Practice Management Alert

What you don't know about ERISA could be costing your practice big bucks

If just the mention of Employee Retirement Income Security Act (ERISA) claims makes your head spin, you-re not alone. Many billers think filing an ERISA appeal is complicated and confusing. Part of the confusion about ERISA appeals comes from confusion as to what constitutes an ERISA payer. Your appeals success rate, however, depends on understanding ERISA and ERISA payers.

"The reason why billers are unsuccessful with their appeals is because of their lack of knowledge of ERISA," says Steven M. Verno, CMMC, CMMB, NREMTP, professor of medical coding and billing instruction at Everest Uni-versity. With these expert tips under your belt, you can put yourself on the winning side of the appeals process.

Start With the Basics of ERISA

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 does not include Medicare or Medicaid carriers.

Many misinformed people think that ERISA only applies to self-funded health plans, but that is not true.

Specifically, "an ERISA claim is any private-sector employer-sponsored plan," says Jin Zhou, president of the ERISA Claim Institute of America and founder of the http://www.erisaclaim.com Web site. "For non-Medicare claims, 80-90 percent of the claims will fall under ERISA." You can verify this online at the Department of Labor's Web site at http://www.dol.gov/dol/topic/health-plans/erisa.htm.

Keep in mind: 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. "When the physician's office calls, for example, UHC, with whom they are participating providers, UHC will confirm the patient's coverage and verify eligibility. However, UHC (and other insurance companies) will often neglect to tell the physician's office that yes, while the patient is covered, it's an ERISA plan and the patient is covered only in an office downtown or within a certain-mile radius from their workplace," says Leslie Johnson, CCS-P, CPC, manager/consultant of Coding & Compliance for DR Management in Fort Wayne, Ind.

Follow the SPD Closely

Your first step in filing an ERISA claim is to dig into the summary plan description (SPD), which every insured patient receives. An SPD describes the terms of the healthcare contract between the patient and the insurance company. "It tells what services are allowed versus what aren't and where and with whom," Johnson says. The SPD also names the plan's administrator(s), who ultimately reviews any appeals.

Getting a copy of the SPD should be your first step, Zhou says. This ensures you know what the plan covers. "The Labor Department even recommends this as your first step in filing an ERISA claim," Zhou adds. You can either get a copy from the patient or request a copy of it from the insurance company.

Become the Patient Representative

The second key to successful appeals is to have the patient designate your practice as her representative for insurance purposes. "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," Verno says. You can also request a copy of the SPD on behalf of the member when he designates your practice as his representative. You can complete this designation when the patient signs his assignment of benefits to your practice.

Why: The physician, practice or biller needs to become the patient representative because ERISA protects the patient. Unless the patient states that someone else represents him, no one else will have standing. 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 ex-plains 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, Verno says. "The provider or medical biller can appeal only if the member gave written permission for the provider or medical biller to represent him with the appeal process," he adds.

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

Beware: If you, as the medical biller, act as the patient's representative, you need to follow the appeal process laid out in the SPD to the letter. "Any action taken by a medical biller can be used in a court of law, so if the biller doesn't know what he/she is doing, any appeals in Federal Court could have disastrous effects," Verno says.

For more information: To learn more about ERISA, sign up for the one-hour audioconference "The Basics of ERISA -- a Little-Known Key to Appeals Success," presented by Steven M. Verno, CMMC, CMMB, NREMTP, on March 27 at 11 am EST. Visit http://www.audioeducator.com/industry_conference.php?id=809 for more details. Get 10 percent off by using this coupon code at checkout: MOB10PERCENT.