October 4, 2012

Using ERISA to Get Your Claims Paid

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The Employee Retirement Income Security Act (ERISA) has been viewed as both a blessing and a curse in the medical insurance industry. While there are many drawbacks and ambiguities associated with this statute, providers can and should use it to their benefit. If your patient plan is self-insured (about 60 percent are), ERISA and its corresponding federal regulations contain many hidden gems that can help get your claims paid.

Some questions to consider:

  • Is the insurance company paying your claims within the 45-day time limit?
    • Insurance companies legally (and often contractually) are obligated to pay claims within 45 days, or to deny them within 30 days.
    • Look over your old EOBs denying payment. Were these sent within 30 days of when you submitted the associated claims?
  • Are your adverse benefit determinations as thorough as they should be?
    • Did the insurer provide a specific reason for the denial?
      • Did the insurer include the specific plan provision or guideline it used?
      • For medical necessity denials, did the insurer provide specific scientific reasoning or the credentials of the person who reviewed the claim?
    • Were your appeal rights explained?
  • Did they respond to your appeals?
    • The insurer’s response needs to be timely (typically within 30 days).
    • They need to tell you exactly why they are denying your appeal and explain your next steps.
    • If the appeal challenges a ruling of lack of medical necessity, the insurer has to provide an explanation of the scientific or clinical judgment used to make the determination, and the healthcare professional consulted by the insurer must have “appropriate training and experience in the field of medicine” and be “involved in the medical judgment.”
    • If an internal rule, protocol or guideline is followed by the insurer, it must be provided free of charge.
    • The insurer must provide, also free of charge, reasonable access to documents and information used in making the appeals determination.

OK, so the insurance company did not comply with ERISA – so what? If the insurance company is breaching its contract with a patient and refusing to follow federal law, you have just gained leverage.

In both the legal and medical worlds, there’s a concept known as “waiver.” When the insurance company fails to protect its rights, it waives them. Federal regulations allow you to sue immediately if an insurance company doesn’t follow claims procedures.

As a beneficiary to the patient plan, under ERISA you can file a lawsuit for “benefits due under the plan” and “pursue any available remedies under Section 502(a) of the act on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim.”

ERISA also allows you to recover attorney’s fees if you are moderately successful. However, make sure you exhaust administrative remedies (i.e. file a written first-level appeal and a written second-level appeal, if required under the health plan). Failure to exhaust administrative remedies could preclude you from suing the insurer under the plan.

If you do not want to sue, you still have options. As you have all noticed, insurance companies often do not want to reveal their carefully guarded fee schedules and policies. Insurance companies also often assume that you do not know the law, and they often try to keep it that way. Insurance members and beneficiaries are entitled to a copy of the summary plan description and any other documents used to make claim determinations. So when your appeals are filed (and you should appeal every inappropriate payment and denial), point out to them that you know your rights. If they realize that you know what they legally and contractually are obligated to do, they often back down.

You can beat insurance companies at their own game. You just have to know the rules.

About the Author

Thomas J. Force, Esq. is a nationally recognized expert in revenue collection techniques, managed-care contracting and appeal strategies. He is the founder, president and chairman of the board of The Patriot Group in New York. As a state- and federally licensed attorney in both New Jersey and New York, Mr. Force has more than 21 years of experience in the healthcare and insurance industries. His success as a Wall Street insurance litigator and his tenure as general counsel for a New York-based accident and health insurance company where he served as chief compliance officer propelled the founding of The Patriot Group. He is co-founder of the Healthcare Reimbursement Attorneys Network, a national association of attorneys who represent physicians and hospital clients. Mr. Force also works closely with the American Medical Association and various state medical associations.

Contact the Author

TForce@patriotcompli.com

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