Questions from the Internet #2

There are several medical coding and billing forums on the Internet and these forums are where people go to look for answers to problems that they are encountering. Monitoring these forums are experts in medical coding and billing, who are not paid to assist and guide those asking questions so they can find the answer to their problem. I have written this article covering one of those questions thus providing an answer. It is important to note that I have altered the names of the insurance companies and for privacy purposes the name of the person asking the question is removed. The question asked is quoted word for word.

This is the second part of the series. To read the first part go to here.

To refresh your memory here is the initial question:
"We just received a bunch of EOB's back on a patient who is on a self-funded construction union plan. We are out of network with his insurance. The insurance is demanding a total of $500 back from us claiming they overpaid on dates of service from Feb. 2013-Dec. 2013.

Apparently on his plan, for out of network doctor he is limited to $100/visit max they'll pay and $1,000/year max they'll pay. He has a deductible and then it's 60/40.

In looking through all of the "this claim backs out this claim which backs out this claim" on the EOB's I am totally lost as to what they're trying to say they overpaid.

Regardless, we submitted the claims in good faith. They processed and paid probably 15-20 dates of service over this 10 month period on this patient that they are now saying they processed wrong. Okay, one claim I could see, mistakes happen but this many for this much money and it took them this long to figure it out?

Any advice on how to proceed, other than (or on top of) billing the patient?

Also, when it's an ERISA plan, if we refuse to refund the money and tell them to go after their member for it (which we all know they won't do), legally can they take the money back from future payments on the same patient? A different patient with the same plan? A different patient with the same insurance company but totally different employer?"

In the last article, I discussed using State Law and this month, I will discuss using ERISA. The Poster mentions that the patient has a self-funded construction union plan. Some of these insurance companies will try to confuse you by telling you that the plan is NOT under the jurisdiction of ERISA, but, is it? Let's find out.

What is ERISA? ERISA is the Employee Retirement Income Security Act. ERISA is a Federal law. ERISA protects your health benefits when your health benefits are provided to you by your employer. The proof is with 29 United States Code (USC) 18, Section 1003(a). The language of this law is as follows:

this subchapter shall apply to any employee benefit plan if it is established or maintained-
(1) by any employer engaged in commerce or in any industry or activity affecting commerce; or
(2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or
(3) by both.

Is this self-funded plan under ERISA jurisdiction? Some will say NO, but, when you go to 29 USC 18,. 1002, you can see that it states the following:

The terms "employee welfare benefit plan" and "welfare plan" mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise

So, by looking at the definitions of these Federal laws we can place the patient's benefit plan under ERISA jurisdiction. This is important because just as we used State law to say no in the previous article, we can also use ERISA to say no. What you may find is that the insurance company could be sneaky because when you reply using State law to say no, they don't want to give up. They'll come back after changing horses in mid-stream and now tell you that State law has no jurisdiction in this matter. They will not be afraid to shove ERISA in your face like a new puppy that just did their business on your brand new living room carpet. I love it when they do this because now they confirmed what I suspected and now I can come back and use ERISA with claims that they did not pay correctly and to fight any further refund demands that they make.

Why do they shove ERISA in your face? I found that the answer is simple. They either think or hope that you will have no clue as to what ERISA is and if you don't know anything about ERISA or you research ERISA to find an answer about a refund demand the odds will be that you will not find anything or you will find so much information that you will be overwhelmed and confused. So your option to make this go away is to write the check. I'm a firm believer in the Betty Ford philosophy of "Just Say NO!" You've said no using State Law, so how do you say no using ERISA? Again, ERISA has no specific language about refunds. There is NO time limit like State law has which is why you become confused. ERISA doesn't say much outright, but it does provide you with information if you know where to look.

The ERISA regulation provides you with the power to say No! 29 CFR 2560-503-1 defines the following:

Every employee benefit plan shall establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse benefit determination.

What is an adverse benefit determination? That too is defined in 29 CFR 2560-503-1.

The regulation states the following:

The term "adverse benefit determination" means any of the following: a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit, including any such denial, reduction, termination, or failure to provide or make payment that is based on a determination of a participant's or beneficiary's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.

Now we know that we have an adverse benefit determination and ERISA states that the insurance company will have a plan in place to notify the patient (also called member or claimant) when an adverse benefit determination has taken place. It doesn't say that the insurance company can bypass the patient and contact the doctor about the return of the health benefit payment. The insurance company does not want to contact the patient about this because they know that if they contact the patient, it will make the patient angry and they cannot take back money from the patient. Their thinking is that they can withhold payment from another claim, but, can they? When they withhold or take back a payment from another claim, this too could be considered an adverse benefit determination on that other benefit claim payment and when they perform an adverse benefit determination the insurance company has requirements that federal regulation requires. When you look at Federal Regulation 29 CFR 2560-503-1, you see that it states the following:

In the case of a post-service claim, except as provided in paragraph (i)(2)(iii)(B) of this section, the plan administrator shall notify the claimant, in accordance with paragraph (j) of this section, of the plan's benefit determination on review within a reasonable period of time.

The regulation says that the insurance company should have contacted the patient. Did they do this? No, instead of contacting the patient, they contacted you. Under ERISA if they contacted the patient, the patient can appeal what has happened and when the patient says no there's not much that the insurance company can do against the patient. The patient can hire a lawyer and go to federal court. The patient's employer can terminate the insurance policy and buy insurance with a different insurance company.

You should say no and when saying no, you should use the power of the law. Let the insurance company know that they performed an adverse benefit determination when asking to have the original health benefit payment returned to them and that they should have contacted the patient because the regulation allows the patient with the ability to appeal their ABD. The United States Supreme Court allows the patient with the ability to file a lawsuit in Federal Court. So you instruct them (the insurance company) to stop sending you refund demands and to send them to their member. This is how you fight back. No is very powerful with ERISA, but they expect that you won't say no. If you do say no, they will be shocked but they will try to come back and with an attitude, but just keep saying no.

The insurance company may try to intimidate you by telling you that if you don't return the money that they are demanding, that they will take it back from a claim that they are processing. As I showed, State law may help stop this when the law specifies that you prohibit them from doing this by writing and telling them that they cannot take the money back, but you have a time limit to do this. In this case, procrastination doesn't work on your behalf. Waiting to see what happens will work against you. I once had a secretary whose desk was immaculate. She had no inbox and I asked her for her secret. She responded that she touches all correspondence once and if an answer is required, she provides it immediately. I've followed her advice and it works. When I receive anything in the mail that demands a response, I write it immediately and then I file the document in my tickler file so that I can see if they responded in a timely manner. When I tell the insurance company "no" to their refund demand, I look to see if they continue to respond and they might, hoping that you will give up and write a check, but, I don't write checks once the claim has been paid and adjudicated correctly. If they overpaid, I ensure a refund of the overpaid amount is returned to them immediately.

If the insurance company threatens me with offsetting or reducing the refund amount, you can look at ERISA to see what it says, but, ERISA has no such language which outright prohibits offsetting or reducing. If ERISA doesn't prohibit them from taking the money back, what good is ERISA? ERISA does prohibit them, but not outright. As I showed, when they demand the return of the health benefit payment, they are performing an adverse benefit determination. If the insurance company offsets or reduces, they will do so from a claim for a different patient.

ERISA is patient based, so if they want the benefit payment back on a claim they paid for Steve Verno and you denied their request they may not have a claim for Steve Verno which they might use for an offsetting or reduction, so they go after a claim for another patient. If they offset or reduce a claim you sent for Mary Jones, that too could be classed as an adverse benefit determination because now they are not paying the health benefit for Mary Jones under HER health benefits. Using common sense, when they perform an ABD on the benefit payment for Mary Jones (by reducing or offsetting the benefit payment) they should notify Mary Jones so that Mary Jones can also appeal, hire a lawyer or take the insurance company to Federal Court. So, basically, the insurance company isn't just violating Federal law once by bypassing the patient, they could be doing it again with other patients, so we have to nip it in the bud by saying "No!" We can use the regulatory agencies to enforce our "No!"

With a State law claim issue, the State Insurance Commissioner might be able to intervene and investigate the State Law claim refund issue. With ERISA being a Federal law issue, the State Insurance Commissioner may contact you to inform you that they have no jurisdiction with ERISA benefit matters. I learned this early with my ERISA education. My letters to my State Insurance Commissioner came back telling me that they have no jurisdiction regarding the health benefit issue itself. But, can you use your State Insurance Commissioner? Possibly but how? I will show you and it is very simple.

Insurance companies sell policies or sell health insurance through a license issued by or through the approval of the Insurance Commissioner's office. The health benefits that the insurance company may be selling may be regulated in a State Insurance Law, again, selling, not paying the payment of the ERISA health benefit is under Federal law jurisdiction as I showed in 29 CFR 2560-503-1. As an example of a health benefit provision requirement, State law may mandate that emergency care be provided as a basic health benefit when health benefits are sold. If the insurance company is going to retroactively deny those benefits that they are selling, common sense tells us, why allow them to continue to sell those benefits if they aren't going to pay those benefits? What would happen if a used car salesman was licensed to sell cars and every car that they sold was a lemon, how long would the car salesman be in business with complaints made to the State regulators and from lawsuits resulting from injuries due to the unsafe cars? ERISA being a Federal law which regulates employee health benefits is under the jurisdiction of the Federal Government office of the Secretary of Labor. This is why I use my State Insurance Commissioner in the grievance process, NOT due to the refund of the benefit payment but as a tool for the benefit that was sold. Insurance companies don't like it when they cannot sell insurance because now it costs them money. If they sell stock, then the stockholders are affected.

Last, when you fight back using State Insurance law and the insurance company now informs you that this is an ERISA issue, they've opened the door to your using ERISA to do more than deny their refund demand. They opened the door to using ERISA with every claim benefit payment they made for their members. ERISA regulates the benefit payment. As the poster mentioned, there is a 60/40 plan. This could mean that the insurance company pays 60% of the claim and the patient pays 40% of the claim and an unknown item is did they pay the claims at 60% or are they supposed to pay 100% of the claim? To find this out, you need to look at the patient's benefit manual. If I have proof that they were supposed to pay 100% of the charges, then that is what I'm going to go after and now I have ERISA as my tool to fight back. I can report the insurance company to the Department of Labor as a possible violation of Federal law, the patient could sue the insurance company in Federal Court for not paying their benefit correctly and the patient's employer could terminate the policy and find another insurance company for their employees.

An employer I once worked for found that the insurance company did not pay our claims and would deny us healthcare for frivolous reasons. In simple terms, they became too big and thought that nothing would be done, but my employer terminated the policy and some of my fellow employees sued them. You, the patient have more power then you realize.

As I've shown you, a simple question asked on the internet may be more complicated than originally thought.

Never give up. Never surrender!

Steven M. Verno, CMBS, CEMCS, CMSCS, is a Professor of Medical Coding and Billing Instruction at Florida Metropolitan University.