Provider Organizations and Managed Care Reimbursements: Legal and Contractual Issues

New York Westchester Square Medical Center (NYWSMC) is a 205-bed acute care hospital located in the eastern part of the Bronx, affiliated with the NYPresbyterian Healthcare System. They have been experiencing a large number of claims denials by the managed care organizations (MCOs) with whom they contract, and believe that the MCOs have not acted in compliance with applicable laws and/or with the contracts between the Hospital and the MCO. The Capstone team has identified MCO contract provisions pertaining to reimbursement procedures and dispute resolutions, and are evaluating if the provisions are consistent with relevant statutes and regulations. There are a number of laws that are particularly relevant to procedural issues related to claims reimbursement, such as time limits for payment of claims, utilization review and appeals processes, and pre-authorization issues, among others. In addition, the Capstone team reviewed various data associated with the Medical Center’s appeals and the MCO’s responses to assure that the MCO’s are in compliance with the various legal aspects of this component of their business relationship with the Medical Center. This analysis allowed the Capstone team to determine whether or not the most common reasons given for denial of claims at NYWSMC has any legal basis, and to devise a plan of action for improving the Hospital’s rate of recovery with respect to reimbursement of denied claims.