Practice Management Alert

Your reimbursement problems get a dose of expert attention

What you don't know about the Employee Retirement Income Security Act (ERISA) could hurt your appeals efforts.

ERISA is a federal law governing insurance plans that are self-funded or paid for by an employer, including group plans, PPOs and HMOs. ERISA outlines a very specific procedure and timeline for appeals. A surprising number of billers know little or nothing about this legislation, says Quin Buechner, MS, M.Div, CPC, president of ProActive Consultants in Cumberland, Wis.

Since "almost 80 percent of non-Medicare and non-Medicaid claims fall under the jurisdiction of ERISA, having knowledge of this law will help with many of the denials we receive on a daily basis," says Steven Verno, CMBS, compliance director for the Medical Association of Billers based in Las Vegas.

Incorporate these expert steps into your appeals process next time you get denied on a claim that falls under ERISA:

1. Have the patient make your practice his personal representative for insurance purposes, Verno says. If a claim falls under the jurisdiction of ERISA, the law requires carriers to respond only to appeals from the patient or the patient's personal representative -- which often explains why carriers "ignore" appeals from a provider.

"A routine assignment-of-benefits form is not a legal document that makes someone a personal representative," Verno says. You need to include a special clause within your assignment-of-benefits form that details how your provider will represent the patient in insurance matters. Every patient should sign this clause just in case his claim falls under ERISA, adds Leslie Barlow, CSP, with B&L Specialty Team in Fruita, Colo.

Important: See "Add This Clause to Your Assignment-of-Benefits Form"  for an example of this clause.

2. Find out the name and address of the plan administrator or plan fiduciary for the payer you wish to file an appeal with. "Sending the letter to anyone else, such as the medical director, is a waste of time," Verno says. If you can't find this information, send the letter to the carrier's general address and demand that the letter be forwarded to the plan administrator or plan fiduciary.

3. Request a copy of the summary plan description (SPD) from the plan administrator. "This document tells you everything about the particular plan," Verno says. You should also ask for all the documents that were used to make the adverse benefit determination (ABD), as well as the name and specialty of the physician (working for the carrier) who made the ABD. Note: Anytime a plan under ERISA fails to pay 100 percent of the claim, it is defined as an adverse benefit determination.

Upside: Often carriers will actually pay in full after receiving this request. They realize you're aware of ERISA and would rather not reveal all of their decision-making documents and allow you to criticize their denial, Verno says.

4. Review the SPD and all other documents for material that will boost your appeal. For example: The SPD should contain a provision regarding any procedures that are noncovered -- if no such provision exists, and the carrier denied your claim as noncovered, you need to point this out in your appeal, Verno says. Also, if the credentials of the physician who made the ABD show he is not trained or board-certified in the medical specialty involved with your claim, question this in your appeal.

5. Submit your appeal to the plan administrator along with all your supporting documentation. Attach a copy of the document that gives you the right to be the patient's personal representative. Send your appeal by certified mail/return receipt and put the certification number on each page of the appeal, Verno says. The carrier then has 30 days to respond to your appeal.

6. Submit a second appeal letter if the carrier does not respond within 30 days of receipt of your appeal. Send this second appeal letter by certified mail and include a demand for a statutory penalty, Verno says. By law, a carrier's failure to respond within 30 days has a $100-per-day penalty that starts accruing after the 31st day.

7. Make a third and final demand to the plan administrator if you get no response to your second letter within 30 additional days. Send this third letter to the plan administrator's legal department, demanding statutory penalties and a judicial review of your claim, Verno says. Request that the carrier respond within two weeks.

The last straw: After the third appeal letter, you will have exhausted every appeals option under ERISA and have legal grounds to file a complaint or pursue a federal court case.

8. File a complaint with the Department of Labor (DOL) if the carrier still does not respond. Since ERISA is federal legislation, all ERISA claims fall under the jurisdiction of this agency, Verno says. However, it may still be helpful to file a complaint with the State Insurance Commissioner or State Attorney General because they can pass your complaint along to the DOL in a way that will get it noticed, Buechner says.

For more information on ERISA, visit www.erisaclaim.com or http://http://www.dol.gov/ebsa/compliance_assistance.html.