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New Federal Health Claims & Appeals Laws & Regulations

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Effective 09-23-2010

©2010, Jin Zhou, ERISAclaim.com

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Appeals  for Commonly Seen Medical Claim Denials
with
Superpower & Protections from
Compliance with Federal (ERISA) &
State Laws (Utilization & External Reviews)

 

Managed-Care Medical Necessity Denials? What Does an Unanimous US Supreme Court Say?

 

On June 21, 2004, an unanimous US Supreme Court ruled that claim processing (medical judgment &  benefits determination)  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.)

 

ERISAclaim.com - Supreme Court Managed Care ERISA Watch

Aetna Health Inc. v. Davila

06/21/04

Opinion of the Court

 

"Held: Respondents’ state causes of action fall within ERISA§502(a)(1)(B), and are therefore completely pre-empted by ERISA §502 and removable to federal court. Pp. 4–20."

 

"We hold that respondents’ causes of action, brought to remedy only the denial of benefits under ERISA-regulated benefit plans, fall within the scope of, and are completely pre-empted by, ERISA §502(a)(1)(B), and thus removable to federal district court. The judgment of the Court of Appeals is reversed, and the cases are remanded for further proceedings consistent with this opinion.7 It is so ordered."

 

 

ERISAclaim.com - Supreme Court Managed Care ERISA Watch

 

RUSH PRUDENTIAL HMO, INC. v. MORAN

“In contrast, the review here may settle a benefit claim’s fate, but the state statute does not enlarge the claim beyond the benefits available in any §1132(a) action. And although the reviewer’s determination would presumably replace the HMO’s as to what is medically necessary, the ultimate relief available would still be what ERISA authorizes in a §1132(a) suit for benefits. ……

 

The independent reviewer has no free-ranging power to construe contract terms, but instead confines review to the single phrase “medically necessary.” That reviewer must be a physician with credentials similar to those of the primary care physician and is expected to exercise independent medical judgment, based on medical records submitted by the parties, in deciding what medical necessity requires. This process does not resemble either contract interpretation or evidentiary litigation before a neutral arbiter as much as it looks like the practice of obtaining a second opinion.
 

ERISAclaim.com Note:

 

Medical Necessity Reviews Under State Laws & PPO Contract

 

Independent Medical Reviews, Utilization Reviews, and PPO Audits Medical Necessity Reviews, PPO's P4P (Pay for Performance Review per PPO Contract) under state laws or private contracts can only decide medical necessity, or “confines review to the single phrase “medically necessary.”, and plan administrator or fiduciary must decide coverage for benefits on claims in accordance with ERISA regulation and each individual plan documents– money for reimbursement as a final decision. Medical reviewers can NOT make final decisions on claim payments.

 

 

 

 

 

 

Breaking News

950,000 MD's Settled With Aetna & Cigna on ERISA

 

Appeal Letter for Plan/Policy Exclusion,

Specific Procedure Exclusion

 

 

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:

 

  1. "Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)]

  2. "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)]  

  3. A Full and Fair Review with new definitions and protection requires De Dovo reviews on two appeals by at least four (4) different people, two (2) different fiduciaries with ERISA plan, and two (2) different Health-care professionals independent to the ERISA plan. [Page 70252-70253, 70268-70269, CFR § 2560.503-1(h)(3)]

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

 

Relying on New Claims Regulations, Court Orders Plan Insurer to Produce Additional Information to Claimant

(Employee Benefits Institute of America, EBIA)
Cannon v. UNUM Life Ins. Co., 2004 U.S. Dist. LEXIS 835 (D. Me. 2004) (PDF)

 

"ERISA places the burden of proving an exclusion from coverage in an ERISA-regulated welfare plan on the plan administrator." Rosalyn Caffey v. Unum Life Insurance Co

 

Benefit Denial Overruled Because Plan Failed to Consult Medical Expert About Benefit Appeal (Employee Benefits Institute of America (EBIA))

 

Is Utilization Review Practice a Medical Decision-making?

 

Is Practice of Utilization Review Performed "Independently" or under Insurer/ERISA Plan's UR Registration or Legal Authority?


CICIO v VYTRA HEALTHCARE

LAND v CIGNA HEALTHCARE OF FLORIDA

 

DOJ: Criminal Resource Manual 2432 Coercive or Fraudulent Interference with ERISA Rights -- 29 U.S.C. 1141

2432 Coercive or Fraudulent Interference with ERISA Rights -- 29 U.S.C. 1141

Title 29 U.S.C. § 1141 states:

 

"It shall be unlawful for any person through the use of fraud, force, violence, or threat of the use of force or violence, to restrain, coerce, intimidate, or attempt to restrain, coerce, or intimidate any participant or beneficiary for the purpose of interfering with or preventing the exercise of any right to which he is or may become entitled under the plan, this title, section 3001, or the Welfare and Pension Plans Disclosure Act. Any person who willfully violates this section shall be fined $10,000 or imprisoned for not more than one year, or both. The amount of fine is governed by 18 U.S.C. § 3571. The U.S. Sentencing Guidelines address 29 U.S.C. § 1141 under the guidelines for "Fraud and Deceit" (U.S.S.G. § 2F1.1) or for "Extortion by Force or Threat of Injury or Serious Damage (U.S.S.G. § 2B3.2)......"

 

"For example, Section 1141 would reach the use of deception directed at misleading a welfare plan beneficiary as to the amount of health benefits owed to the beneficiary under the terms of the plan or at misleading a pension plan participant as to the amount of retirement benefits to which he would become entitled under the plan upon his retirement."

 

ERISA in the United States Code

ERISA 510 29 USC 1140 Interference with protected rights.
ERISA 511 29 USC 1141 Coercive interference.

 

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Department of Law
120 Broadway
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Department of Law
The State Capitol
Albany, NY 12224

 
 
For More Information:
518-473-5525
For Immediate Release 
February 10, 2005

"Attorney General Eliot Spitzer said today that 21 health plans operating in New York have agreed to take new steps to ensure that consumers have the information they need to intelligently shop for health coverage and obtain medically necessary care.

 

Under the agreements, the health plans have pledged to be more responsive to requests from consumers for so-called "clinical review criteria," which is used to determine whether health care claims will be covered. In the past, health plans have sometimes failed to disclose these criteria and other essential coverage information, discouraging access to needed care......

 

The clinical review criteria are extremely important to consumers with existing medical conditions because they contain the standards that the health plans use to determine whether a specific treatment is medically necessary; if not, coverage is denied and the consumer is left with the choice of either foregoing medical care or paying out-of-pocket. The State Managed Care Consumer Bill of Rights requires health plans to disclose these criteria to both current and prospective enrollees upon written request....."

 

02/10/05 Health Plans Agree to Provide Required Coverage Information (click for complete official press release)

 

NEW YORK HEALTH PLANS PARTICIPATING IN SETTLEMENT


Aetna US Healthcare
Atlantis Health Plan
Capital District Physicians' Health Plan (CDPHP)
CIGNA Healthcare of New York
ConnectiCare of New York
Empire HealthChoice
Excellus Health Plan
Group Health Inc. (GHI)
HealthFirst New York
Health Insurance Plan of Greater New York (HIP)
Health Net of New York
HealthNow New York
Horizon Healthcare of New York
Independent Health Association
MDNY Healthcare
MVP Health Plan
Oxford Health Plans of New York
Preferred Care
United Healthcare of New York
Vytra Health Plans
WellCare of New York

 

Attachment:

  • New York Managed Care Consumer Bill of Rights Compliance Survey
  •  

    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)

    1. "Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)]

    2. "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.

     

     

    ERISA Failure Syndrome

    U.S. Healthcare Crisis Trilogy

    (Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

     

    ERISA
    Medical Killing
    ERISA
    Medical Inflation
    ERISA
    Insurance Robbery
    "Health Insurance Challenges: Buyer Beware" 3-3-04
Hearing, Senate Committee on Finance

    Read Making a Killing

    ?

     

    ?

    Bar graph showing trends in hospital charges and revenues in California from 1995-2002

     

     

     

     

     

     

     

     

     

     

     

    ?

     

    ?

    GAO-04-312

    ?
    ?

    American Job ExportING!

    Mass layoffs up in January 2004

    Weirton Steel cancels 10,000

    GM: $67.5 billion in 2003

    One Nation under Debt: U..S. economy threatened by aging of America

     

    Healthcare Disaster at Fault Verdict Index:

    U.S. Government 30%

    U.S. Employers & Insurers 30%

    Healthcare Providers 30%

    Consumers 10%

    (ERISA Failure + Managed-Care) Destroyed US Healthcare
    (ERISA Failure + Managed-Care + HSA) Invite US Federal Budget Deficit & Social Security Disasters = 100X 9/11 Attacks

     

    GAO: Current and Emerging Fiscal and Retirement Security Challenges, American Benefits Council/MetLife Conference, Washington, DC, on January 14, 2005

    1. Rising Health care Costs Have Many Implications (Direct)

    2. Rising Healthcare Costs Have Many Implications (Indirect)

     

    Rx-1  $$$$$$$$$ERISA"Health Insurance Challenges: Buyer Beware" 3-3-04
Hearing, Senate Committee on Finance
$$$$$$$$$$  Rx-2

     

    Appeal Letter for Plan/Policy Exclusion,

    Specific Procedure Exclusion

     

    There are two types of policy exclusion denial: specific policy/plan exclusion as named under exclusion provision of SPD and nonspecific by determination, such as medical necessity, maintenance care, experimental and investigational status, then classified as excluded coverage under very ambiguous policy/plan exclusion provisions. Either way, a plan administrator, a fiduciary or insurance company has to disclose specific reason and specific reference to pertinent plan provisions for specific exclusion denial and disclose clinical rationale or determination in accordance with plan provision by making such denials.  Any universal, automatic, blanket denial as "not covered, excluded", and then asking claimant to check insurance policy, benefits booklet for specific reasons of denial by a plan administrator, fiduciary or an insurance company will not satisfy burden of proof requirement, ERISA denial notice requirement, and more importantly, this will deprive the claimant of a full and fair review guaranteed by ERISA, therefore a breach of fiduciary duties.

     

    This type of denial is most popular and frustrating to physicians and hospitals.  For 28 years, physicians and hospitals never understand ERISA mechanism for fiduciary obligations and burden of proof, never found a way out.

     

    A simple solution is to timely file ERISA required appeals and ask the other side to prove otherwise.  Do not  submit medical records to argue medical merits because medical merits are not the reasons for denial.  Do not waste time on the phone arguing medical necessity because claim customer service representative will not have power to change a policy exclusion denial on the phone unless you simply want to ask for a slight clarification.

     

    Make sure to file second level of appeal after 30 days to complete two levels of required appeal.  After 60 days you have legally completed your required administrative remedies and ready for lawsuit in federal court, which may not likely happen in every case but certainly will change your negotiation position from hopeless to very serious and powerful.

     

    "No Appeals, No Science"

     

     
     

    JO ORTLIEB v UNITED HEALTHCARE

    http://caselaw.findlaw.com/data2/circs/8th/041383P.pdf

    8th Cir., 10/28/2004

     

    "....Thereafter, Ortlieb contested the denial of coverage by filing her case in the district court. The district court reviewed the benefit determination using an arbitrary and capricious standard of review. In opposing United HealthCares motion for summary judgment, Ortlieb submitted four technical documents discussing TPN, none of which were included in the administrative record. The district court declined to consider the new evidence. Based on the administrative record, the district court determined United HealthCare reasonably relied on the assessments of multiple doctors that TPN was an unproven therapy for Ortliebs medical conditions. The district court rejected Ortliebs argument that United HealthCare had failed to consider the life-threatening condition exception to the unproven service exclusion. The court granted summary judgment in favor of United HealthCare. Ortlieb now appeals......"

     

    ERISAclaim.com Comment:

     

    If healthcare providers didn't appeal under ERISA in a timely fasion, the federal court may not consider these new evidence at trial, even they could truly scientifically persvasive, as they are not considered as these new scientic eveidence are not part of administrative records the court will exam under ERISA.

     

    Timely ERISA appeal is more important than "true science" under ERISA, as federal law and rules are also important things to follow.

     

    This will help all of us here in recent denials crisis.

     

     

    "ERISA places the burden of proving an exclusion from coverage in an ERISA-regulated welfare plan on the plan administrator."

     

    For more specific information, please review or download a demo CD book or place an order for complete copy of ERISA for Physicians: Healthcare ERISA Claim Denials and Appeals

     

    Appeal Letter for Medical Necessity Denial

     Level I

     

    Medical necessity denial is probably the most common and popular denial reason for medical and health-care claims

     

    Legal principle governing medical necessity determination under ERISA is quite different from that of traditional insurance coverage dispute.  Under ERISA, if a plan administrator is given discretionary authority to make benefits determination and such plan administrator's determination is reasonable, even though it may not be medically correct determined by the court at a later time, the court will give deference or significance to such determination and uphold denial decision.  However a plan administrator's decision has to be reasonable and consistent with plan document with specific terms and conditions of SPD and complied with ERISA disclosure requirements and afforded the claimant a full and fair review as discussed earlier in this book.  Otherwise a plan administrator's determination will be considered as abuse of discretion and possibly reversed by federal court. Therefore the strategy of necessity of appeal is disclosure, a full and fair review.  If two appeals have completed without any response or disclosure in 60 days, you have probably established that abuse of discretion.  This is different from traditional insurance coverage dispute in state court, where new testimony, new evidence and last minute expert testimony may change the entire outcome.

     

    CMS News on Wheelchair and Medical Necessity

    December 15, 2004: MEDICARE OPENS NATIONAL COVERAGE DETERMINATION TO MAKE SURE BENEFICIARES WHO NEED WHEELCHAIRS GET THEM

     

    October 18, 2004: MEDICARE BENEFICIARIES WILL SOON BE ABLE TO RESOLVE MEDICARE APPEALS FASTER

    “We are working toward completing our overhaul of the Medicare claims appeals system by October 1, 2005 to better serve Medicare beneficiaries, providers, physicians, and other health care providers.”
     

    Maximum Comfort, Inc v. Tommy G. Thompson

    (06/30/2004, United States District Court for the Eastern District of California)

     

     It is also important to understand the principle of burden of proof, by the time you are filing an appeal, you must have received a denial, then it is insurance company or plan administrator's turn to prove and disclose relevant evidence supporting that initial denial decision.

     

    For every type of physicians, medical necessity denial is very popular, therefore request for a copy of SPD that has the definition of medical necessity and maintenance care would be extremely helpful because a plan administrator's determination has to be consistent with written document rules, if any guidelines and definitions of medical necessity is not written into plan, it cannot be used to make any determination because ERISA plan can only operate upon written instrument.

     

    The next thing is independent third party utilization review employed by a plan administrator or insurance company to make denial decisions.  They will be a special section for this situation in this chapter.

     

    This may apply to different scenarios.

      

    Very often, an insurance company will give you multiple-choice as reasons for denial, if you successfully challenged one of them, it will quickly change to another reason, so that you will never be able to challenge any definitive reason for denial, such as dancing between policy exclusion and medical necessity by asking for medical records repeatedly and request for your endless appeal indefinitely until you finally give up.

     

    Level II

     

    The most important part of any ERISA claim appeal is to complete at least two appeals to complete appeal process in order to enjoy the protection provided by ERISA. In addition, one more appeal is advised before taking disputes to federal court. The more likelihood of prevailing your claim in federal court, the more chances your appeal will result in reimbursement and less likely court action is necessary.

      

    And an insurance company may use a very incredible medical expert but anonymous to deny your medical claim very "scientifically and medically", at least on paper.  This practice may successfully confuse judicial process due to its appearance of scientific and superior medical review documentation.  If a physician will sit down and combine medical and legal reasoning with ERISA principles to dissect this type of medical science review, you will see a complete different picture.

     

    Level III

     

    29 CFR 2560.503-1(c) (3)

    29 CFR 2560.503-1(l)

     

    Level III appeal is the "voluntary levels of appeal" as provided by ERISA, 29 CFR 2560.503-1(c) (3), in order to exhaust your administrative remedies and summarize, from A to Z and head to toes, the plan's failures in a full and fair review in handling your appeals in accordance with ERISA claim procedure to defeat plan's deferential judicial review privilege in federal court under 29 CFR 2560.503-1(l), in doing so, you will make one more last appeal and demand for your benefits payment. Most likely someone responsible for the plan, plan sponsor and administrator or named fiduciary of the plan, will communicate with you more fairly and more likely pay your benefits claims to avoid going to federal court for possible defeat.

     

    For more specific information, please review or download a demo CD book or place an order for complete copy of ERISA for Physicians: Healthcare ERISA Claim Denials and Appeals

     

     

    Appeal Letter for Utilization Review
    &
    Third Party Denial

     

    A.   Third Party Review Not Liable under ERISA

    (MERTENS v. HEWITT ASSOCS., 508 U.S. 248 (1993) - U.S. Supreme Court)

     

    I.  ERISA Plan/TPA's Might be Medically Liable Depending on Supreme Court New Ruling (Docket for 02-1845 Aetna v. Davila)

     

    II.  ERISA Does Not Pre-empt State Utilization Review & External Review Laws, 29CFR2560.503-1 (K) - Claims procedure.

     

    Press Releases

    Department of Law
    120 Broadway
    New York, NY 10271
     
    Department of Law
    The State Capitol
    Albany, NY 12224
     
     
    For More Information:
    (212) 416-8060
    For Immediate Release 
    March 30, 2004
    New Report Shows HMOs Do Not Adequately Comply with State Law
     

    ATTENTION RADIO NEWSROOMS:
    AN AUDIO CUT IS AVAILABLE BY CONTACTING THE ATTORNEY GENERAL'S 24 HOUR TOLL-FREE NEWS LINE AT (877) 345-3466, CHOICE #1.

     
    Press Release

    Survey Report - (HTML Version | PDF Version)

     

    Under ERISA, any third party utilization review entity or claim administrator will not be ultimately liable for any fiduciary breach so long as this third party individual or entity is not a named fiduciary or performing significant fiduciary functions with specific and explicit discretionary delegation from a plan administrator.  Therefore any appeal or communication to such third party individual or entity is not considered as a valid ERISA appeal, required for judicial review (lawsuit in federal court).  Although physicians are dealing with this type of third party practice on day-to-day basis, especially when most states do not have specific laws with sufficient regulation and practical remedies, the appeal strategy of this type of communication shall be focused on credibility dispute, instead of liability pursuing or expectation.  In another word, in physicians mind, always beware these type of third party individuals are not going to be held liable in federal court, as long as credibility and truthfulness of review opinions by these utilization review organizations or individuals can be proven, by your written communication, to be fatally flawed, your appeal is considered a success.

     

    The Root of U. S. Healthcare Crisis

    Jin Zhou, ERISAclaim.com

    The Hearing at Senate Committee on Finance on 3-3-04, [View Video "Health Insurance Challenges: Buyer Beware" 3-3-04
Hearing, Senate Committee on Finance
or Transcript (PDF) (KaiserNetwork.org)]  revealed the mechanism, nature and extent of ERISA failure and nonenforcement as the reasons for "Growth in Bogus Health Insurance Plans Targeting Desperate Small Business Owners", as being concluded as "No the results are not good. It’s a tragedy." by Ann Combs, assistant secretary of DOL. The mechanism, nature and extent of ERISA failure and nonenforcement as presented at the Hearing are universally true and applicable to all health care claim denials and delays in managed care environment from all employer sponsored health plans as the root of U. S. healthcare crisis.

     

    This is a 911 call on "healthcare 9/11 disaster"!

    THE 9/11 COMMISSION REPORT (pdf)

     

     

    The third party reviewer is only a messenger not a plan administrator.

     

    I. ERISA Plan/TPA's Might be Medically Liable Depending on Supreme Court New Ruling (Docket for 02-1845 Aetna v. Davila)

    After decades of confusion and frustration, U.S. Supreme Court is expected to make a final ruling some time in June or July with oral argument scheduled on Mar 23, 2004. Pease check back on ERISAclaim.com - Managed Care Court Watch to see final score.

    II.  ERISA Does Not Pre-empt State Utilization Review & External Review Laws, 29CFR2560.503-1 (K) - Claims procedure.

      

    "(k) Preemption of State law. (1) Nothing in this section shall be construed to supersede any provision of State law that regulates insurance, except to the extent that such law prevents the application of a requirement of this section.
        (2) (i) For purposes of paragraph (k)(1) of this section, a State law regulating insurance shall not be considered to prevent the application of a requirement of this section merely because such State law establishes a review procedure to evaluate and resolve disputes involving adverse benefit determinations under group health plans so long as the review procedure is conducted by a person or entity other than the insurer, the plan, plan fiduciaries, the employer, or any employee or agent of any of the foregoing.
        (ii) The State law procedures described in paragraph (k)(2)(i) of this section are not part of the full and fair review required by section 503 of the Act. Claimants therefore need not exhaust such State law procedures prior to bringing suit under section 502(a) of the Act."

     

    B.   National Review Guidelines

     

     In Illinois, a new state law has been enacted for more than two years, Managed Care Reform and Patient Rights Act, to regulate licensing and certification of medical utilization review business

     

    Illinois Managed Care Reform and the Patient Rights Act mandates registration for utilization review (medical necessity review) and requires compliance with the Health Utilization Management Standards of the American Accreditation healthcare Commission (URAC), URAC Standards - version 4.2 (URAC DOL Memo - version 4.1, URAC FAQ - version 4.1,)

     

    URAC AMENDS STANDARDS IN RESPONSE TO DEPARTMENT OF LABOR CLAIMS REGULATION (7/1/2002)

     

    URAC AMENDS UTILIZATION MANAGEMENT STANDARDS TO ALIGN WITH FEDERAL REGULATION (4/15/2003)

     

     

    Health Utilization Management [URAC.org]

     

    "• Are compatible with the 2002 U.S. Department of Labor claims regulations"

     

    "URAC Health UM Accreditation requires each organization to establish and implement a three-step process to determine if a proposed medical treatment or service is medically necessary:

     

    •  Initial Clinical Review – A licensed health professional, such as a nurse, conducts this first, critical step

    •  Peer Clinical Review – A physician qualified to render a clinical opinion about the proposed treatment or service must perform peer clinical review

    •  Appeals Consideration – Patient or provider initiates the appeal, which is considered by a qualified, board-certified physician in the same specialty not involved in the initial review decision. The process must be expedited, if requested."

     

    As of Sept. 2003, 34 states and the District of Columbia have incorporated URAC's accreditation programs or standards into their health care regulatory process through statute, regulation, agency publication, or in some other manner. In addition, several federal agencies, including the Office of Personnel Management for purposes of the Federal Employees Health Benefits Program and the Department of Veterans Affairs, believe that URAC accreditation provides an important indication of quality for a variety of health care organizations. (URAC)

     

    Who Would Decide When to
    Discharge A Patient
    ?
    (Copyright © 2004 by Jin Zhou,  ERISAclaim.com)


    U.S. SUPREME COURT
    Docket for 03-83
     

    ORAL ARGUMENT TRANSCRIPTS (page 16-17 0f 49)

      02-1845. Aetna Health Inc. v. Davila 03/23/04

    "QUESTION: Yes, but in the situation in the hospital case, there was no time to get relief. How could they -- how could they get relief from the denial of the extra day in the hospital between midnight and the next morning?

    .....

     

    QUESTION: And what does that mean in the hospital setting? And what -- was she going to file a complaint with the Department of Labor?

     

    MR. FELDMAN: These claims can be made orally, again, if the exigencies require, and she could -- she didn't try -- as far as we know, no one made a phone call to the insurer and said can I get the extra benefits; she needs it. We don't know what the results of that would have been.

     

    QUESTION: Well let's assume the case -- because your preemption item would cover even the most extreme case. Assume the case in which the patient and the doctor both called the agency and appealed and they said we're too busy, we can't handle it and it later determines they were -- did not exercise due care.

     

    MR. FELDMAN: But then --

     

    QUESTION: Why are you preempting the state providing a remedy for that situation?

     

    MR. FELDMAN: That would have been itself a denial of their obligations under the Department's claim processing --claims processing procedures. But let me say there's also --

     

    QUESTION: It would have been a denial, but it wouldn't have given her the extra day in the hospital?

     

    MR. FELDMAN: Right, but there are other backstops for her getting the extra day in the hospital. She is, at that point, in the same position as anyone else who can't pay for another day in the hospital but they need it.

     

    QUESTION: I understand.

     

    MR. FELDMAN: It's up to her doctor, with whom she has a doctor patient relationship that's a consensual relationship for providing medical treatment. It's up to her doctor to decide when she should be discharged from the hospital and when she shouldn't."

     

     (Page 17-19)

     

    JAMES A. FELDMAN, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the United States, as amicus curiae, supporting petitioners.

     

    C.   Strategy

     

    Because utilization review/medical necessity review opinions by third parties are legally advisory in nature, it's credibility and compliance with applicable state laws and industry guidelines are centerpiece of success, based on which a plan administrator can make decision to substantiate medical care reasonableness and appropriate utilization. If utilization review individual or entity fails to comply with applicable state laws and industry guidelines, its opinion will be useless and legally carries no weight.  Therefore appeal strategy is to seek for compliance and discover noncompliance.

     

    Generally, URAC provide guidelines on definitions of terminologies, accreditation, disclosure of identities and credentials, disclosure of clinical rationale and explicit review guidelines from reviewers. One of the most significant protection is the following: 

    "Peer-to-Peer Conversation

    Standard UM 22

    Health professionals that conduct peer clinical review are available, by telephone or in person, to discuss review determinations with attending physicians or  other ordering providers.

    Standard UM 23

    When a determination is made to issue a non-certification and no peer-to-peer conversation has occurred, the organization provides, within one business day of a request by the attending physician or ordering provider, the opportunity to discuss the non-certification decision with the clinical peer reviewer making the initial determination (or with a different clinical peer), if the original clinical peer reviewer cannot be available within one business day." (UM Standards, v. 4.1, page 15)

     

    "Non-Certification: A determination by a utilization management organization that an admission, extension of stay, or other health care service has been reviewed and, based on the information provided, does not meet the clinical requirements for medical necessity, appropriateness, level of care, or effectiveness under the auspices of the applicable health benefit plan." (UM Standards, v. 4.1, page 25)

     

    Non-Certification determination from URAC (denial, adverse medical necessity determination) can be made for ERISA pre-service claim, post-service claim, or pre-certification, Concurrent care decisions or retrospective claim review.

    Utilization review is solely for medical necessity and utilization of certain health care service, not for billing and coding review.

     

    Effective appeal practice should include two letters, one before review results but after review requests, one after review results received.  Before review results, request for disclosure for licensing, credential and explicit review guidelines from utilization review individual and organization.  After review results, appeal immediately and request for the above-mentioned and clinical rationale, and request for one business day telephone interview with clinical peer reviewer.  If utilization reviewer fails to or refuses to comply, its review is incomplete and prejudiced, cannot be and should not be used by plan administrator to make benefits denial decisions.

     

     One extremely important aspect of this type of third party utilization review and pre-certification practice is that reckless and fraudulent refusal of pre-certification for legitimate medical service by non-fiduciary third parties will significantly and effectively discourage both patients and physicians to incur necessary and reasonable medical expenses with fear of nonpayment by insurance companies or ERISA fiduciaries, thus there will be no "contractual damage" available to worry about if litigation is ever contemplated or pursued by patients and physicians, because ERISA only provides for “contractual damage” (medical bills) regardless what happens, this way any ERISA lawsuit will never be brought without financial rewards because there is no "contractual damage" ever incurred due to pre-certification denial by a non-fiduciary third party anonymous reviewer.  In the end, all a fiduciary or insurance company has to say is that no fiduciary has made that pre-certification denial, which was made by that  non-fiduciary anonymous individual, whom is nowhere to be found because such third party anonymous reviewer was never registered with any governmental agency but a P.O. Box identification only.

     

    Two sample letters are also included in this book to appeal independent third party utilization review's negative determination or pre-certification.

     

    Although self-insured ERISA plans and group health insurance plans in private sectors are subject to ERISA when disputes are "related to the employee benefits"/medical claims, any utilization review business performed by any independent, nonstatutory employees of ERISA plan are subject to state laws regulating business licensing, registration and managed care as well as patient rights.

     

    Under ERISA regulation the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment. Under New ERISA regulation [Page 70271] 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.

     

    For more specific information, please review or download a demo CD book or place an order for complete copy of ERISA for Physicians: Healthcare ERISA Claim Denials and Appeals

     

     

    B. ERISA Plan/TPA's Might be Medically Liable Depending on Supreme Court New Ruling (Docket for 02-1845 Aetna v. Davila)

     

    In general, state laws are preempted under ERISA for pure eligibility/coverage determination in self-insured ERISA plans. General state laws are preempted for pure eligibility/coverage determination in fully-insured ERISA plans (group health insurance plans) except for state laws regulating insurance business, and except for state laws regulating utilization review/medical necessity determination instead of pure eligibility determination/policy coverage in fully-insured ERISA plans and self-insured ERISA plans if such utilization review is performed by third parties.  State laws regulating independent/external medical reviews are NOT preempted by ERISA in mixed coverage and medical necessity dispute for fully-insured (group health insurance) ERISA plans according to the latest  U.S. Supreme Court ruling in RUSH PRUDENTIAL HMO, INC. v. MORAN.

     

    In Illinois, the most powerful but easiest way to find out if utilization reviewer/peer reviewer/independent medical evaluation reviewer is your clinical peer as required by both federal Laws (Q-D8, Q-D9, Q-D10 & Q-D11) and state laws (215 ILCS 134/45d), is to do a professional license lookup from Illinois Department of Professional Regulation, then look up if this reviewer is registered with Illinois Department Of Insurance as required by Illinois Managed Care Reform and the Patient Rights Act.

     

    For other states, similar state laws (External Review) and verifications of reviewer's licensing/registration are available under applicable State Agencies, although there is distinction between state laws designed to regulate pure policy coverage and utilization review/medical necessity review as well as state laws regulating mixed policy coverage disputes and medical necessity determination.

     

    The following is the links to the web sites for Department Of Insurance in every state. Use the search words, "utilization review", "independent review", "external review", "medical necessity", "Peer Review" and "health care review", to locate specific state laws and regulations governing medical necessity determinations and disclosure requirements.

     

    New Study: ER Denials?
    Medical or ERISA Appeals? Appeals!

    (Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

    "There are two take-home messages for health professionals," Hall said. "One, insurers much less often question the appropriateness of emergency services"  = not about Medical necessity; 

     

    "and two, if insurers initially deny coverage for emergency care, providers or patients should appeal."  = ERISA Appeals

     

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

    "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]

     

    It is extremely important to verify if what so-called "independent" utilization review/medical necessity review is truly independent under third party utilization review registration and legal authority or under insurer/plan sponsor/TPA's Utilization Review Registration or legal authority.

     

    More and more recent federal and state rulings clarified that the practice of utilization review might be medical decision-making/judgment subject to medical malpractice lawsuit, and utilization review performed under insurer, ERISA plan or TPA's legal and institutional authority by anyone would subject such insurer, plan sponsor or TPA to medical malpractice lawsuits.

     

    In a recent federal appeals court ruling, CICIO v VYTRA HEALTHCARE, the court clarified the distinction between "pure eligibility and coverage decisionmaking" and "medical decision-making/judgment":

     

    "A.The Practice of Utilization Review

     

    The plaintiff's medical malpractice claims are based on Dr. Spears's denial of coverage for a double stem cell transplant for Mr. Cicio. Letter from Brent W. Spears to Edward T. Samuel dated February 23, 1998, at 1. Dr. Spears's decision occurred in the course of Dr. Samuel's attempt to obtain authorization for the double stem cell transplant from Vytra. Compl. ¶¶ 15, 19-21. The complaint then details a process of utilization review, and it is the nature of this procedure, and its relation to ERISA, upon which we now focus.

     

    Utilization review usually involves "prospective review by a third party of the necessity of medical care." Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1326 (5th Cir.), cert. denied, 506 U.S. 1033 (1992); see also Pegram, 530 U.S. at 219.10 "[T]he typical prospective review system requires some form of pre-admission certification by a third party," Corcoran, 965 F.2d at 1327, such as Vytra's Medical Director, Dr. Spears. "Although prospective utilization review involves no traditional face-to- face clinical encounter, it is still quasi-medical in nature. It necessarily involves evaluation of data collected in such an encounter." Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 5 n.5 (1st Cir. 1999); see also Corcoran, 965 F.2d at 1331 (characterizing utilization review as a medical decision); Note, Jonathan J. Frankel, Medical Malpractice Law and Health Care Cost Containment: Lessons for Reformers from the Clash of Cultures, 103 Yale. L.J. 1297, 1318 (1994) ("Cost-containment programs . . . redistribute what we normally consider 'medical authority' to nontraditional actors."). Prospective utilization review blurs boundaries between the traditionally "distinct sphere of professional dominance and autonomy" of the medical profession on the one hand, Paul Starr, The Social Transformation of American Medicine 27 (1982), and the managerial domain on the other. As such, it represents a development apparently unforeseen at the time of ERISA's enactment. See Jeffrey E. Shuren, Legal Accountability for Utilization Review in ERISA Health Plans, 77 N.C. L. Rev. 731, 733 (1999).

     

    Moreover, as other courts have noted, "a system of prospective decisionmaking influences the beneficiary's choice among treatment options to a far greater degree than does the theoretical risk of disallowance of a claim facing a beneficiary in a retrospective system." Corcoran, 965 F.2d at 1332; accord Danca, 185 F.3d at 5 n.5. And, "[i]n many instances, a denial of coverage results in the patient forgoing the procedure altogether." J. Scott Andresen, Is Utilization Review the Practice of Medicine?, 19 J. Legal Med. 431, 432 (1998). Thus, decisions with a medical component -- i.e., involving the exercise of medical judgment in relation to a particular patient's symptoms -- are made in the course of utilization review by staff who are independent of and separate from the locus of traditional medical decision-making authority. These medical decisions have possibly dispositive consequences for the course of treatment that a patient ultimately follows."

     

    An appeal strategy is to request by certified letter for the insurer/administrator or TPA to verify or to clarify if medical necessity review was performed under such legal entity's UR registration and legal or institutional authority.

     

    For more information in recent Supreme Court and federal appeals court rulings in this regard, please visit Court Watch page, four appeal sample letters, please visit Appeal Book & System Page on this web site.

     

    "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.

     

     

    Medical Necessity Denials Must Be Appealed

    In Accordance with ERISA Claim Regulations

     

    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."

     

    "......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."

     


    APPEAL
    ? What If.....?

     

    California BUSINESS AND PROFESSIONS CODE SECTION 2050-2079

    2056.  (a) The purpose of this section is to provide protection against retaliation for physicians who advocate for medically appropriate health care for their patients pursuant to Wickline v. State of California 192 Cal. App. 3d 1630.
       (b) It is the public policy of the State of California that a physician and surgeon be encouraged to advocate for medically appropriate health care for his or her patients.  For purposes of this section, "to advocate for medically appropriate health care" means to appeal a payor's decision to deny payment for a service pursuant to the reasonable grievance or appeal procedure established by a medical group, independent practice association, preferred provider organization, foundation, hospital medical staff and governing body, or payer, or to protest a decision, policy, or practice that the physician, consistent with that degree of learning and skill ordinarily possessed by reputable physicians practicing according to the applicable legal standard of care, reasonably believes impairs the physician's ability to provide medically appropriate health care to his or her patients.

    215 ILCS 134/  Managed Care Reform and Patient Rights Act. (215 ILCS 134/35)

    Sec. 35. Medically appropriate health care protection.
    (a) No health care plan or its subcontractors shall retaliate against a physician or other health care provider who advocates for appropriate health care services for patients.
    (b) It is the public policy of the State of Illinois that a physician or any other health care provider be encouraged to advocate for medically appropriate health care services for his or her patients. For purposes of this Section, "to advocate for medically appropriate health care services" means to appeal a decision to deny payment for a health care service pursuant to the reasonable grievance or appeal procedure established by a health care plan or to protest a decision, policy, or practice that the physician or other health care provider, consistent with that degree of learning and skill ordinarily possessed by physicians or other health care providers practicing in the same or a similar locality and under similar circumstances, reasonably believes impairs the physician's or other health care provider's ability to provide appropriate health care services to his or her patients.

     

    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."

     

     

    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.

     

    90% Wrongful Denial?

     

    Another 2004 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 paym 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."

     

    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.

     

    Federal Employees Health Benefits Program
    Aetna - Chicago
    Plan Brochure

    2005

    What to do in case of emergency:

    "If you need emergency care, you are covered 24 hours a day, 7 days a week, anywhere in the world. An emergency medical condition is one manifesting itself by acute symptoms of sufficient severity such that a prudent layperson, who possesses average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the person’s health, or with respect to a pregnant woman, the health of the woman and her unborn child.

     

    Whether you are in or out of an Aetna HMO service area, we simply ask that you follow the guidelines below when you believe you need emergency care.

     

     • Call the local emergency hotline (e.g., 911) or go to the nearest emergency facility. If a delay would not be detrimental to your health, call your primary care physician. Notify your primary care physician as soon as possible after receiving treatment.

    • After assessing and stabilizing your condition, the emergency facility should contact your primary care physician so he/she can assist the treating physician by supplying information about your medical history.

    • If you are admitted to an inpatient facility, you or a family member or friend on your behalf should notify your primary care physician or Aetna as soon as possible. "

     

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

     


    Overpayment Recoupment Crisis for 2004

    No Appeal = Denial = No Payments

    No Appeals + Deductions >>= Overpayment Recoupment

    = "Money Back Guaranteed"

    Denials + Recoupment = Inflation + Fraud or Cost-Sharing?

    Rx = Compliant Denial & Appeals!

    Forbes.com: "Roughly one in seven Americans has no health insurance. That hurts HCA Inc. (nyse: HCA - news - people), the largest U.S. hospital chain, which last year wrote off $2.21 billion of revenue because patients couldn't pay their bills."

    The American Hospital Association (AHA): "Hospitals today are faced with the challenge of managing their limited resources, while continuing to deliver the highest standard of care. According to health care experts, the cost of clinical denials to individual healthcare organizations averages $3.3 million annually. However, many hospitals do not have the resources or the expertise needed to avoid unpaid days at the end of admissions and lead the denial-appeals processes."

    Payments Go Under a Microscope (washingtonpost.com) "MAMSI and CareFirst recoup overpayments to doctors by making deductions from future reimbursements. Doctors can appeal insurers' decisions. But, in the end, they usually pay up, doctors and insurers agree."

    Hospital Pricing and the Uninsured, Glenn Melnick, Ph.D., "Price Gouging"
    (Subcommittee on Health
    Hearing on the Uninsured, Tuesday, March 09, 2004)

    U.S. FILES COMPLAINT AGAINST NATIONAL ACCOUNTING FIRM UNDER FALSE CLAIMS ACT (DOJ Press Release"January 5, 2004 - PHILADELPHIA – United States Attorney Patrick L. Meehan announced today the filing of the Government's complaint against national accounting firm Ernst & Young. According to the complaint, nine hospitals paid Ernst & Young for billing advice – advice which later caused the submission of false claims to the Medicare program."

    USATODAY.com - Hospitals Sock Uninsured with Much Bigger Bills

    GM to Report $60B in Future Health-Care Obligations

     

    Last but not least step, your reality check:

     

     

    Discount for March 2005: $35
     

    $450 ERISA CD Book

    With New 2005 Update (including New ERISA Assignment Form Required for ERISA Appeals, DOL, FAQ, B2-3)

     

    950,000 MD's Settled With
    Aetna & Cigna on ERISA

     

    &&&

     


    Payments Go Under a Microscope (washingtonpost.com)

    January 12, 2004

    "CareFirst officials said the audit of 2,800 doctors was triggered by an earlier examination of several thousand claims that found 9 of every 10 were inaccurate. "The doctors, we're not saying we don't trust them," said Jeff Valentine, a CareFirst spokesman. "But as President Reagan said a number of years ago: 'Trust, but verify.' "

     

    "The largest insurer of all, the federal government, recently estimated that the Medicare program overpaid doctors, hospitals and other health-care providers by $11.6 billion in 2002, according to an audit of 128,000 claims. The audit found many providers submitted insufficient documentation (45 percent), billed for medically unnecessary services (22 percent) and used incorrect codes to describe patient visits (12 percent)."

     

    "A larger audit is planned this year. "The digging now is much deeper," said Leslie V. Norwalk, chief operating officer of the Centers for Medicare & Medicaid Services, the government agency known as CMS. "Any dollar overpaid is a dollar too much."

     

    "MAMSI and CareFirst recoup overpayments to doctors by making deductions from future reimbursements. Doctors can appeal insurers' decisions. But, in the end, they usually pay up, doctors and insurers agree."

     

    U.S. FILES COMPLAINT AGAINST NATIONAL ACCOUNTING FIRM UNDER FALSE CLAIMS ACT

     

    Press Release   Complaint (pdf)

    "January 5, 2004 - PHILADELPHIA – United States Attorney Patrick L. Meehan announced today the filing of the Government's complaint against national accounting firm Ernst & Young. According to the complaint, nine hospitals paid Ernst & Young for billing advice – advice which later caused the submission of false claims to the Medicare program."

    .....

    "It is the responsibility of an independent reviewer to be alert to fraud and abuse and certainly not to ignore it," said Meehan. "In this case, as the complaint alleges, Ernst & Young kept itself deliberately ignorant of the facts."

    Forbes.com:

     

    "Roughly one in seven Americans has no health insurance. That hurts HCA Inc. (nyse: HCA - news - people), the largest U.S. hospital chain, which last year wrote off $2.21 billion of revenue because patients couldn't pay their bills."
     

    The American Hospital Association (AHA):

    "Hospitals today are faced with the challenge of managing their limited resources, while continuing to deliver the highest standard of care. According to health care experts, the cost of clinical denials to individual healthcare organizations averages $3.3 million annually. However, many hospitals do not have the resources or the expertise needed to avoid unpaid days at the end of admissions and lead the denial-appeals processes."

    "Pipal said there is little recourse for disgruntled physicians and their patients, because managed-care companies function under the Employee Retirement Income Security Act (ERISA) of 1974, a federal law with new provisions governing health care benefits."

     

    Hospital group examines plan for free care

     

    "Aggressive collection tactics with uninsured patients cost a non-profit hospital in Urbana its tax-exempt status last month. Illinois Attorney General Lisa Madigan is investigating hospitals’ dealings with the uninsured, and a Chicago alderman is talking about revoking tax breaks for hospitals that limit charity care."

    Labor Department Sues Corporation For Violating Federal Employee Benefit Law (Release Date: 02/02/2004)

     

     

     

    Health Benefits Laws By State
    (Interactive Tools From Insure.com)

    Health Insurance Mandates in the States, 2004: a State-by-State Breakdown ... (PDF)
    (Council for Affordable Health Insurance)

    Kaiser statehealthfacts.org

    Consumer Guides for Health Insurance in Every State and the District of Columbia (Georgetown University)

    Medicare Health Plan Tracker -- Interactive Online Tool for Information Retrieval (Kaiser Family Foundation)

    Use this comprehensive interactive guide to find your rights to specific coverage, pre-existing medical conditions, prompt-pay laws, your rights regarding guaranteed-issue plans, and external grievance review panels.

     



    View a 5-minute clip  Paper Chase "Health Insurance Challenges: Buyer Beware" 3-3-04
Hearing, Senate Committee on Finance

        Paper Chase in 20% of national healthcare claims has been revealed and scrutinized, while Paper Chase in 80 percent of national healthcare claims ($1.55 trillion) has been ignored by health-care providers due to lack of understanding of ERISA, because ERISA preempts State Laws in 80 percent of healthcare claim Disputes, and third party reviewers are never liable under ERISA, even new Federal Regulations providing more protections (Q-C16, Q-C17, Q-D9 & Q-D10) against such Paper Chase are totally ignored by health-care providers.

    (Peer Review)
    ORDER

    Final Order

    S T A T E  O F  N O R T H  D A K O T A
    MARKET CONDUCT
    EXAMINATION
    REPORT -
    CHIROPRACTIC BENEFITS

    NORIDIAN MUTUAL INSURANCE COMPANY
    DBA BLUE CROSS BLUE SHIELD OF NORTH DAKOTA

    [PDF] MARKET CONDUCT EXAMINATION REPORT

    [PDF] STATE OF NORTH DAKOTA INSURANCE COMMISSIONER IN THE MATTER OF Blue Cross Blue Shield of North Dakota Market Conduct Examination Report on Chiropractic Benefits 
     

     

    ND: 26.1-26.4

    Health Care Service Utilization Review

    SB 2184 – Minimum standards for utilization review (26.1-26.4-04).

    Provides for utilization review standards consistent with federal law and with standards established by the United States Department of Labor.

     

    State of Illinois, Department of Insurance

                (Utilization Reviewer Registration Verification)

     

    Contact The Proper Agency - Where to File
    Medicare, Medicaid and Other Health Plan Complaints
    Illinois Department of Insurance Seal

    Illinois Department of Insurance
    Understanding the Health Care Provider
     Complaint Process

    Hard Copy PDF Format
    On-line Health Care Provider Complaint Form

    DOL Compliance Assistance for Health Plans

     

     

     

     

     

    ERISA Not Insurance

    Aetna Video Shows ERISA Patients Mistreated

     

    "According to the video, when faced with claims for identical medical problems, Aetna separates the claims where no damages are available - those subject to the federal Employee Retirement Income Security Act, or ERISA - from non-ERISA claims, where consumers can sue.1 2"

     

    Aetna ERISA Settlemnt with 950,000 MD's

     

    Commentary and Excerpts: Texas Jury Finds Humana HMO Liable in Wrongful Death Lawsuit (Attorney B. Janell Grenier via Benefitsblog.com)

     

     
    No ERISA Preemption of BOME Regulation of Medical Decisionmaking ...
    Murphy v. Board of Medical Examiners, 949 P.2d 530, 190 Ariz. 441, 247 Ariz. Adv. Rep. 35 (Ariz.App.Div.1 07/15/1997)

     (Edward P. Richards, III, J.D., M.P.H.)

     

    "Although Dr. Murphy is not engaged in the traditional practice of medicine, to the extent that he renders medical decisions his conduct is reviewable by BOMEX. Here, Dr. Murphy evaluated information provided by both the patient's primary physician and her surgeon. He disagreed with their decision that gallbladder surgery would alleviate her ongoing symptoms. S.B.'s doctors diagnosed a medical condition and proposed a non-experimental course of treatment. Dr. Murphy substituted his medical judgment for theirs and determined that the surgery was "not medically necessary." There is no other way to characterize Dr. Murphy's decision: it was a "medical" decision."

     

    "We affirm the trial court's ruling that BOMEX has jurisdiction to review medical decisions which could affect the health or safety of a patient or the public, including decisions Dr. Murphy renders as medical director for Blue Cross. ...."

     

    Law Professor Looks at Criminal Prosecution for HMO Treatment Denial (Prof. John A. Humbach published by the Health Administration Responsibility Project (harp.org))

     

     

    Rolando Villazon, etc., v. Prudential Health Care Plan Inc.,

    AMNews: May 5, 2003. HMOs liable for actions of their network doctors
    Health plans control aspects of physician care and should be held accountable, the Florida high court says.

     

     

     

    Department of Labor

     
    "A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.

    Most private sector health plans are covered by the

     Employee Retirement Income Security Act (ERISA). Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans (participant rights), including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law."

     

     

    UCR

    Usual, Customary and Reasonable Charges

    FALLICK v NATIONWIDE MUTL INS

     

    Usual Customary and Reasonable claim denial is almost usual and customary but unreasonable denial for a physician's practice every day in industry.

     

    'Investigational' Treatments See Cutbacks By Health Insurance Plans (The Kansas City Star via The Foundation for Taxpayer & Consumer Rights)

     

    Silent PPO Discount

     

    $10,600 ERISA Claim

    Recent Federal Court Ruling in a Case with $10,600 medical claim, insurance Co. refused to pay, provider made numerous demand for payment in almost one year, but no appeals filed, the court dismissed the lawsuit because provider failed to exhaust administrative remedy, as required under ERISA, by filing ERISAclaim appeals.  This situation is so popular in health-care community.

     

     

    $37,350 ERISA Claim

    Health-care provider alleged medical claims submitted to Aetna for reimbursement, Aetna asserted no receipt of medical claims, no written denials.  Health-care provider failed to present proof of claim submission, claim denial and ERISA claim appeals. This case was dismissed. ERISA health-care claims are handled in federal court, state law is generally not applicable.

     

     

     

     

    External Review

    Patients' Rights: External Review 2000,50 State Comparisons:

     

    New Survey: State External Review Programs (Henry J. Kaiser Family Foundation)

     

    Prompt Payment

     

    Rights Bills

     

    $400,00 Fine

    Georgia fines Humana again for slow claims payments (insure.com)

       Excerpt: "Georgia has fined Humana Employers Health Care of Georgia   Inc. $400,000 for violating the state's prompt pay law, the second time in as many years that the HMO has been fined for dragging its feet on paying claims." (insure.com)

     

    Health Insurance Laws & Benefits Tools from INSURE.com

     

    NAIC News Release

     

    ERISA Laws/Rules

    ERISA in the United States Code: Cross-reference table, table of contents

     

    ERISA in US CODE

     

     

     

    Peer Review

     

     

    Independent Medical Review Experiences in California (California HealthCare Foundation)

     

     

     

     

     

     

     

    Office for Civil Rights - HIPAA

    OCR Guidance Explaining Significant Aspects of the Privacy Rule- December 4, 2002

     

     

    Statutes (United States Code) 
    ERISA - Title 29, Chapter 18. 

            Selected links:

    Sec. 1002.
    Definitions

    Sec. 1003.
    Coverage

    Sec. 1022.
    Summary plan description
    Sec. 1104.
    Fiduciary duties

    Sec. 1140.
    Interference with protected rights

    Sec. 1141.
    Coercive interference

    part 7
    group health plan requirements

     

     

    Code of Federal Regulations

    Codified in Title 29 of the Code of Federal Regulations:

    Regulations

            Selected links:

    2520.102-3 Contents of summary plan description.
    2560.503-1 

    Claims procedure.

     

     

     

     

     

     

     

    AMA (PSA)

     

     

    FDA Logo links to FDA home page

    New Super Search

     

     

     

    FDA > CDRH > Database Super Search

     

    "Device Listing Database

     

    Proprietary Device Name:

    MASSAGER ( THERAPUTIC, ELECTRIC, WATER

    Common/Generic Device Name:

    ASOOTHE/AQUAMED

    Classification Name:

    MASSAGER, THERAPEUTIC, ELECTRIC

    Device Class:

    1

    Product Code:

    ISA

    Regulation Number:

    890.5660

    Medical Specialty:

    Physical Medicine"

     

    Categorization of Investigational Devices

     

    "... all FDA-approved IDE's into either Category A (experimental / investigational) or Category
    B (nonexperimental/ investigational). An experimental / investigational ..."

     

    U.S. Department of Health and Human Services

    Medical Necessity in Private Health Plans

    Sara Rosenbaum
    Brian Kamoie
    D. Richard Mauery
    Brian Walitt


    U.S. Department of Health and Human Services
    Substance Abuse and Mental Health Services Administration


    Center for Mental Health Services

     

    View the PDF version
    You will need Adobe Acrobat Reader to view this file.

    Table of Contents

      Acknowledgments
    I. Executive Summary
    II. Introduction
      Research Methods
      Structure and Organization of the Review
    III. Medical Necessity and the Published Literature
    IV. Industry Practices in the Managed Care Industry
      Analysis of the Structure of Medical Necessity Definitions
      Interviews With Managed Care Officials on the Processes of Medical Necessity Determinations
      Managed Care Accreditation Organizations
      Judicial Case Law, Official Investigations, and Legal Actions
      Judicial Case Law
      Investigations and Official Legal Actions
         New York
         Maine
         Connecticut
    V. State Law Regulation of Medical Necessity
      Laws That Regulate the Content of Insurance Contracts
      Independent Review Statutes
    VI. Relevant Federal Laws Pertaining to Medical Necessity Reviews
      ERISA
      Office of Personnel Management Standards: FEHBP
    VII. Synthesis and Implications
    VIII. References
    IX. Endnotes
    Figures
    Figure 1: The Five Dimensions of the Medical Necessity Definition: Industry Practice
    Figure 2: NCQA and JCAHO Utilization Management Standards
    Figure 3: NCQA and JCAHO External Appeals Standards
    Figure 4: Common Procedural Problems in Medical Necessity Determination Processes Noted in Investigations, Litigation, and Case Law
    Figure 5: Medical Necessity Utilization Review and Appeals Procedures
    Tables
    Table 1. Medical Necessity Definitions in Published Literature (See Also Appendix C)
    Table 2. Medical Necessity Definitions: Managed Care Industry
    Table 3. Medical Necessity Definitions Identified in Case Law (Sorted by Case Name)
    Table 4. Medical Necessity Definitions Contained in State Statutes and Regulations
    Table 5. State Independent Review Statutes and Regulations
    Table 6. Medical Necessity Definitions: State Insurance Laws and IRO Statutes
    Table 7. State Independent Review Statutes With Specific Behavioral Health Provisions
    Table 8. Qualifications of External Reviewer in State IRO Statutes
    Table 9. Independent Reviews: Standard of Review for Medical Necessity Determinations
    Appendixes
    Appendix A. Selected Published Literature on Medical Necessity (Sorted by Year)
    Appendix B. NCQA and JCAHO Utilization Management and External Appeals Standards
    Appendix C. Litigation Regarding Medical Necessity Definitions and Procedures (Sorted by Case Name)
    Appendix D. State Investigations and Legal Actions Regarding Medical Necessity Issues

    SMA03-3790
    07/2003

     

     

     

     

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    CIGNA - Coverage Positions/Criteria
    "The terms of a participant's particular benefit plan document [Group Service Agreement (GSA), Evidence of Coverage, Certificate of Coverage, Summary Plan Description (SPD) or similar plan document] may differ significantly from the standard benefit plans upon which these Coverage Positions are based. If these Coverage Positions are inconsistent with the terms of the member's specific benefit plan, then the terms of the member's specific benefit plan always control."

     

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