A Miami-area physician practice owner blames a “systemic failure” for closing his general practice in 2006 – just three years after purchasing the established office from a retiring physician.
“I don’t think I will ever own a practice again,” said Carlos Barberena, former owner of Neworld Health Care Center in South Beach, Fla., once one of the largest general practices in southern Florida. “It’s impossible to run a profitable practice anymore.”
Barberena said he lost his practice when he couldn’t keep up with his monthly overhead of almost $105,000.
“It’s possible that this is happening all over the U.S.,” said Judy Hanover, health insurance industry analyst and research manager for Healthcare Industry Insights.
One reason Neworld had a hard time getting paid was that one of its third-party payers, Blue Cross Blue Shield of Florida, sends out-of-network payments directly to patients. The practice had to chase its patients for the bills, wasting time and money and not getting paid in a timely manner.
“It’s the provider’s responsibility to collect payments after the insurance company sends reimbursement to the patients,” said Hanover. “This protects the patient from being overcharged by the provider.”
The main payer for Neworld was UnitedHealthcare. According to Barberena, many of his claims were denied by the Minnesota-based health plan.
UHC marked a large batch of Barberena’s resubmissions as a “questionable number” because it was so large. Some claims had been denied two or three times and he resubmitted more than the average practice would on a regular basis.
Barberena said he received only about $74,000 out of the $150,000 he claimed UnitedHealthcare owed his practice.
“Insurance companies can be hard to interpret. It’s a matter of finding out what the rules are, providing quality services at fair prices,” said Hanover. “In many cases, the most expensive (practices) will go out of businesses.”
Barberena said some claims were rejected initially because he started billing the insurance company under a new name. Most practices start out small, so to have a full patient roster from the beginning was a bit suspicious to UnitedHealthcare.
Of the approximately 500 total patients in Barberena’s practice, 180 were HIV patients, who can sometimes generate high-use flags when attending appointments frequently for high-cost treatments.
UHC flagged Neworld as possibly fraudulent when it resubmitted so many claims in such a large lump sum, including claims for costly HIV treatments. The large submission sent up red flags.
“Insurance companies use data mining and other techniques to find fraudulent claims,” said Hanover. “The methods can help detect charges that don’t necessarily align with a diagnosis.”
Hanover said that some insurance companies become overly cautious about reimbursing providers in areas that are well known for fraud.
“Florida is a big state for Medicare fraud,” Barberena acknowledged. “It’s so rampant, out of control.”