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Maximal Healthcare Claim Reimbursement
through ERISA Compliance

 

ERISAclaim.com provides unique and unprecedented certification programs for health-care ERISA claims denials and appeals through ERISA compliance in assisting  healthcare providers, physicians, clinics and hospitals in their business survival from reimbursement crisis.

 

Federal Law, ERISA, regulates and governs approximately 80% of U.S. health-care claims and 60% of national health-care expenditures, while in past two decades medical coders, billers and reimbursement managers or staffs are historically and practically clueless about this ERISA statutory and regulatory superpower for their business survival and development, and no ERISA educations or trainings have been received by entire reimbursement industry, because there isn't anyone available, not even one book or resource out there practically and meaningfully  available on this most important legal subject in health-care reimbursement business and industry.

 

Licensing of ERISA-Covered Benefit Plan Administrator, New York State Insurance Department, January 26, 2000

 

Letter opinion per CIC §12921.9 : Discretionary Clauses, (PDF) John Garamendi, Insurance Commissioner, DEPARTMENT OF INSURANCE, STATE OF CALIFORNIA, February 26, 2004

More than 70% of healthcare claims denied or delayed each year were not because of coding or billing errors or disputes, but due to non-coding and non-billing related reasons, such as policy exclusion, medical necessity/utilization reviews, pre-existing exclusions, pre-certification, prior-authorization, PPO bundling and downcoding and "unknown" or unexplained reasons. Yet all denials and delays were handled by coding and billing staffs, while up to 80% of healthcare claims are ERISA claims and these coding and billing staffs have no training and knowledge in ERISA, coverage dispute, appeal procedures. No one seems to know what to do, but do whatever they felt need to be done - going circles and frustrations every day.

Coding and billing are less than half of the successful reimbursement practice, coding and billing are not appealing and coverage dispute practice. Many coders and billers are wonderful, non-confrontational and very sophisticated individuals, but they might be terrible and counterproductive debaters, and less than ideal legal reasoning and logical thinkers. Many financial executives are hands-free managers in reimbursement divisions.

 

The latest Harvard & RAND study for Congress and state legislative debate on Patients' Bills of Rights, conducted by David Studdert and Carole Roan Gresenz, study authors from the Harvard School of Public Health and RAND, funded by federal government, Department Of Labor, and Agency for Health Care Research and Quality, revealed that "little is publicly known about such appeals system", and concluded that "A majority of preservice appeals disputed choice of provider or contractual coverage issues, rather than medical necessity. Medical necessity disputes proliferate not around life-saving treatments but in areas of societal uncertainty about the legitimate boundaries of insurance coverage. Greater transparency about the coverage status of specific services, through more precise contractual language and consumer education about benefits limitations, may help to avoid a large proportion of disputes in managed care."

 

A JAMA Editorial commenting this study further supported the conclusion of this study and advanced the right solutions more precisely at New ERISA Claim Regulations: "Regulations issued by the Clinton administration in 2000 were designed to infuse rigor into the appeals process maintained by employer-sponsored health plans covered by the Employee Retirement Income Security Act (ERISA),¹⁰ which governs insurance arrangements for more than 150 million workers and their family members. Whether these rules will be vigorously enforced remains to be seen."

 

The updated Harvard & RAND study, funded by the U.S. Department of Labor (DOL), published on June 18, 2003 through Health Affairs, examined the outcomes of nearly a half-million coverage requests in two large medical groups that contract with health plans to deliver care and conduct utilization review, and discovered the urgency and necessity of expertise of ERISA claim procedure specialists. The study concludes the following in its summary and policy implications:  "....We found much higher denial rates than those previously reported.....Denials made on contractual grounds—the largest share of denials—may call for both clinical and contractual expertise. Hence, they should ideally be made by personnel who are versant in both areas. There was some evidence of this sort of dual expertise being brought to bear on coverage decisions at the two groups we studied."

 

Reasons for Denial Prospectively (RAND/Harvard Study Fund by DOL)
Not a Contractually Covered Services  (Policy Exclusion)	42%
Not medically necessary	29%
Provider Choice (Out Of Network)	22%
Other/unknown	7%
"Prospective denials of coverage on grounds of medical necessity are only a small part of the overall picture." “Retrospective requests were nearly four times more likely than prospective ones were to be denied” "Denials made on contractual grounds—the largest share of denials—may call for both clinical and contractual expertise. Hence, they should ideally be made by personnel who are versant in both areas".

 

"......In this environment, contractual coverage and medical-necessity issues that persist are likely to be for services that enrollees feel especially strongly about. Such consumer concerns, together with ongoing consumer protection agendas that include reforms such as guaranteed external review and right-to-sue provisions, mean that the policy importance of UR denials in managed care is unlikely to wane in the foreseeable future."

 

However these best experts "hired" by Congress and federal government are one step away from the complete discovery and solution. Let us fill in the missing links and connect dots in order to save our health-care system from collapsing and crisis.

 

First, we identify the controlling force and power in contractual policy coverage denial. The majority of Americans are covered under the employer-sponsored health-care programs in private sectors under ERISA, 80% of the claims and 60% of health expenditures are regulated under ERISA. Each individual ERISA plan offers different coverage and benefits, either self-insured or fully-insured through purchase of insurance from an insurance company. The controlling and governing document for each ERISA plan is Summary Plan Description (SPD), the rule of the game for interpreting each SPD and resolving the disputes on contractual denials is ERISA claims procedure regulations. Therefore the experts from Harvard & Rand study group discovered the importance and necessity of "contractual expertise" but aborted the solution of "contractual expertise" due to "the reasons of size or financial stress, this may be beyond the reach of smaller medical groups that have assumed responsibility for UR".

 

Financial burden and unavailability of this contractual expertise could be the final resolution to their study group to determine if those contractual denials were made by the plan or TPA correctly.

Clinical knowledge and expertise from those medical groups are inherited, but "contractual expertise" is missing badly for policy coverage, Summary Plan Description (SPD) and ERISA Claims Procedure for 80% of health care claims, because such ERISA contractual expertise is nowhere to be found, even for those very experienced health care attorneys and insurance coverage experts, as state law governed insurance policy dispute resolution and ERISA governed claims procedure dispute resolution are quite different, and entire country has never put ERISA into health-care practice. This is why our health-care system failed.

 

Another new Rand/Harvard study published on February 2004 issue of Annals of Emergency Medicine, "Disputes over coverage of emergency department services: A study of two health maintenance organizations" discovered that 90% of denial in utilization reviews were overturned on appeals, from a stratified random sample of approximately 3,500 appeals of coverage denials lodged by privately insured enrollees between 1998 and 2000 at 2 of the nation's largest HMOs. This study concludes: "The prevalence of ED cases among all appeals reflects disagreement between lay and expert judgments about what constitutes emergency care under the prudent layperson standard. The high rate at which enrollees win these appeals highlights significant disagreement in interpretation of the standard among different adjudicators within managed care organizations (medical groups and health plans). When enrollees fail to challenge denials that would be reversed on appeal, they bear the financial brunt of ambiguities in interpretation of the prudent layperson standard."

 

This new Rand/Harvard study warns that "Although the end result for consumers is the same in each of these cases, the messages sent by plans to consumers and medical groups are not. Goodwill payments imply inappropriate use of the ED (notwithstanding the fact that actual merit might not have been assessed). Merit-based overturns, on the other hand, signal an error in utilization review and instruct medical groups about the proper limits of coverage, instructions that medical groups cannot ignore because they must meet the cost of these claims. Hence, merit-based overturns perform a valuable signaling function, akin to the role of judicial precedent in the law. Unless plans invest additional effort in educating utilization reviewers about erroneous decisions for which they are not held financially accountable, goodwill payments of potentially meritorious cases limit opportunities to forge consensus about the limits of the prudent layperson standard and to disseminate accumulated knowledge about its meaning."

 

"Prudent Layperson" Laws Do Not Increase Inappropriate ED Visits (Reuters via Medscape; one-time registration required)

"However, some compliance problems did emerge. Some insurers, Hall told Reuters Health, initially deny ED claims and then "quickly reverse" their decision if challenged.

 

"There are two take-home messages for health professionals," Hall said. "One, insurers much less often question the appropriateness of emergency services and two, if insurers initially deny coverage for emergency care, providers or patients should appeal."

The impact and enforcement of prudent layperson laws (Mark A. Hall, JD, Annals of Emergency Medicine Online, May 2004 • Volume 43 • Number 5)

[ABSTRACT]  [FULL TEXT] [ PDF]

Importantly, ERISA claim regulation and definition of "claim involving urgent care", 29CFR2560.503-1 (m)(1) - Claims Procedure, has provided governing solutions to "disagreement between lay and expert judgments about what constitutes emergency care under the prudent layperson standard." for these privately insured enrollees. And "Unless plans invest additional effort in educating utilization reviewers about erroneous decisions for which they are not held financially accountable," and ERISA claim regulation and  definition of "claim involving urgent care'', goodwill solution will result in backslash for more disasters in Emergency Department across the country.

 

If 80% of the health-care claim and 60% of health expenditures are governed and regulated by ERISA, ERISA plan's "insurance policy" is controlled by each plan's Summary Plan Description (SPD), and each claim dispute is resolved under ERISA claims procedure regulations, such "contractual expertise", called for by our Rand/Harvard experts, must be from ERISA claim procedure specialists.

Therefore, it is absolutely clear that our nation must provide a solution to health-care crisis by urgently establishing an industry or profession that will possess not only clinical expertise but also, and more importantly, ERISA contractual expertise, ERISA claim procedure expertise.

 

These valuable studies have pointed out the direction but failed to provide a turnkey practical solution.

 

Both Aetna and CIGNA have agreed to settle the class-action lawsuits by 950,000 physicians and agreed to process appeals in accordance with ERISA claim regulations for both ERISA claims and non-ERISA claims, and to establish external review boards for Billing and Coding Disputes, Medical Necessity Disputes and Policy Coverage Disputes, in compliance with state external review laws, however external reviews will not be available until internal appeals/ERISA appeals are completely exhausted.

All other 8 major insurance companies named in class-action lawsuits have refused to settle, even if federal court would rule for physicians, the Aetna and CIGNA settlements will be "as good as it could get" from the rest of insurers and MCO's as evidenced in Aetna and CIGNA settlements with physicians.

Unless physicians understand and complete ERISA internal appeals, all of those "a love fest" and "victories" from class-action settlements would mean a fantasy of "a love fest"  to any physicians.

 

A striking parallel phenomena is also true in the insurance and benefits industry, as described above for medical coding and billing personnel. With the industry compliance tips for the insurance/benefits industry, offered through AAHP in complying with new federal claim regulation, reflected the same problems but provided no practical solutions, the industry is strategically revising the rules of claim processors: "We're taking the claims processors out of the loop. They're good at what they do, but they definitely aren't lawyers. We don't necessarily want them to be making discretionary decisions", said James L. Touse, vice president and associate general counsel for BlueCross BlueShield of Tennessee, at a 2002 policy conference sponsored by the American Association of Health Plans.

 

That is why, starting January 1, 2003, Aetna and any other insurance companies/ERISA plans have come up with a brand-new programs,  Appeals Administration Services program, parallel to our certification program, in response to this new ERISA Storm, Real Protections for Health-care Providers and Patients, while health-care providers nationwide are still in sleeping mode pursuing moon project of protections through recycling, reinventing and salvaging the ERISA storm and protection as a result of 28 year ERISA health-care crisis and refinery process.

 

From medical coders and billers & insurance claim processors to lawyers for physicians and insurance companies, the occupational and professional gap is a vacuum and too huge to be ignored by both insurance industry and health-care provider industry. A new occupation or profession has to be developed to handle such huge crisis: ERISA health-care Claim Specialists and Department, to bridge the gap FROM medical coders and billers & insurance claim processors TO lawyers.

 

Any traditional and conventional appeals without ERISA COMPLIANCE are "squeaky wheel appeals" for any ERISA claim denials and delays, 80 percent of U.S. Healthcare claims and 60% of U.S. Healthcare expenditure.

Only appeals with full ERISA compliance will ensure maximum reimbursement or crisis turnaround at minimum cost and frustrations.

 

NEW Utah State law Mandates ERISA Claim Regulation (Copyright © 2004 by Jin Zhou,  ERISAclaim.com) Did you know that,  effect on March 1, 2004, a NEW Utah State law, UT Admin Code R590-203. Health Grievance Review Process and Disability Claims., has mandated every health insurer and HMO conducting business in the State of Utah to comply with ERISA claim regulation, regardless if the plan is actually an ERISA plan? This is the first state law for health insurance and manage care that mandates and clones ERISA claim regulation at state-level. More and more states are expected to follow. UT Admin Code R590-203. Health Grievance Review Process and Disability Claims. "R590-203-2. Purpose. The purpose of this rule is to ensure that health insurer's grievance review procedures for individual and employer health benefit plans comply with the Department of Labor, Pension and Welfare Benefits Administration Rules and Regulations for Administration and Enforcement: Claims Procedure, 29 CFR 2560.503-1, Utah Code Sections 31A-4-116 and 31A-22-629."   (Bulletin) (Utah Code Section 31A-22-629)

 

Aetna (DOL/ERISA) and Blue Cross Blue Shield are ready to comply with new federal regulation(BCBSIL) (BCBSMI) (BCBSCNY) (BCBSNE) (CareFirstBCBS) & (BCBSAL),  are you ready to get paid faster and fairer?

From Aetna's ERISA yesterday (Aetna Video Shows ERISA Patients Mistreated) to Aetna's ERISA today (DOL/ERISA) = Aetna ERISA Actions or intention in compliance and in control.

From AMA's ERISA yesterday (The latest Harvard & RAND study) to AMA's ERISA today (JAMA Editorial) = ERISA Actions or Not?

That's why physicians, healthcare providers and hospitals must wake up on ERISA now!

 

"Congress library report", "Minneapolis memorandum" and "Phoenix memorandum" should have been sufficient intelligence for executive decision-making on health-care Oct. 11 fact card.

 

In today's progressively worsening health-care and budget crisis since World War II, any health-care executive strategy, without mastering or complying with ERISA, has been proven failing since inception of managed care practice, unless a new health-care reimbursement and compliance model is established and implemented to immediately create a new line of ERISA reimbursement personnels and occupation, "ERISA Healthcare Claim Appeals and Reimbursement Specialists and Departments", no one in this country can stop and survive our failing health care system crisis.

 

After a one year delay, New Federal Benefit Claims Procedure Regulation has become effective January 01, 2003 for almost all of the private group health plans. It will affect about 80% of health-care claims or 60% of health expenditures, approximately 6 million private health and welfare plans and approximately 150 Million Workers and their dependents  in the U. S..

 

Contrary to the popular belief, the regulation provides more protections for physicians and patients than state insurance and Prompt Pay Laws, and more protections and clarifications for insurance companies and the ERISA plan sponsors as well as the third party benefits administrators than state laws in punitive damages as proposed in Patients Bill Of Rights.

 

"Forty states required individuals to first exhaust their health policy’s internal appeals and grievance process before seeking external review." (GAO, September 2003, Page 46)  The health policy’s internal appeals and grievance process = ERISA appeals 80% of the time.

 

The Latest AMA (PSA) Managed Care Hassles Survey through nationwide state medical associations and national medical specialty societies identified the most popular and important managed-care claim denials and delays.

 

Top Seven Issues through National Medical Specialty Societies
Rank	Problems Reported By Popularity Rank	%
1	Bundling	67%
2	Medical Necessity Decision Denials	43%
3	Prompt Payment	43%
4	Administrative Hassles	33%
5	Coding Issues	24%
6	Downcoding	19%
7	Bargaining Lack of Negotiation Power	14%

Top Eight Most Importantly & Frequently Listed Issues through State Medical Associations
Rank	Problems Reported By Importance Rank
1	Downcoding & Bundling
2	Prompt Payment
3	Lack of Budgeting Power
4	Medical Necessity Denials
5	Prior Authorization of Med. Services
6	Health Plan Credentialing
7	Drug Formularies
8	Other

 

Any reimbursement strategy will be incomplete under current ERISA statutory and managed care environment unless ERISA appeal division and specialists are included in your reimbursement practice, as important as billers and coders, office manager, and consumer account manager, or even CFO's were initially included in your business and industry.

 

Who Can Be a Medical Reviewer under ERISA? (Copyright © 2004 by Jin Zhou,  ERISAclaim.com) U.S. SUPREME COURT Docket for 03-83  ORAL ARGUMENT TRANSCRIPTS (page 46 0f 49)   02-1845. Aetna Health Inc. v. Davila 03/23/04 "QUESTION: Mr. Estrada, you can address what you would like but there are three points that have come up during the Respondent's presentation that I'd be interested with a response to. Number one, is it true that the people who make the decisions for your client must be medical doctors in Texas? MR. ESTRADA: Well it is true by virtue of DOL regulations which provide that no claim may be turned down without input from a medical professional in the relevant area"

New Federal Claim Regulation (Final Rule) "Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)] "The term `health care professional' means a physician or other health care professional licensed, accredited, or certified to perform specified health services consistent with State law." [page 70271 CFR § 2560.503-1(m)(7)]     "medical doctors in Texas" = MD licensed to practice medicine in Texas for a Texas ERISA case; "a medical professional in the relevant area" = relevant area of state laws in license jurisdiction, scope of practice and relevant local standard of care; "licensed" = licensed by the State Government/licensing board; "to perform" = to practice medicine or health care services in the State; "specified health services" = medical procedures or services being reviewed or denied, instead of file review or insurance coverage reviews services; "consistent with State law" = consistent with State laws where  the health care professional is legally licensed to practice medicine or health care services with respect to state jurisdictions,  scope of license and state local medical standard of care. "The term `health care professional' means, in layman term,  a physician or other health care professional who is at least licensed in your state (and more, board certified too) to practice the specified/specific health services being reviewed or denied of your claims, consistent with your state law jurisdiction, scope of practice and local medical standard of care. Someone who is not licensed to practice the same health care services specified/denied in your claims is not qualified as an "appropriate health care professionals" as defined under ERISA § 2560.503-1(m)(7). Someone who is not licensed in your state to practice "specified health services" but who is merely registered under state or other means (URAC, IME, SSD or Peer Reviews) to do Utilization Reviews (UR) is not qualified as an "appropriate health care professionals" as defined under ERISA § 2560.503-1(m)(7).       U.S. Supreme Court visited ERISAclaim.com in regard to ERISA § 2560.503-1(h) at 11:57:03 AM on Friday, November 21, 2003 for this No. one point. Click here for more coverage of Supreme Court Visiting at ERISAClaim.com.

 

 

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