mobile menu

11th Circuit Affirms Insurer Right to Clawback Reimbursement with Health Care Clinics

Healthcare attorney Jeanne E. Helton shares insight regarding a recent case involving clawback reimbursement with health care clinics.

Healthcare providers will need to take note of a recent case, Allstate Insurance Company v. Sara C. Vizcay, M.D. , 26 Fla.L. Weekly Fed. C435 (June 23, 2016). In this case, the 11th Circuit upheld the right of Allstate Insurance Company to get a full refund of all monies paid to three licensed health clinics in Florida because the medical director at the clinics did not perform the statutory obligation of a “systematic review of clinic billings to ensure that the billings are not fraudulent or unlawful.” In Vizcay, the clinics were not submitting complete claims and in some cases, the claims were for services not rendered. Dr. Vizcay reviewed approximately 5 cases a month and the cases numbered more than 100 a month. The jury found that the medical director’s review, in terms of number and case selection was not sufficient to comply with the statute, thus rendering all of the reimbursements paid by Allstate to the clinics refundable back to Allstate.

The implications of this case are significant. Insurers and perhaps relators can now review “compliance” in terms of statutory and regulatory adherence and hold providers financially accountable for payback if they fail to meet their obligations. This could conceivably be extended outside of the health care clinic arena to other forms of licensure, including ambulatory surgery centers, hospitals, home health agencies and other practitioners. The take away here is to make sure that your statutory and regulatory obligations are fully met because failure to comply is costly. With regard to clinics, make certain that the medical director has a documented system for selecting cases for review, is familiar with the coding for the services, reviews a percentage that is in excess of 5% (we would suggest at least 25%-30%) of the cases each month and reports any irregularities immediately. A record of which files are reviewed monthly should be kept as well for documentation and compliance purposes.

For further information regarding this matter, please contact any member of the Smith Hulsey & Busey Healthcare Practice Team.

Follow us on LinkedIn for more content updates