance side. No, not much. No, that’s all right.

Rory Bellina (29:39):
We had something come up you and I a little while ago, George, and it was a deal that we had come late to, and there were some questions about the infamous healthcare laws section in the deal and how to approach that. I thought that was interesting. If you want to talk about that.

George Mueller (29:54):
I refreshed my memory so I can go through my Rolodex aged last century reference Rolodex of deals.

Rory Bellina (30:02):
So this was a deal that I think we can, we weren’t a part of the deal, but we were brought in to look at it after everything. And there were some possible indemnification claims being made, and we got to look at the actual deal documents and saw that there was a very huge onerous one-sided compliance with healthcare laws section.

George Mueller (30:23):
Oh boy. Yes. I do remember that. Yeah. That was remarkable. Again, hearkening back to our prior discussions of when we’ve really, you encounter a big practice rollup from Private Equity Inc.

Rory Bellina (30:41):
Yep.

George Mueller (30:41):
Comes in with big money center city law firm with an anhill of associates. And the typical technique is about two or three weeks before you really get to a closing date,

Rory Bellina (30:52):
The healthcare attorneys get involved.

George Mueller (30:55):
It’s not just a healthcare attorney. We don’t do all healthcare attorneys and justice by referring to ’em this way, but it’s usually the healthcare regulatory policy wonk usually with poor social skills

Rory Bellina (31:10):
Company, not included, doesn’t exclude ourselves.

George Mueller (31:12):
Present company not included. That was implied. But for those of you who feel insecure, I’m happy you’re able to self-identify and confirm. So no, no. So they get brought in and all of a sudden with tripwire sensitivity, every potential regulatory issue of to be referral pattern,

Rory Bellina (31:32):
The minefield has been laid

George Mueller (31:34):
Or whatever thing is, this is a self-report and pay and then nail ourselves to a cross and everything else, but it doesn’t get levered in until two or three weeks before the deal. And then by then the thing’s half cooked, everyone’s

Rory Bellina (31:52):
You’re exhausted,

George Mueller (31:52):
Committed, and you’ve got deal fatigue. And it’s done like that on purpose to just, I think hose the seller and or put in some more money in the escrow and then to satisfy, if you don’t do this, we have all, and then it’s all of the anti kickback or stark rate or whatever other regulations being implicated has to be dealt with in a manner that is like zero risk. Even though you see the practical reality of it is this is a non-issue. Right. And then if you were to, everyone does have phone a friend and they’re going to call someone in said regulatory department like, oh yeah, we’ll never see it. You can do it and we’ll look at it in 18 months and cash a check and tell you a good day. That’s it. And you’re like, why are we doing this? And it’s because the policy wonk, the poor social skills comes in, gives no deal materiality to it. It’s just a yes or no. It’s an on or off switch. Yeah. So in a case where you have, I guess we had, and for lack of a better term, I want to say it was, I guess sales, like medical equipment, was it sales or something like that?

Rory Bellina (32:57):
I

George Mueller (32:57):
Think without any attribution. And then I guess the manner in which some of the sales were being made or to whom they were being made had some offending component or characteristic to it. And then on their own, they make their own little analysis of it.

Rory Bellina (33:12):
They make

George Mueller (33:13):
Their own determination and then their own remittance,

Rory Bellina (33:16):
Right towards the end of that holdback period about to be

George Mueller (33:19):
Over. So if it’s going to be 12 months or 18 months, magically this all comes up and they’ve got to make a big remittance and magically it’s all coming out of the purchase price. And of course, as to the firm doing it, they get to keep their anthill of associates busy. And then as to the entity, they just get to say, oh, we got to do this. And we’re just saying it. So I guess to your point, negotiating exactly when that gets brought up in your deal overall is really important. I usually, I now make, we make kind of an announcement at the front end. We say, look, if you’re going to bring up regulatory issues, you need to slate them before a particular date. You don’t get to edge a me and measure ’em to the last part of the deal and then blow it all up and say, oh, the escrow’s got to do this and we’re sending a bunch of stuff and you guys stink. And we think the purchase price has got to come down now and all get it out. And it’s like, speak down forever, hold your piece. Because there’s no lack of disclosure. It’s just gamesmanship and strategy with how it’s raised, when it’s raised, and what the remedy is as it impacts the deal. So that’s a,

Rory Bellina (34:20):
And Conrad, you would like how the Buyer’s Council did this, they said, we think we need to make a remittance for a potential overpayment. We’re not going to tell you exactly what it was or how much it was, but we’re going to just do it and you’re on the hook for it, but you can’t be involved in it at all

George Mueller (34:40):
Essentially. And we’re not going to send you the full load of documents that pertain to it, although most of ’em are your business records.

Rory Bellina (34:46):
Now,

George Mueller (34:46):
We’re not going to send you any of our analysis. We’re just going to send you a generic sort of a listing of billings in the relevant period, not identified or attributed to said characteristic

(34:57):
That

Rory Bellina (34:57):
Is markable and we’re taking the money in escrow. That’s

George Mueller (35:00):
Remarkable.

Rory Bellina (35:00):
We’re

George Mueller (35:00):
Just going to hold the escrow and send it.

(35:02):
And they did a self-disclosure

Rory Bellina (35:04):
Self. Well, they said they were going to do a, but again, we

George Mueller (35:07):
Never got proof that they actually sent it or what they were doing with it.

Rory Bellina (35:10):
So they said, we’re going to do a self-disclosure. We can’t tell you how much and for what because all that’s confidential work product, but you’re on the hook for the amount, whatever we determined, you

George Mueller (35:19):
Know what that

Rory Bellina (35:20):
Sounds like to me.

George Mueller (35:21):
They wanted to get an A non-disclosure, but the non-disclosure just wasn’t like keep it quiet. Because really the non-disclosure, the

Rory Bellina (35:27):
Deal

George Mueller (35:27):
Document itself was still apply, but they wanted waivers. They were just

Rory Bellina (35:32):
Gettings,

George Mueller (35:32):
All sorts of waivers as to any remedies in connection with the decision to do this, which is totally just

Conrad Meyer (35:38):
So not only do they not give you the documents for analysis, they don’t tell you the amount that they’re going to possibly remit. They also say that you have to waive any culpability or to

George Mueller (35:49):
Participate. Well, you don’t get to participate a really good seat. You get to view and see what the deal

Conrad Meyer (35:53):
To view, but you

George Mueller (35:53):
Don’t get to actually participate.

Conrad Meyer (35:55):
Wow.

George Mueller (35:57):
And so we raised this.

Conrad Meyer (35:59):
That’s amazing.

George Mueller (35:59):
Well, we raised it and I think the issue is, and it’s a really good example of why you have to get these things in writing, both to manage the client’s expectations and then to remind yourself later, is that

Conrad Meyer (36:12):
On the front end?

George Mueller (36:12):
Yeah. Because council for the sellers did raise it. They did say, Hey, look man, this is really one-sided. But I think with that much leverage and that late end of the deal, everyone just goes along to get along to close. And you literally have a scenario where council is saying, look, you need to view this as this escrow. You’re never going to see it. Never going to see it. Alright, it’s gone. It is there. And you think it’s there, but

Conrad Meyer (36:36):
Oh, they’re going to bleed it dry the way this

George Mueller (36:38):
Is written. It is gone. Just expect the issue is whatever. It exceeds the,

Conrad Meyer (36:42):
It’s a slush fund. We don’t what it

George Mueller (36:43):
Cost.

Conrad Meyer (36:43):
It’s a slush fund.

George Mueller (36:44):
Well, but you say that, but technically it’s supposed to go to the federal government in this curative.

Conrad Meyer (36:50):
But we don’t know if they wrote a check. We don’t know. We don’t see the self-disclosure.

George Mueller (36:55):
Well, that was, I mean obviously I think a couple of things we had kind of asked about was that, look,

Conrad Meyer (37:00):
Show me the check proof

George Mueller (37:01):
Of payment. We want to see that it went there and it just says, oh, we’re doing a big disclosure. We can’t do anything about it. And just quiet. And then it goes,

Conrad Meyer (37:07):
Why can’t you have the actual self-disclosure?

George Mueller (37:10):
They’re holding the ES escort. You didn’t have an escrow

Conrad Meyer (37:12):
Agent. No, no. But the document that actually goes, because it’s a very specific document

George Mueller (37:16):
We asked for that told, we didn’t get that either. We were going to do a FOIA request for it, but I think given the confrontational nature of it,

Conrad Meyer (37:24):
Yeah, I

George Mueller (37:24):
Don’t think it’s subject to Foer. I wouldn’t

Conrad Meyer (37:26):
Is that’s, no, it’s not subject. We

George Mueller (37:27):
Got that far down the road with how can we verify they actually did this versus, and I think

Conrad Meyer (37:32):
Bunch of,

George Mueller (37:33):
And even in

Conrad Meyer (37:33):
This case, the

Rory Bellina (37:34):
Escrow wasn’t,

George Mueller (37:37):
The

Rory Bellina (37:37):
Seller’s essential liability wasn’t capped by the escrow.

George Mueller (37:41):
No, it’s just the escrow was just the money there. The cap. I think it was probably the purchase price. Right. Which is, it’s another thing. It’s fundamental reps. This may have been in a fundamental rep or they included the healthcare component of that and what would’ve been equivalently treated as a fundamental rep for purposes of subject tipping basket. Is it in the cap and all that? I think it was. I don’t think it is.

Conrad Meyer (38:06):
Yeah.

George Mueller (38:06):
And there were

Rory Bellina (38:07):
No, I

George Mueller (38:07):
Remember you

Rory Bellina (38:08):
And I went over this a lot, George. There was no qualifiers. It just said seller reps and warns that there had been no violations of healthcare laws. Capital hcl L and healthcare laws is obviously Stark. A K s keam false claims.

Conrad Meyer (38:21):
That was the defined term

George Mueller (38:23):
And the criminal stuff

Rory Bellina (38:24):
And the intent based. Yeah, the intent based A K S, which I don’t know how you give a rep and warrant on an

George Mueller (38:30):
Intent-based statute.

Conrad Meyer (38:31):
How do you do that? Are you omniscient? I guess? I don’t know.

George Mueller (38:36):
Well, with the subjective nature of it and how they do it, basically you’re accused of it. So you do. And if you self-report, well then you’ve completely kind of, I guess skipped past the idea of what

Conrad Meyer (38:47):
I would love to, who was on the other side of that.

George Mueller (38:50):
You hit with a reverse false claims.

Conrad Meyer (38:52):
You don’t have to tell me the name, but was there real healthcare counsel on the other side of this deal or was this, there

George Mueller (38:58):
Was capable counsel, not healthcare specific, probably they believe me that we discussed with them ad nauseum. They’re very, very capable practitioners who raised all the issues. It’s just a matter of the client wanted to was fine going through with it and did so with the caveats of it. But what happens is through the passage of time, you forget how comfortable you are. Cautionary language tells you it falls to the wayside. I want this money. What do you mean? It’s like, no, you don’t remember the parade of horrors that we visited you with and

Conrad Meyer (39:30):
Said, no,

George Mueller (39:31):
You’re not going to get it. It’s not going to be, I think there were emails even drafted. So I think they were protected.

Conrad Meyer (39:36):
Oh, got it.

George Mueller (39:37):
I think, but people forget that. And I think the idea is you just still want to give it your best shot. But yeah, it’s like what do you do? And you get excited when that anniversary is coming up and you think you’re going to get another check in the mail. How get that money? Well, they shouldn’t do that. And boom, they do it, but you don’t even know where they really spent it. Right. If you had an escrow agent, it’d be a way different deal because the escrow agent would at least let you know. Yes, we did cut a check and it was to a governmental agency to be

Conrad Meyer (40:01):
There. Just so for our listeners who might not be attuned to what all this means, I could tell you we’ve had a lot of some very interesting topics brought up. So in a healthcare deal, when you have alleged some sort of a fraud and abuse, the regulatory avenues that you can pursue include some sort of a self-disclosure protocol. And that protocol, they have two different self-disclosure protocols. And so those have specific things you need to do. And in this particular case, George and Rory, correct me if I’m wrong, that there was, I guess a unilateral dictated move to do the self-disclosure protocol with an also unilateral requirement for some sort of a large escrow related to paying off any kind of overcharges or overpayments to the government without giving you the actual knowledge of the analysis behind it, the amount in question and so forth. Is that fair

George Mueller (41:00):
Determination? I would say our client was basically sent a letter saying, Hey, we’re putting you on notice that we’re doing this and you’re responsible for it, and that’s all you’re going to get. Wow. And they kept trying to get us to sign the client to sign the waiver to get the information like, well, why would we do that? You’re not going to tell us anything anyway. You’re not going to let us help. We’ll let you know. I think what that turns into then is on the date when the escrows, otherwise do you make a demand for that? And then you force the response and when the response is what we would deem insufficient, then you evaluate your legal rights under the applicable law to say, well, we’re going to demand it. And you force, force force. And then they probably just hide behind the fact that you waive this, you can’t do that, et cetera.

Rory Bellina (41:45):
And even in the amount that was being held in escrow, I don’t believe it was a lot, even in that amount, in the deal documents, it said that any sort of investigation, attorney fees and costs would be eaten out of that

George Mueller (41:58):
Escrow.

Conrad Meyer (42:00):
So they have their own incentives.

George Mueller (42:01):
The more you push, the more the anhill gets. So

Rory Bellina (42:03):
They could bill against the escrow that they’re holding to do an investigation on their

Conrad Meyer (42:08):
Own. They get to pay themselves in a pool of money that they determine what that size is without any sharing any knowledge whatsoever.

George Mueller (42:15):
And it’s stunning then that healthcare compliance council would find something that they actually needed to report.

Conrad Meyer (42:19):
So there is a pot of gold at the end of the rainbow. If you decide the size of the rainbow, the bigger the pot, the how gold. If

George Mueller (42:26):
You build in those types

Rory Bellina (42:28):
Of terms

George Mueller (42:29):
In your escrows and your indemnities, then you really have to watch who’s driving the traffic and the reporting advices. Right? Because it gets to be, I’m not saying that’s what’s going on, but you just have to watch that.

Conrad Meyer (42:42):
It reminds me of real quick is remember like the BP oil spill? And the reason I’m saying this is because, remember, maybe I’m saying this wrong, but there was what a billion dollars put into a fund or something like that. Remember the BP oil spill?

George Mueller (42:57):
I do.

Conrad Meyer (42:57):
And there was someone in charge, I forgot who it was a firm or a man or somebody or a company that was in charge to allocate payments of funds based on BP oil money. And that person basically literally had a checkbook, and then they could also then take out their fees associated with administering the fund. So here someone is sitting on top of this pool of money that they’re responsible to divvy up for victims, but then they also get to pay themselves from the same pool of money, whatever rate, whatever. Maybe it was a fixed rate, but they get to pay themselves. So this is akin to that. So I mean, imagine if we had a pool of money that we get to determine the size of how we pay ourselves, and we don’t get to tell anybody what that looks like.

George Mueller (43:43):
Wow. Yeah. Yeah.

Conrad Meyer (43:45):
Wow.

Rory Bellina (43:46):
I want that deal.

George Mueller (43:49):
And I’m sure whoever did the BP payments did everything by the book. I’m sure. I’m not saying that. I’m not saying they

Rory Bellina (43:54):
Did. I’m just saying I’m analogizing to it. I’m not going to walk down that rabbit hole.

George Mueller (43:59):
Okay. I think we need to climb out of that rabbit hole.

Conrad Meyer (44:04):
Anyway. Anyway. So I think it’s good.

George Mueller (44:08):
So that’s an interesting, definitely an interesting, we’re running late on time, but to kind of wrap that up, don’t you have to build that in on the front end? Because in the back end you’re going to get taken to the woodshed on it, but that’s how those things work sometimes.

Conrad Meyer (44:27):
That’s very interesting. Well, look, we covered a lot of stuff today in gumbo conversation. That was really good.

Rory Bellina (44:34):
It was good. Definitely good conversations.

Conrad Meyer (44:36):
Any final thoughts, any words of wisdom, nuggets of information? I think we’ve given ’em all today.

Rory Bellina (44:44):
I think we’re good.

Conrad Meyer (44:45):
We’re good? Absolutely. Okay. Well look, everyone, we want to thank you very much for listening to another episode of Health Law Talk here at Chehardy Sherman Williams. We are George, Rory, Conrad, your, I guess disseminators of legal healthcare and corporate knowledge to the listening ship. We thank you very much for your time and look forward to our next episode. Have a great day. See you.

Intro (45:06):
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