Pennsylvania Blues plan ordered to back off from clawbacks

A mediator ruled that efforts to recoup overpayments made more than 18 months earlier violated the plan's class-action settlement.

By Emily Berry — Posted Sept. 11, 2009

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Some Pennsylvania physicians faced with clawbacks from Independence Blue Cross will get a break following a mediator's ruling that some of the plan's collection efforts violated a 2007 class-action lawsuit settlement.

A mediator ruled Aug. 13 that the Philadelphia-based plan could not collect for overpayments made more than 18 months earlier because doing so would violate a class-action settlement over payment issues between physicians and the BlueCross BlueShield Assn., reached in 2007 and finalized in June this year.

Independence Blue Cross spokeswoman Karen Burnham said the company does not comment on matters under litigation.

Independence earlier this year sent letters to physicians at 1,483 practices notifying them that the plan intended to collect overpayments made for surgical services, some of which were in excess of $100,000, said Dennis Olmstead, chief economist and vice president for practice economics and payer relations for the Pennsylvania Medical Society.

Physicians in some cases disputed the accuracy of the overpayment claim. At a minimum, the medical society believed that collections for payments made prior to October 2007 would violate the class-action settlement, he said.

After trying unsuccessfully to work with the plan directly, the group filed a compliance dispute, Olmstead said. Dispute facilitatory Deborah Winegard was out of the country and could not be reached at this story's deadline.

The dispute eventually went to mediation with attorney Martin Quinn, Olmstead said.

The week after a hearing over the dispute, Quinn ruled that collecting for any payments made prior to October 2007 would indeed violate the terms of the settlement.

Olmstead said some details of the deal remain unclear, including how the plan will repay physicians who already succumbed to Independence's collection demands, and when the plan will send out new notices for remaining overpayment claims.

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