Many commercial insurance companies currently employ a pay-to-patient reimbursement model for out-of-network treatment providers, meaning that insurers refuse to pay providers directly and instead issue reimbursement checks to patients in the patients’ names, even when the patient has asked in writing that the reimbursement be given directly to their provider. Insures use this tactic in an attempt to force providers to go in network. Because of the nature of substance abuse and mental health disorders, giving patients access to such funds is highly problematic and can lead to relapse, overdose, or even death. It also creates problems for providers who oftentimes provide quality care, and never receive reimbursement from the insurance companies due to the patient’s failure to turn over the funds to them.

In order for a provider to avoid this problem, it is important to assure that all of the necessary legal forms have been completed by each patient upon intake. Having the proper forms in place is essential and will oblige insurers to recognize and honor a patient’s right to assign insurance benefits to treatment providers.

An important caveat to consider is that federal law currently indicates that self-funded plans that are governed by ERISA (federal law) are permitted to include an anti-assignment of benefits clause if the insurer so chooses. In other words, insures are not required to honor an assignment of benefits if the plan documents indicate that the benefits are not assignable. Under this scenario, the use of a Limited Power of Attorney form becomes very important.

Regardless of what type of plan is at issue (self-funded or fully insured), it is important to assure that as a provider, you not only do everything you can to keep your patients safe, but that you put yourself in the best position to receive direct payment for services rendered to out of network insureds. The routine execution of an Assignment of Benefits and/or a Limited Power of Attorney form by each patient upon admission is the best way to do so.

Please contact the Florida Healthcare Law Firm to discuss.