Using ERISA to Get Your Claims Paid

Report
Annual Clinical Assembly
American College of Osteopathic Surgeons
Las Vegas, Nevada
November 14-17, 2013
Thomas J. Force, President
The Patriot Group
(631) 665-1880 Ext. 7
TForce@ patriotcompli.com
Thomas J. Force, Esq.
The Force Law Firm, PC
(631) 665-1832 Ext. 5
[email protected]
Lets evaluate some case studies…
Claims Submitted and Paid
(Before ERISA APPEALS)
Case Study #1
Procedure:
In patient consult and Lap Band Adjustment
CPT Code:
99233, S2083
Charge Amount:
$13,000.00
Initial Payment before appeal:
$255.65
Payor:
BCBS Blue Card
(1.9 % of total charges)
Case Study #2
Procedure:
ER Consult and Laparoscopic Cholecystectomy
CPT Code:
99284, 44970
Charge Amount:
$45,000.00
Initial Payment before appeal:
$25,580.00 (56.8 % of total charges)
Payor:
United Healthcare
Claims Submitted and Paid
(Before ERISA APPEALS)
Case Study #3
Procedure:
In patient consult, Laparoscopic Appendectomy,
umbilical hernia repair
CPT Code:
99223, 44970, 49585
Charge Amount:
$73,000.00
Initial Payment before appeal:
$19,400.00 (26.5 % of total charges)
Payor:
Oxford
Case Study #4
Procedure:
ER Consult, Lap Band Adjustment
CPT Code:
99283, S2083
Charge Amount:
$15,000.00
Initial Payment before appeal:
$769.00 (5.1% of total charges)
Payor:
United Healthcare
Claims Submitted and Paid
(Before ERISA APPEALS)
Case Study #5
Procedure:
ER Consult, Laparoscopic Appendectomy
CPT Code:
99284, 44970
Charge Amount:
$ 50,000.00
Initial Payment before appeal:
$ 17,905.49 (35.8 % of total charges)
Payor:
Cigna
Case Study #6
Procedure:
Removal of Gastric Band, Lysis of Adhesions
CPT Code:
43772, 49320
Charge Amount:
$ 40,000.00
Initial Payment before appeal:
$ 836.75 (2.0% of total charges)
Payor:
Empire BCBS
Claims Submitted and Paid
(After ERISA APPEALS)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #1
In patient consult and Lap Band Adjustment
$ 13,000.00
$ 255.65
(1.9 % of total charges)
$ 10,655.65 (81.9 % of total charges)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #2
ER Consult and Laparoscopic Cholecystectomy
$ 45,000.00
$ 25,580.00 (56.8 % of total charges)
$ 45,000.00 (100 % of total charges)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #3
In patient consult, Laparoscopic Appendectomy,
umbilical hernia repair
$ 73,000.00
$ 19,400.00 (26.5 % of total charges)
$ 62,050.00 (85% of total charges)
Claims Submitted and Paid
(After ERISA APPEALS)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #4
ER Consult, Lap Band Adjustment
$ 15,000.00
$ 769.00
(5.1 % of total charges)
$ 15,000.00 (100% of total charges)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #5
ER Consult, Laparoscopic Appendectomy
$ 50,000.00
$ 17,905.49 (35.8 % of total charges)
$ 50,000.00 (100 % of total charges)
Procedure:
Charge Amount:
Initial Payment before appeal:
Payment after appeal:
Case Study #6
Removal of Gastric Band, Lysis of Adhesions
$ 40,000.00
$ 836.75
(2.0 % of total charges)
$ 40,000.00 (100% of charges)
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Use ERISA to appeal denied and underreimbursed claims
Need Valid AOB and Patient Retainer
Ensure that consents include statement that
patient is ultimately responsible for
deductibles, coinsurance and balanced bill
Fee Forgiveness a big problem for OON
providers (i.e. insurance fraud) – how to avoid
Importance of Charity care Program
Benefits of being an OON Provider
* Higher Reimbursement Rate
* Don’t have to Work as Hard
Disadvantages of being an OON Provider
* Plans Don’t Accept AOB – Checks sent
to Patients
* Balance Billing Responsibility
* Lower Patient Volume
A common misconception in the medical and
insurance fields is that ERISA guidelines are the
enemy. It only seems that way because insurance
companies have tried to work around ERISA or have
simply ignored it. If you show them that you know
your rights and are not afraid of enforcing them, you
will be able to get more of your claims paid at a higher
reimbursement rate.
There are certain statutory rules and regulations ERISA plans
must follow when responding to claims and appeals:
“Adequate” notice in writing for denied claims, providing
“specific reasons,” the “specific plan provisions,” and a
description of any additional information needed to perfect the
claim. – 29 U.S.C. § 1133(1) and 29 C.F.R. § 2560.503-1(g) and (j)
– more on this later.

Opportunity for a “full and fair review” of the denial - 29 U.S.C.
§ 1133(2) – more on this later.

Timing of Benefit Determination
(Response to Claims)
 Benefit Determination must be provided by the Plan within 30 days
of receipt of claim submission for Group Health Plans or within 72
hours of receipt for urgent care claims and 15 days of receipt for preservice claims (this can vary depending on the plan) – 29 C.F.R. §
2560.503-1(f) and (h)
 If you received a medical necessity denial, you can request the
scientific explanation “applying the terms of the Plan to the claimant’s
medical circumstances” if it was not included in the denial - 29 C.F.R. §
2560.503-1(g) and (j)
 If claim involved urgent care, ERISA requires a “description of the
expedited review process applicable to such claims.” 29 C.F.R. §
2560.503-1(g)(2)
Timing of Notification of Benefit Determination on
Review
(Responses to Appeals)
• As a General Rule, notification of the Plan’s benefits determination must be provided
“not later than 60 days after receipt of the claimant’s request for review of the plan.”
29 C.F.R § 2560.503-1(i)(1) – except for special circumstances requiring extension of
time.
• For Group Health Plans, notification of the Plan’s benefit determination is as
follows:
Urgent Care Claims
Within 72 hours of receipt
Pre-Service Claims
Not later than 30 days of receipt
Post-Service Claims
Not later than 30 days of receipt
(a.) If Plan requires 1 appeal -- not later than 60 days after
receipt
(b.) If Plan requires 2 appeals – not later than 30 days after receipt
See 29 C.F.R § 2560.503-1(i)(2)
Manner and Content Rules
29 C.F.R 2560.503-1(j)(g)
o A Plan Administrator must provide the following:
1) Specific reason or reasons for the ABD
2) Reference to the specific plan provision on which the benefit determination was
based
3) Statement that claimant is entitled to receive, free of charge, “reasonable access
to and copies of all documents, records and other information relevant to the…
ABD”
4) A statement describing the Appeals procedure
5) For Group Health Plans,
(i) internal rules, guidelines and protocol if relied upon for ABD
(ii) if based upon medical necessity or experimental treatment,
explanation of “science or clinical judgment” used to make
ABD, applying terms of Plan.
*WAVIER OR ESTOPPEL??

ERISA actions are essentially breach of contract actions where
the court has to compare the plan benefits with the service
to determine if the benefits denied were properly excluded
from coverage under the plan.

The Court will determine whether or not the plan
administrator abused its discretion in making the Adverse
Claims Determination (whether the Plan Administrator acted
in an “Arbitrary and Capricious” manner). see Harlick v. Blue
Shield of California, 686 F.3d 699 (9th Cir 2012).

Factors Courts have considered in making a determination of
“arbitrary and capricious” (or abuse of discretion) are:

Where the Plan Administrator has a Conflict of Interest (where the same
entity makes the benefit determination and has responsibility for
payment of claim)

Inconsistent Reasons for a Denial

Failed to Provide Full Review of a Claim

Failed to Follow Proper Procedures in Denying the Claim
see Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir 2012)

The Court will conduct a “De Novo” Review
which means they will review the coverage
determination without considering or in any
way deferring to the Plan Administrator’s
Decision. They will make a decision on their
own by reviewing the Plan Documents.
Case Law
“The conclusory assertion that GHT was not ‘medically necessary’ was
insufficient to deny Weiners’ claim. See 29 C.F.R. § 2560.503-1(g)
(stating that a claim denial should set forth the ‘specific reason or
reasons for the adverse determination’ separate and apart from
‘reference to the specific plan provisions on which the determination is
based’).”
Weiner v. Health Net of Connecticut, 311 Fed.Appx. 438, 441 (2d Cir.
2009).
“A plan administrator may not fail to give a reason for a benefits denial
during the administrative process and then raise that reason for the first
time when the denial is challenged in federal court…”
Harlick v. Blue Shield of California, No. 10-15595, 17 (9th Cir. 2012).
Case Law (continued)
“The reason for this rule is apparent: we will not permit ERISA
claimants denied the timely and specific explanation to which
the law entitles them to be sandbagged by after-the-fact plan
interpretations devised for the purposes of litigation.” Flinders
v. Workforce Stabilization Plan of Phillips Petroleum Co., 491
F.3d 1180, 1191 (10th Cir. 2007).
“ERISA insurer bears burden of proof in demonstrating
applicability of exclusion. Farley v. Benefit Trust Ins. Co., 979
F.2d 653, 658 (8th Cir. 1992).
Everyone in this room has had their claim forms and appeals
completely ignored by insurance companies. If they do reply
(and deny/underpay your claim), the explanation is nonexistent or weak. While it may seem that the next logical
step is to re-submit or appeal again, the Courts have found
that insurance companies engaging in this behavior have
opened themselves up to litigation.*
* Before litigating, discuss your options with your attorney.
Most insurance policies require either one or two
levels of appeals before you can sue. To be on the safe
side, appeal denials and low payments at least twice.

That being said, if your appeals and claims are being
completely ignored, discuss going straight to litigation
with your lawyer. By failing to respond to your claims,
the insurance company has waived their right to decide
the claim on the merits (29 C.F.R. § 2560.503-1(l)).

Case Law
“[E]ven for timely denials on the merits, ‘it is an abuse of
discretion for ERISA plan administrators to render decisions
without any explanation.” Jebian v. Hewlett-Packard Co.
Employee, 349 F.3d 1098 (9th Cir. 2003) quoting Bendixen v.
Standard Ins. Co., 185 F.3d 939 (9th Cir. 1999).
Case Law (continued)
“In Nichols, after Prudential failed to timely issue a final decision on
Nichols’ appeal from a denial of benefits, she went directly to federal
court and sued her insurer under ERISA. We held that her claim was
‘deemed denied’ by Prudential’s inaction and that her administrative
remedies were exhausted by operation of law.” Strom v. Siegel Fenchel,
497 F.3d 234 (2d Cir. 2007) quoting Nichols v. Prudential Ins. Co., 406 F.3d
98 (2d Cir. 2005).
What Does That Mean for Me?
When claims are “deemed denied” or considered an “abuse of
discretion,” the courts review the claims de novo (from scratch), instead
of deferring to the insurance company’s decision. Also, the insurance
company has to prove that the denials were legitimate under the plan
policy… AND administrative remedies are deemed exhausted.
What Prevents Insurance Companies From
Retaliating Against My Patients and My Practice?
“It shall be unlawful for any person to discharge, fine, suspend, expel,
discipline, or discriminate against a participant or beneficiary for
exercising any right to which he is entitled under the provisions of an
employee benefit plan, this subchapter, section 1201 of this title, or the
Welfare and Pension Plans Disclosure Act [29 U.S.C. 301 et seq.], or for the
purpose of interfering with the attainment of any right to which such
participant may become entitled under the plan, this subchapter, or the
Welfare and Pension Plans Disclosure Act. “ 29 U.S.C. §1140
What is my Remedy?
Injunction Relief and Complaint to U.S. Department of Labor
“Except as provided in paragraphs (h) (3) and (h) (4) of this section the claims
procedures of a Plan will not be deemed to provide a claimant with a reasonable
opportunity for a “full and fair review” of a claim and adverse benefit determination
unless the claims procedure provides that a claimant shall be provided upon request
and free of charge, reasonable access to and copies of all documents, records, and
other information relevant to the claimant’s claim for benefits.”
29 C.F.R. §2560.503-1(h) (2) (iii) (emphasis added). “A document, record, or other
information will be considered “relevant” to a claimant’s claim if such document,
record, or other information:
(i) Was relied upon in making the benefit determination;
(ii) Was submitted, considered, or generated in the course of making the
benefit determination, without regard to whether such document, record,
or other information was relied upon in making the benefit determination;
(iii) Demonstrates compliance with the administrative processes and
safeguards required pursuant to paragraph (b) (5) of this section in making
the benefit determination; or
In addition, pursuant to 29 U.S.C.A. § 1021(a)(1) & (2)
and 29 U.S.C.A. §1024(b)(4), the administrator is
required to supply a participant or his/her designee with
the Summary Plan Description ("SPD") and, upon written
request.
Pursuant to 29 U.S.C.A. § 1132 (c), if an administrator
fails or refuses to comply with such a written request
within thirty days, the administrator could be held
personally liable to the participant in the amount of up
to $110 a day from the date of such failure or refusal.
Federal Courts have issued severe sanctions for noncompliance.
See Weddell v. Retirement Committee of the
Whirlpool Production Employees Retirement Plan,
No. 3:07-cv-0006, 2008 WL 343137 (N.D. Ohio,
Feb. 5, 2008)(plan administrator fined $14,000 by
DOL).
See also Glista v. Unum Life Ins Co of America, 378
F3d 113 (1st 2004)(court found that not disclosing
and disregarding an internal memo document was
powerful evidence of arbitrary and capricious
conduct by the plan administrator).
Summary
 Insurance companies are held to a very high standard under ERISA.
 They have not been living up to those standards, in part because they do not
think you know any better.
 Submit your claims and appeals on time and keep track of insurance
companies responses (keep copies of all insurance company responses).
 Make sure when you are submitting appeal letters that you mention that you
know your rights and their responsibilities (keep copies of all appeal letters).
 Do not be afraid to include statute and case law in your letters. This lets
insurance companies know that you are serious, and you know your rights.
 When they still refuse to follow the law, consult an attorney about enforcing
your rights.
Please don’t hesitate to contact us
with questions
Thomas J. Force, President
The Patriot Group
(631) 665-1880 Ext. 7
TForce@ patriotcompli.com
Thomas J. Force, Esq.
The Force Law Firm, PC
(631) 665-1832 Ext. 5
[email protected]

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