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APA Services stops abusive insurance recoupment demands over $100,000

Months of advocacy lead to Wellmark Blue Cross and Blue Shield of Iowa withdrawing demands for payment from psychologists.

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American Psychological Association. (2020, August 13). APA stops abusive insurance recoupment demands over $100,000.

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On Aug. 3, 2020, following several months of advocacy by APA Services, Inc., and the Iowa Psychological Association (IPA), insurance company Wellmark Blue Cross and Blue Shield of Iowa agreed to stop abusive audits on psychologists and withdraw hundreds of thousands of dollars in recoupment demands.

Last fall, several APA members contacted the APA Services Legal and Regulatory Affairs (LRA) staff about audits conducted by Wellmark and subsequent recoupment demands—one practice faced a demand over $100,000. The basis for the collections were 1) a strange interpretation that the 60-minute psychotherapy code is only appropriate for crises and a few other narrow circumstances, and 2) arbitrary, unexplained determinations that only a handful of sessions were medically necessary (e.g. five or 10 sessions)

APA Services and IPA explained to Wellmark (PDF, 265KB) that the reviewer in these cases used bizarre standards that providers had no knowledge of. Wellmark suspended the recoupment requests and conducted a second review using known standards.

Unfortunately, the second review was just as flawed and led to recoupment demands exactly or almost exactly matching the original demands—despite using a different standard. This time the reviewer penalized providers for alleged record-keeping deficiencies that were not outlined in the published documentation requirements.

APA Services filed a second complaint letter (PDF, 284KB), copying the relevant state and federal agencies, and demanded that the recoupment demands be immediately withdrawn.

After this significant advocacy effort, Wellmark ultimately withdrew its huge demands and promised to take a purely educational approach to record-keeping issues. This continues LRA’s perfect success record in challenging large, abusive audits, dating back to the Oxford audits in the New York City tri-state area in the mid-2000s.

How to practice good record-keeping

Members facing problematic record-keeping audits (PDF, 649KB) should ensure that records are kept in compliance with the payer’s requirements, which will help demonstrate that services were provided and were medically necessary. While we don’t offer individual assistance with appeals, LRA can intervene when insurers’ systemic abusive practices impact a larger segment of membership.

If you are experiencing problems, you can report your experience with us or your state psychological association. If your situation is part of a wider pattern, APA Services will assess the situation for a possible course of action.

Examples of other recent insurance advocacy include:

  • In February, APA and APA Services joined the California Psychological Association to file a complaint (PDF, 208KB) and met with the California Department of Managed Health Care about allegations from members against Kaiser Permanente in California. The key allegation is that patients with very serious mental health diagnoses have to wait four to six weeks or more between therapy appointments, due to chronic understaffing.
  • In August, APA Services and the Michigan Psychological Association met with a major Midwestern insurer to discuss concerns over network adequacy and closed panels.
  • In July, APA Services and the Maryland Psychological Association advocated for coverage of Health Behavior Assessment and Intervention services by a major East Coast insurer, using this as a test of a new brief advocacy document on the benefits of those services from APA's Office of Health Care Financing.
  • In the last few months, APA Services contacted major national insurers like Aetna, Anthem, Cigna, and Optum, and more regional companies like Blue Cross and Blue Shield of Kansas City (along with Missouri Psychological Association and Kentucky Psychological Association) to urge them to greatly extend the effective dates of their expanded telehealth policies for COVID-19 (and expand the breadth of those policies). Subsequently, all of these companies have significantly extended their telehealth policies, some until the end of the year.