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Appeal for Downcoding & Bundling Denials

What You Should Know about Filing Your Health Benefits Claim

New Federal Claim Regulation, effective January 1, 2003, is the best and the most powerful protection for improper medical necessity denials:

Plan must disclose all the "secrets" under new definitions of relevant documents with better disclosure obligations, no more medical necessity secrets, UCR fee schedules & Bundling/Downcoding are no longer confidential. [Page 70252 & 70271, CFR § 2560.503-1(m)(8)  (DOL FAQ B-5, C17)]

Bundling And Down Coding, How To Fight Against Our Nation’s No. 1, The Most Important And Popular, Medical Claim Partial Denials?

© Jin Zhou,  ERISAclaim.com

Managed-Care Bundling And Down Coding Denial & Crisis? What Does an Unanimous US Supreme Court Say?

On June 21, 2004, an unanimous US Supreme Court ruled that claim processing (bundling and down-coding as partial benefits determination & denials, DOL FAQ C12)  and denials of benefits under the employer-sponsored health plans, ERISA-regulated benefit plans, for both self-insured and fully-insured (through purchase of insurance) health plans, are completely governed by federal law ERISA, that supersedes and invalidates state laws.

ERISAclaim.com: "employer-sponsored group health plans" = "ERISA-regulated benefit plans", both self-insured and fully-insured (through purchase of insurance) health plans, (ERISA - Title 29, Chapter 18.  Sec. 1002.)

           I.     Bundling & Down Coding Claim Partial Denials Are Identified As The Number One And The Most Important And Popular Managed Care Hassles By AMA (PSA) Through Nationwide State Medical Associations And Medical Specialty Societies

II.              Solutions by AMA?

After extensive explanations of corrective coding initiative and exercising CPT editorial muscles and conclusion of national survey of downcoding and bundling as the most important and popular claim partial denials, AMA offered, through its web site and a free guide, the following solutions (on page 9 of AMA free guide):

1. To appeal the claim denials and document all communications with insurer, referenced on “squeaky wheel theory” without practical instructions;
2. To notify state, county and national medical societies and associations for advocacy strategies;
3. To complete online AMA Health Plan Complaint Form.

“If a claim is filed correctly and the health insurer inappropriately bundles or downcodes, the physician should attempt to appeal the claim, by putting in writing a clinical justification for the appeal. The practice should document all communication with the insurer. While appealing claims obviously adds another administrative burden to the practice, there is a large element of truth in the “squeaky wheel” theory: an individual physician who is persistent, has good documentation, and is logically persuasive stands a better chance at succeeding than a physician who does nothing.3

The physician also should notify the relevant state and county medical associations and the relevant national medical specialty society. Those entities can then determine how widespread the problem is, and, if it is widespread, work with the AMA to develop an advocacy strategy. Finally, physicians should complete the AMA Health Plan Complaint Form, which can be accessed at www.ama-assn.org/go/psa. That information will be used to determine prevalence of these practices.” (© 2002, American Medical Association)

Apparently and practically, bundling and down coding partial claim denials remain to be the most popular and important healthcare claim partial denials in the U.S..

Healthcare providers nationwide are left without sufficient understanding and effective appeal solutions in accordance with governing laws and regulations for bundling and downcoding partial claim denials.

After years  of frustration and struggling without practical solutions from national medical societies, state governments and federal government as well as state and federal courts, 950,000 physicians nationwide filed unprecedented lawsuits in class actions against more than 19 health insurers and managed-care organizations in federal court and state courts throughout the country.

Contrary to the popular understanding and healthcare expert's assertion that ERISA doesn't provide for managed care "bundling and downcoding" partial denial protections as state law does, ERISA  statutorily prescribes the regulatory appeal process for "bundling and downcoding" partial denial violations.

United States Supreme Court unanimously ordered on May 27, 2003 in BLACK & DECKER DISABILITY PLAN v. NORD that DOL FAQ (Benefit Claims Procedure Regulation), available on DOL web site, is the view of the Supreme Court and must be followed:

"It is the Secretary of Labor’s view that ERISA is best served by “preserv[ing] the greatest flexibility possible for . . . operating claims processing systems consistent with the prudent administration of a plan.” Department of Labor, Employee Benefits Security Administration, http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html, Question B–4 (as visited May 6, 2003) (available in Clerk of Court’s case file). Deference is due that view." (Bold and underline added) Black & Decker Disability Plan v. Nord , U.S. Supreme Court, Decided 05/27/2003

      ERISA claim regulation compliance and enforcement will largely fix "bundling and downcoding" violations and crisis in U.S. healthcare delivery system.

III.            Class Actions by 950,000 Physicians and U.S. Supreme Court Ruling in PACIFICARE HEALTH SYSTEMS, INC. v. BOOK

After gaining preliminary victory on class certification for healthcare providers and losing class certification for patients tract claim, health insurers and managed-care organizations appealed to the United States Supreme Court.  Health insurers and managed-care organizations argued that healthcare providers’ claims must complete arbitration in accordance with managed-care contract signed by providers before proceeding to federal court, and U.S. Supreme Court agreed with health insurers and managed-care organizations in PACIFICARE HEALTH SYSTEMS, INC. v. BOOK.  Although Aetna has settled with healthcare providers, most insurers and managed-care organizations have refused to settle or to  admit wrongdoings, and managed-care bundling and downcoding partial claim denial continued as business usual without any sign of slowing down.

After U.S. Supreme Court ruling in PACIFICARE HEALTH SYSTEMS, INC. v. BOOK , health insurers and managed-care organizations survived last threat from physicians and medical associations nationwide.