Client Alert: The Importance of Promptly Denying Medical Bills Upon Receipt of the Form CMS-1500

February, 2017  | By Michael S. Fox

Recently, I had an opportunity to assist with the handling of a case wherein a medical provider was seeking payment of medical bills which we contend were properly denied; however, the provider was relying upon a narrow interpretation of the COMAR regulations to argue that we waived the right to contest the bills. Specifically, in this case the Claimant’s attorney was hired by the medical provider in order to assist in securing payment of outstanding bills previously sent to the Self-Insured Employer.

In this particular action before the Maryland Workers’ Compensation Commission, the attorney representing the medical provider resubmitted all outstanding medical bills directly to counsel for the Self-Insured Employer, and then filed a Claim for Medical Services with the Commission after 45 days of submission of the bills. In response, the Self-Insured Employer filed a timely Controversion of Medical Claim with the Commission. At a hearing before the Commission on the Self-Insured Employer’s Controversion of Medical Claim, the attorney for the provider relied upon a COMAR regulation, specifically, and argued that if an employer or insurer fails to file a notice of denial of reimbursement within 45 days of receipt of the CMS-1500 (also more commonly known as the Health Insurance Claim Form) then they have waived the right to deny reimbursement. Specifically, the provider’s attorney argued that the Self-Insured Employer did not file any notice of denial of reimbursement within 45 days of the resubmission of the bills to counsel for the Self-Insured Employer. The Self-Insured Employer rebutted this argument, contending that it had followed the proper procedure per the COMAR regulations for filing a timely Controversion of Medical Claim, and therefore, it should not be precluded from contesting these bills. Ultimately, the Commission did not agree with the narrow interpretation of the COMAR regulation as argued by the provider, and sided with the Self-Insured Employer, denying the provider’s request for payment of the outstanding medical bills. The provider filed a timely appeal of this decision to the Circuit Court for Baltimore City.

While the Commission refused to strictly applying the COMAR section of the Maryland regulations, on appeal, the Circuit Court for Baltimore City decided to strictly apply this regulation. Specifically, after arguing dueling Motions for Summary Judgment, the Court decided to narrow the interpretation of this regulation to mean that any time an employer or insurer receive a CMS-1500 Form, there is an affirmative obligation within 45 days of receiving the bill to either reimburse the provider for the claim of treatment or services, or file a notice of full or partial denial of reimbursement with the provider. In the case at hand, the Self-Insured Employer argued that once the initial CMS-1500 Forms were submitted for treatment, the Self-Insured Employer provided prompt notice that the recommended treatment was denied. Despite this notice of denial, the provider resubmitted the request for treatment in a new CMS-1500 Form, and sent it directly to Self-Insured Employer’s counsel. As such, the Self-Insured Employer argued on appeal that the provider had sufficient knowledge of the denial of the requested treatment at the outset of the initial request, and that it did not need to continuously deny the treatment upon resubmission of the bills to counsel for the Self-Insured Employer. The Court disagreed with the Self-Insured Employer, and reversed the Commission’s decision, finding that even these resubmitted CMS-1500 Forms sent to Self-Insured Employer’s counsel required additional filing of notices of denial, even though one had already been filed in response to the prior initial submission of the CMS-1500 Form for the same requested treatment.

As a result, we are looking into a regulatory or statutory solution to this issue, but in the meantime we highly recommend that any time you receive a CMS-1500 Form requesting payment of medical treatment that you do not wish to authorize, please promptly within 45 days of receiving the CMS-1500 Form, file a notice of denial of reimbursement with the provider. Please also be sure to file such a notice even if you receive a duplicate CMS-1500 Form for treatment for which you already provided a notice of denial of reimbursement. By doing this, we can ensure that you do not waive your right to deny reimbursement should the medical provider proceed with further litigation to try and have such bills paid, as was done in the instant case.