Medicare Compliance & Reimbursement

If you don't learn the ERISA ropes, you could be losing out in the appeal stages.

If you don't know at least the basics of Employee Retirement Income Security Act (ERISA) claims, you're likely costing your practice big bucks in missed appeal opportunities. With more than 80 percent of non-Medicare claims falling under ERISA regulations, you stand to lose a lot by not knowing your stuff.

No need to fear: In this two-part series, our experts will answer your top ERISA questions and set you on the path to proper appeals.

ERISA is a federal law, enacted in 1974, governing insurance plans that are selffunded or paid for by an employer, including group plans, PPOs and HMOs. ERISA does not include Medicare or Medicaid carriers. ERISA was "originally designed to protect an employee's retirement benefits," explains coding, billing, and practice management consultant Steven M. Verno, CMBS, CMSCS, CEMCS, CPM-MCS, in Orlando, Fla. "Because employers were starting to provide healthcare as a benefit of employment, your healthcare benefits were added to the ERISA law."

Important: The recent changes in healthcare law put more emphasis on ERISA. Stay tuned for specifics on how the new legislation will affect ERISA and your practice.

Tip: When filing an appeal, remember that ERISA is a federal law and, according to Title 29, United States Code, Chapter 18, Section 1144 (a), ERISA supersedes any state regulations.

2. Which Insurance Plans Does ERISA Cover?

Many people think that ERISA only applies to self-funded health plans, but that is not true. Any employee benefit plan is included under ERISA law and there is no segregation by HMO, PPO, POS, IPA, etc., Verno says.

In fact, "82 percent of non-Medicare and non-Medicaid claims filed by physician offices are subject to ERISA," says Don Self, healthcare consultant and author in Whitehouse, Tex. So chances are good that your practice deals with several patient claims that fall under ERISA. The exceptions to ERISA include "any government health plan such as Medicare, Tricare, any state, county, and city government employees, and Medicaid," Verno says.

"Church plans -- including those working for businesses owned by the church -- are also exempt from ERISA."

Key: "As a provider or medical biller, we need to know how to use ERISA to get paid properly," Verno says. "We need to know how to use ERISA against the insurance company when they deny the claims or pay less than they are supposed to pay."

"Insurance carriers know ERISA and they know that 99 percent of medical offices are not as educated on ERISA as they should be," Self adds. "Insurance carriers know that the billing personnel do not know when insurancecarriers cannot recoup on a claim ... that many people working in medical offices will rely on state timely denial or state appeal laws that do not apply to more than 70 percent of the claims they file ... [and] that 97 percent of medical offices think they are filing an appeal, but in reality, they are filing 'challenges'" that the payer is not required to respond to.

Good practice: "Add a line to your intake forms," Verno suggests. You can include a section asking the patient to indicate who the plan sponsor is so that you know early on if the claims for the patient might fall under ERISA. You can check the patient's insurance card. Asking to see a patient's insurance card at every visit is good practice for many reasons, one of which is that you'll be able to easily see if a patient's plan likely falls under ERISA.

Example: A patient presents an insurance card that clearly states she is an employee at a regional supermarket chain and her insurance coverage is provided by her employer. The card says "Group Health Care Plan of Local Supermarket Stores." You can tell by looking at the card that this is an employer-provided insurance plan.

Alternative: When you go online to verify a patient's insurance benefits, check to see who the "sponsor" is, Verno advises. If you see that the sponsor is an employer, then the claim could fall under ERISA.

Pitfall: When you're verifying patient benefits, it's important to note that a patient can have an insurance card from a carrier such as Aetna or UnitedHealthcare, because these companies often underwrite and administer ERISA plans.

This answer is a major key to ERISA success or failure: Providers, billers, and practices have no rights under ERISA. The patient has all of the rights, including:

• The right to submit a claim for benefit payment.
• The right to appeal an adverse benefit determination.
• The right to full disclosure of what caused the adverse benefit determination.
• The right to appeal the ABD and to go to Federal Court.

Remember: "You have no claim with the insurance company," Verno warns. "The claim is the member's claim so that the member can be reimbursed for their out of pocket medical expenses (benefit). What you are doing is sending the claim as a courtesy to the member."

Since the appeal rights belong to the patient, not your practice, you need to get the patient's written permission to appeal a claim under ERISA. Under Federal Law, a provider or the provider's representative (medical biller) can appeal an adverse benefit determination without the written authorization by the member.

If a claim falls under ERISA jurisdiction, the law requires carriers to respond only to appeals from the patient or the patient's personal representative. This often explains why carriers "ignore" appeals from a provider.

Also, when there is an adverse benefit determination, the member, not the provider or biller, has 180 days from the date of the denial to submit an appeal.

Best bet: Get patients to agree to allow your practice to serve as their representative in insurance matters before you provide services. This way, if you have to file an ERISA appeal, you're already set up as the patient's representative by default.