Therapists cry foul as Blue Cross asks for money back following over payment

(KMSP) - Blue Cross Blue Shield of Minnesota over paid hundreds of therapists last year and is now asking for that money back, a $4 million mistake that has mental health providers in the state crying foul.

More than 1,000 therapists in Minnesota received letters starting last August that they owed anywhere from $1,000 to $30,000 due to an error by the company. 

According to Blue Cross, the providers were entered into the company's system under the wrong code and had been paid 24 percent more than they should have. By the time anyone realized it, the loss had grown to several million dollars. 

Those mental health providers, however, say the money was long gone.

“The services have long since been paid for, the therapy long since been given,” said Kit Friedemann, an attorney representing dozens of providers. “They operate on razor thin margins and this is a Medicaid product to begin with so the payment rates are very low so there isn’t much to play with.”

Blue Cross gave providers until April 30 to set up a payment plan, but Friedemann says he doesn’t believe his clients should be responsible for the company’s mistake.

In a statement to Fox 9, the company said it values the vital role mental health professionals play in Minnesota but, "Blue Cross has a responsibility to pay for services at the rates agreed to in our contracts and to correct any errors once they're identified."

The company also says they'll work with every provider to figure out a payment plan that works for both of them, though if such a plan can't be worked out Blue Cross intends to start taking the money out of future reimbursements.

It's a move that isn't sitting well with those therapists, many of whom already operate on Medicaid and thin profit margins.

“It’s not in our mind an overpayment, it’s a pricing mistake by Blue Cross. They wish they could take it back and we think it’s unfair for them to do so,” Friedmann said.