[co-author: Stephanie Kozol]

On January 17, after an extensive investigation by the Consumer Protection Section of the Colorado Department of Law, Colorado Attorney General Phil Weiser announced that medical billing company Flatirons agreed to refund payments by Coloradans for allegedly deceptive billing notices, totaling $12,933.89. Flatirons creates and processes claims for insurance reimbursement, coverage appeals/denials, monetary payments owed by patients, while also serving as a billing point of contact with insurers and patients.

In December 2018, Flatirons acquired medical billing company Delphi Management Services LLC (Delphi), inheriting preexisting contracts from Delphi, including contracts with surgical assistants. Some of the surgical assistants assisted in-network surgeons with procedures even if the surgical assistants fell outside of the patient’s network. Flatirons sought reimbursement from insurance carriers for these out-of-network surgical assistants.

If the insurer did not pay the surgical assistant the requested amount, Flatiron sent patients a “statement detail” — formatted like a bill — which contained language, such as “This Is Not A Bill However We Need Your Assistance!! Please Call Your Insurance And Request This Claim Be Processed In-network Per State Mandate.” Additionally, the statement detail listed the surgical assistant’s “billed rate” at a figure typically higher than the rate insurance companies reimburse providers. In some instances, Flatirons and its client sent patients to a collection agency for the full billed amount. As a result, Flatirons agreed to refund patients who made payments on the misleading bills.

Why This Matters

This case illustrates that state AGs remain focused on misleading and deceptive communications to consumers. Specifically, AGs seem concerned with false claims violations in the medical industry.