Limiting Exposure to Contested Medical Bills – The Effect of Denial

Dealing with medical providers can prove difficult at times, especially when it comes to agreeing on reasonable prices for the services they render. In a recent decision, Roanoke Ambulatory Surgery Center v. Bimbo Bakeries USA, Inc. , 2019 Va. App. LEXIS 21, the Court of Appeals added an extra layer of difficulty by expanding the time a medical provider has to file an application contesting the sufficiency of payment.

Va. Code § 65.2-605.1(F) provides the statute of limitations for medical providers to bring a claim contesting payment for health care services provided to a claimant. Such a claim cannot be heard unless “(i) such claim is filed within one year of the date the last payment is received by the health care provider pursuant to this section or (ii) if the employer denied or contested payment for any portion of the health care services, then, as to that service or portion thereof, such claim is filed within one year of the date the medical award covering such date of service for a specific item or treatment in question becomes final.” (Emphasis added).

In the past, Va. Code § 65.2-605.1(F)(ii) was interpreted to apply to denied or contested claims only. However, the Court of Appeals recently expanded the application to include denied or contested medical bills. In Roanoke, the Court considered whether the medical provider’s September 1, 2017 application seeking payment of outstanding medical bills for services rendered on April 29, 2015, and September 18, 2015, was barred by Va. Code § 65.2-605.1(F). The employer argued payments for services rendered were made on May 27, 2015, and October 20, 2015, and since the medical provider’s application was not filed within a year of either payment date the application was barred by Va. Code § 65.2-605.1(F)(i).

The medical provider and the Court saw this case differently. The medical provider argued Va. Code § 65.2-605.1(F)(ii) should be applied since the employer contested medical bills and a medical award related to the contested services was not entered until July 27, 2018. The Court agreed with the medical provider on both points. First, the Court noted the employer clearly contested the medical bills in its “Review Analysis” documents sent to the medical provider providing an explanation for its partial payments. The review documents used the following language: “Amounts billed above the recommended allowance are hereby objected to as being in excess of the amounts authorized under state law.” The Court found the language used constituted a contest of medical payments due, thus triggering Va. Code § 65.2-605.1(F)(ii). Next, the Court determined since Va. Code § 65.2-605.1(F)(ii) applies and a medical award related to the services contested was awarded on July 27, 2018, the application filed September 1, 2018, was well within the one-year deadline allowed by the statute.

The Court of Appeals decision in Roanoke represents a shift in viewpoint on Va. Code § 65.2-605.1(F)(ii). Thus, in handling claims going forward employers and insurers should consider altering the language in their explanation of reviews of medical bills. Specifically, the language should be monitored to eliminate any express denial or contest of charges, such as the “hereby objected to” language found in Roanoke. Instead, using language such as “fee reduced to the agreed upon contractual rate” should be considered. Implementing this small change could save large headaches and create large savings in the future.

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