In 2011, the California Medical Association (CMA) raised concerns with Anthem’s attempts to recoup money from physicians beyond the statutory timeframe. Through its Special Investigations Unit (SIU), Anthem was pursuing physicians for refunds of payments made outside of the 365-day period allowed by California law. That law permits recoupment of claims older than a year only if the payment was made based on fraud or misrepresentation. CMA determined that Anthem was employing a definition of “misrepresentation” that was much broader than what is allowed under law. CMA thus filed a formal complaint with the Department of Managed Health Care (DMHC).

After reviewing the issue, DMHC issued a cease and desist order to Anthem for violating California’s unfair payment practices law. According to DMHC, between 2008 and 2011, Anthem sought reimbursement from at least 535 providers for claims that were more than one year old, in violation of the Knox Keene Act.

Anthem challenged the cease and desist order, and in December 2014 the Sacramento Superior Court issued a judgment that struck down parts of DMHC’s order but upheld DMHC’s and CMA’s interpretation of “misrepresentation.” The Court’s judgment requires that any attempt by Anthem to recoup past the 365-day time limit would violate the law unless Anthem’s recoupment notice clearly explained why Anthem believed the overpayment was caused in whole or in part by either the physician’s fraud or misrepresentation to Anthem. The Court confirmed that “misrepresentation” must be “done without any reasonable ground for believing it was correct.”

Since the court’s ruling, CMA has heard reports that Anthem’s SIU is, again, pursuing recoupments beyond the 365-day timeframe for payments made based on misrepresentation. CMA is concerned that the SIU is employing a definition of “misrepresentation” that is not in compliance with DMHC’s cease and desist order and the Sacramento Superior Court’s judgment.

CMA is asking physicians to contact its Center for Economic Services if they receive a recoupment request where the payor is attempting to recoup beyond 365 days from the date paid at (916) 551-2061 or jwilliams2@cmadocs.org.

To help physicians understand their rights and options when it comes to health plan refund requests, CMA has published a "Special Investigations Unit Audit Guide." This document is available free to members in the CMA Store.