Dermatologist Steven P. Rosenberg, M.D., chases Humana for $120,000 in claims as old as two years
Clinical pathology laboratories often have problems with health insurance plans that delay paying legitimate claims for reimbursement. Now comes news of a unique strategy successfully employed by a Florida dermatologist who was frustrated that one payer was taking as long as two years to settle his claims.
At the center of this story is Steven P. Rosenberg, M.D. After waiting more than two years for Humana Inc. (NASDAQ: HUM) insurance to reimburse his West Palm Beach dermatology practice for about $120,000 in unpaid claims, Rosenberg decided to take aggressive action. Wanting to avoid the added costs of attorneys, Rosenberg made time to read up on the law and brainstorm. His solution caught Humana off guard and he ended up collecting a substantial amount of the money that Humana owed him. Rosenberg’s solution is something that medical laboratories and pathology groups could employ in cases where a health insurer owes them significant amounts of money.
Rosenberg’s strategy was simple. Last November, he took Humana to small claims court—which handles disputes of $5,000 or less. Because most claims were less than $200, Rosenberg organized them into bundles and filed a small claims case under the $5,000 limit. Partly due to the element of surprise, the gambit worked.
“[Humana’s Attorney] had never been to small claims court before,” explained Rosenberg during an interview with a reporter from the Miami Herald. Human offered to settle, and Rosenberg accepted. But not before he warned them he was far from finished collecting what he felt they owed his practice.
“This is the first of 25 claims we’ll be submitting,” Rosenberg said. “I told him Humana could save the $350 filing fees times 25 and his time and fees times 25 if the insurance company would just process our claims.”
At first, it seemed like it was over. Humana paid the initial settlement, but Rosenberg did not hear from them after that. But the second lawsuit changed that. In the past month, Rosenberg estimated he received about $80,000 in reimbursements from Human. He is expecting another $40,000 or his second suit will go to trial in mid-January.
“When have you heard of someone suing for $5,000 and getting $80,000?” he asked.
Rosenberg’s use of small claims court also had another benefit. He saved the 30% to 40% typically paid to attorneys who handle collection cases for physicians and other healthcare providers. Rosenberg’s creative solution to get a major health insurer to pay a large backlog of legitimate claims has useful lessons for clinical laboratories and pathology groups. He demonstrates how clever use of small claims court can turn the tables on a health insurance plan that continually delays payment of properly-submitted claims.
Clinical laboratories and pathology groups may want to consider how use of small claims court in selected instances might be a helpful strategy in collecting overdue claims from a health insurer that is obviously delaying payment for properly-submitted claims. As Dr. Rosenberg, the dermatologist in Florida, demonstrates, suing the health insurance company in small claims court is one way to collect legitimate claims when a health insurer is not reimbursing in a timely basis.