AIG & Coventry (and California) Squeeze QME

AIG & Coventry (and California) Squeeze QME

California Medical-Legal physician evaluators, be advised: some payers still attempt to improperly apply Preferred Provider Organization (PPO) discounts to Medical-Legal bills.

How can payers defy the California Division of Workers Compensation (DWC) and simply take evaluators’ reimbursement? Payers know two facts about California workers’ comp:

  1. The DWC tacitly allows payers to ignore California laws, regulations and rules, and
  2. Most Medical-Legal evaluators do not have the administrative resources to pay $180 to file for Independent Bill Review (IBR) to reclaim the money taken under the guise of “PPO Savings.”

Once again, AIG inappropriately reduced reimbursement for Medical-Legal services based on a PPO contract. When the Qualified Medical Evaluator (QME) submitted a Second Review appeal disputing the PPO “savings,” Coventry PPO stepped in and doubled down, insisting that AIG was within its rights to pocket the QME’s reimbursement.

However, once the QME paid $180 to request IBR, AIG backed down before the state’s IBR proxy, Maximus, even issued a decision.

Let this story be a warning. California Medical-Legal evaluators must keep their own version of the two facts in mind:

  1. The State of California will not stop the PPO shake-down. By taking no action to rein in PPOs, the state essentially allows PPOs to pillage its workers’ comp providers.
  2. Payers will likely deny your Second Review appeals disputing incorrect PPO discounts. To recover that revenue, be prepared to pay $180 to file for IBR.

AIG & Coventry Squeeze QME  

In June, the QME billed AIG for a Comprehensive Medical-Legal psychological evaluation according to the Medical-Legal Fee Schedule (MLFS). In addition to the main evaluation charge (ML201), the QME also billed code MLPRR for thousands of pages of record review, as well as diagnostic testing at Official Medical Fee Schedule (OMFS) rates.

AIG sent an Explanation of Review (EOR) to the QME, detailing the reimbursement paid. Instead of paying the QME the reimbursement allowed by the fee schedules, AIG kept $638.67 of the amount owed the evaluator. AIG justified keeping the reimbursement by citing the application of a Coventry PPO deduction.

AIG & Coventry took the QME’s money despite the fact that PPO discounts do not apply to Medical-Legal services. AIG’s actions are (again) in clear violation of DWC rules and IBR precedent, but we must remember Payer Fact #1: The DWC allows payers to ignore California laws, regulations and rules.

Coventry Speaks & AIG Denies Appeal

To dispute the incorrect payment, DaisyBill submitted a Second Review appeal on the QME’s behalf (the QME is a client of DaisyCollect, our managed billing service). But instead of hearing back from AIG, a Coventry PPO agent contacted DaisyBill and left a voicemail insisting the PPO reductions were valid.

Apparently, Coventry can fearlessly dismiss DWC rules that state PPO discounts do not apply to the MLFS. This message clearly demonstrates ML Evaluator Fact #1: The State of California will not stop the PPO shake-down. By taking no action to rein them in, the state essentially allows PPOs to pillage its workers’ comp providers.

AIG Does a 180° (But Still Owes $180)

AIG denied the Second Review appeal. The AIG denial makes logical sense, because AIG keeps the $638.67 unless the QME pays $180 to file for IBR within 30 days of receiving the Second Review denial.

To preserve the QME’s rights to correct reimbursement, DaisyCollect paid $180 and filed the IBR request disputing the incorrect $638.67 Coventry PPO reimbursement reduction.

Less than a week after the IBR request, AIG reversed course and paid the disputed amount in full —  before Maximus issued an IBR decision. As of this writing, Maximus has yet to issue its ruling. Should Maximus rule in favor of the provider, AIG will be ordered to restore the $180 IBR filing fee. Of course, per Payer Fact #1, we won’t be holding our breath (The DWC tacitly allows payers to ignore California laws, regulations and rules).

While we’re happy to recover the improperly withheld reimbursement amount for our client, we don’t expect this dispute to be the last of its kind — because we know the facts. California simply makes it easy for payers like AIG (and their friends at Coventry) to improperly keep Medical-Legal evaluators’ reimbursement.

If the mere threat of accountability is powerful enough to force AIG’s hand, imagine what actual, consistent enforcement of the rules could accomplish. To paraphrase Scott Galloway, the occasional “perp walk” for payers who play these games could go a long way towards precluding unnecessary disputes.


Make RFAs, billing, and appeals easier than ever — and get paid faster. DaisyBill empowers providers to collect what’s owed in record time. Contact us to learn how we can help your practice.

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