4 tips for handling payer clawbacks: What the experts say

September 22, 2022
A recent #AskAOA webinar, hosted by the AOA Third Party Center, offered helpful advice for how doctors can address and respond to clawbacks.
4 tips for handling payer clawbacks: What the experts say

While payer challenges are often a point of confusion and contention for optometry practices, the AOA’s practice success initiative seeks to build members’ confidence in addressing these concerns, starting with payer clawbacks.

But what is a clawback? Essentially, a clawback is an instance where a plan processes a claim, issues an explanation of benefits (EOB) and reimburses the doctor, then later—years later in some instances—the plan decides there was something wrong with the claim and demands the payment back. In some circumstances, the plan may ask for a payment or recoup money from the reimbursement of a doctor’s current claims.

AOA Third Party Center (TPC) Committee Chair Steven Eiss, O.D., notes a clawback may happen when the plan claims a doctor was wrongly paid twice for the same claim or when the payer determines the patient wasn’t eligible for such coverage, and are usually automated processes or happen after a failed audit.

“With clawbacks, you face the dilemma of possibly harming your relationship with the patient, when having to bill them for services that both you and they thought were covered—sometimes even years later,” Dr. Eiss says.

In a recent #AskAOA webinar discussing best practices for addressing payer clawbacks, denials and records requests, AOA TPC experts answered members’ most-pressing questions about these payer issues. Find some of their recommendations and best practices below, and access the full #AskAOA webinar available online in the AOA EyeLearn Professional Development Hub.

4 tips for handling clawbacks 

  1. Don’t panic. It’s certainly disconcerting to learn of a payer’s clawback, especially when it occurs years later. But there’s no reason to panic and the best approach is to be prepared.

    Jason Ortman, O.D., AOA TPC member, says there are steps practices can take before a clawback ever occurs; namely, ensuring the practice’s financial policies are updated. For example, include clauses that if the insurance doesn’t pay or if the patient doesn’t present the correct insurance information, the onus is on the patient to pay. “Obviously, it’s an uneasy conversation when you get a clawback one or two years later and there’s a chance you won’t be able to collect on that,” Dr. Ortman says. “But having an updated financial policy that the patient signs allows you to be prepared so you’re not the one being left uncompensated for those services or materials provided.” The second step would be ensuring office staff review the patient’s insurance card at every appointment. This helps facilitate the correct approach for office staff when dealing with the insurer.

    Also, when a situation does occur, take the time to track down why the payer is attempting to clawback those payments, Dr. Eiss says. In a recent example, a payer sought clawbacks for erroneous duplicative payments though the payer’s lack of upfront communication with providers caused panic.

    “Know what the reason is—for example, frame-only audits. Maybe they’re looking just to make sure you were providing a prescription to the patient; or it could be, like before, eligibility issues that focus back on the payer as opposed to the provider. Take the time to figure out the reason for the clawback as it provides you with information on how to fight it,” Dr. Eiss says.

  2. Appeal if incorrect. Every practice is going to experience a third party claim denial, says Nick Colatrella, O.D., AOA TPC member. While some denials are easily fixable, such as a claim submission error, others like lack of coverage are not so much. It’s very frustrating when you get an EOB and find out a claim from several weeks, months or years ago has been rejected and now that third party payer wants that money back. It’s not something to be taken lightly, but don’t accept it as the final decision.

    “Appeal, appeal, appeal,” Dr. Colatrella says. The goal of the appeal is to provide medical necessity and if correctly done you usually get the claim paid. Most claims appeals are reviewed by doctors so proving that ‘medical necessity’ component is critical. And don’t fret if the appeal is denied—often there are multiple levels of appeals.

  3. Know the deadlines, respond promptly. Doctors need to read the communications from their third party payer thoroughly and take action in a prompt manner, Dr. Ortman notes. Part of this process is internal: ensure your email, practice address and contact information are correct with the payer so these communications are getting to the right person to respond with the right kind of information in the appropriate timeframe. If you don’t respond and act on it, Dr. Ortman says, the insurance company assumes they are in the right and will take that money back. Often, payers require 90 days to respond.

    Adds Jesse Jones, O.D., AOA TPC member: know the plan policies beforehand so you’re prepared for a clawback situation. Often, entry-level representatives with the payer will not know the intricacies of the policies, and doctors’ familiarity can facilitate a more-thorough conversation.

    Colatrella says having a defined process for payer denials and clawbacks is important. Empower the staff to respond right away, such as using a template letter of appeal for the staff to update the patient information and condition, and to respond immediately.

  4. Know your state laws. Doctors should also look to their state laws for help. For instance, some states have a “look-back” period that allows payers only a limited timeframe for which to review payments for clawbacks. Check with your state association or the AOA to see if there is a state law that might apply.

    To that point, many state associations have a third party committee that will be familiar with the issues happening in a state or region. Start with the state association to help resolve your payer issue, then the AOA TPC is always available to provide further assistance. Dr. Colatrella says the AOA TPC does a lot to provide supplemental information for doctors to include on appeal, such as studies to support medical necessity for certain procedures.

To help facilitate these conversations with payers and patients, the AOA offers two new template letters for doctors to leverage for payer denials and patient communication.

The AOA’s practice success initiative

Third party payer issues top the list of concerns that AOA members and nonmembers shared with the AOA as the organization began a process of reprioritization that ensures optometry practices have what they need to succeed in 2022 and beyond.

Two years ago, the AOA Board of Trustees approved an organization-wide reprioritization in all-out support of members’ response to the COVID-19 pandemic. This mobilization ensured that optometry practices nationwide had the tools and resources to not only access over $2.1 billion in federal pandemic relief available but also continue providing eye health and vision care to their communities.

Now, the AOA once again looks at an organizational reprioritization to focus on matters that immediately affect optometric practices, including: 

  • Challenging and overcoming third party payer issues
  • Expanding support to member doctors and growing membership via tangible benefits
  • Increasing cross-organization collaboration to ensure alignment on behalf of doctors

The initiative is intended to help AOA members’ bottom lines, be they tied to financial success, staff success or success in optometry’s advocacy, and it spans across all practice modalities.

“The AOA is fully committed to working to address the payer issues that are impacting your practices the most,” noted AOA Trustee Teri K. Geist, O.D., during the webinar. “As we continue to develop and disseminate additional tools and resources, we want to address the issues of greatest concern to you.”

To provide feedback about future webinar topics, tools or resources that would be impactful to you or your practice, email president@aoa.org.

Help AOA hold insurers accountable

Interested in learning more about payer advocacy efforts or aware of harmful actions or policies by insurers? Help the AOA’s payer advocacy by taking the following steps: 

  • Report plan abuses to the AOA by emailing stopplanabuses@aoa.org.
  • Visit the AOA Action Center to learn more about federal legislation, such as the Dental and Optometric Care Access Act, H.R. 3461 / S. 1793, that would curb common and egregious plan abuses.
  • Invest in AOA-PAC. Use your eight-digit AOA membership ID number and log in from your computer to make an immediate investment* to support your patients and the profession. Text “EYES” to 41444 to invest directly from your mobile device.

For more information or questions about the AOA’s payer advocacy, please contact the AOA TPC at tpc@aoa.org.

*Contributions to the AOA-PAC are for political purposes and are not tax deductible. Only AOA members and other eligible persons may contribute. Contributions will be screened and those from non-eligible persons will be returned. You have the right to refuse to contribute without fear of reprisal. You will not be advantaged or disadvantaged because of how much you give or because you do not give.

AOA EyeLearn Professional Development Hub

AOA EyeLearn is members’ online education resource with an ever-expanding catalog of professional development content, webinars and tools suitable for both doctors and optometric staff.

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