New Federal Health Claims & Appeals Laws
for 193 Million Americans
Obama Signing Health Bill on
Gerald R. Ford Signing ERISA on 09/02/1974
Seminars & Certification Classes Announced for New Federal Health
Claim Appeals Regulations on July 22, 2010 from HHS, DOL & IRS,
Effective On Sept. 23, 2010 for 193 Million Americans
DEPARTMENT OF LABOR
(Links to DOL)
©2010, Jin Zhou, ERISAclaim.com
Statutory Laws [PDF]
Employee Retirement Income Security Act — ERISA
Seminars & Certification Classes for New Federal Health Claim Appeals
- Free Webinars - New Federal Claims & Appeals Regulations, Effective
Sept. 23, 2010, for 193 Million Americans
ERISAclaim.com: Seminars - 2010 Two-day
Basic ERISA Appeal Seminars - Denials and Overpayment Appeals
ERISAclaim.com - 2010
PPACA & ERISA Claim
Specialist Certification Programs in Chicago, Illinois
ERISAclaim.com: Create An Appeal
Department for Your Hospital or Practice
(In-house, onsite ERISA Claim Specialist Certification Programs)
ERISA Question of the Week
PPO? About Money!
© 2004 Jin Zhou, ERISAclaim.com
Many members have asked a similar
question, how can a provider become an authorized representative under ERISA
to appeal on members behalf, does this provider have to be a participating
provider with a PPO contract or HMO contract with the plan, network or TPA?
This is a very popular question and
mostly misunderstood, as many providers mistakenly believed that as a
participating provider with a managed-care contracting with a TPA, a network
or the plan directly, such provider will be automatically eligible or
recognized as an authorized representative under ERISA to appeal, if a
provider is not contracting with the payor, or network, this provider cannot
appeal under ERISA on behalf of the patient even with ERISA recognized
authorized representative designation form.
This is completely wrong.
1. Whether a claim is governed by
ERISA is determined by the plan sponsor and type of the plan under federal
law. In general, if your patient obtained health-insurance/benefits from
employment in private sector, this claim will be ERISA claim. In this
regard, ERISA law equally applies to both self-insured plan or
fully-insured plan where the employer purchased an insurance policy from an
2. A traditional assignment of
benefits form used by most of us in past 30 years across USA, and a PPO
participation do not grant an authority to the provider to appeal on patient
behalf under ERISA, except for receiving benefits directly from the plan, if
they're coming. (DOL FAQ B2)
3. A PPO participation or
contracting has nothing to do with ERISA authorized representative practice,
except for such PPO contracting will create a contractual right between the
provider and PPO network, but not between provider and an ERISA plan, which
may establish some rights for provider to dispute with plan payment of PPO
discount only, but and unless
4. Unless or until entitlement of an
ERISA benefits claim or denial is completely resolved, or there is no
genuine dispute over benefits claim, a provider PPO contracting right can
not be triggered, because any dispute or lawsuit concerning remedy of
benefits denial from an ERISA regulated, private employer-sponsored health
plan falls completely under ERISA, and your PPO dispute or state law claim
is completely preempted by ERISA, according to US Supreme Court unanimous
ruling on 06/20/2004 in Aetna v. Davila.
5. In a simple explanation, if your
dispute is about money, or ultimately about money, claim payment from an
ERISA plan, you are disputing under ERISA, not PPO, or anything else but
6. Regardless if you are
participating or nonparticipating, even there is no benefits or coverage,
under ERISA new claim regulation, a patient may freely designate his/her
authorized representative to appeal a claim denial, while an ERISA plan may
verify such designation and authorization, but may not interfere or prohibit
such free designation from an ERISA participant or beneficiary.
7. Although as a past industry
practice for some insurers not to send payment checks to nonparticipating
provider, and prior to ERISA claim regulation taking into effect on January
1, 2003, a plan must recognize, and may not prohibit, regardless of benefits
coverage or provider participation, a patient, plan participant or
beneficiary from freely designating health-care provider as his/her
authorized representative under ERISA to appeal, again even there is no
benefits coverage at all (it's called colorable claim under ERISA), or
provider nonparticipating in the network.
8. Once a provider has appropriately
obtained sufficient authorization to become an authorized representative on
behalf of a patient, the plan must treat such representative as if the
patient is appealing, as good as patient, for whatever the patient is
legally entitled to, such as receiving payments, plan coverage information,
notification and appealing, for the purpose of ERISA claim regulation.
9. It is important to understand
that ERISA, as a federal law, completely governs and regulates any dispute
or lawsuit as long as you want money from an ERISA plan,
health-insurance/benefits from employment in private sector, and ERISA
supersedes and invalidates any state laws, PPO contracts HMO contracts and
any third-party contracts, as long as your dispute is about money from an
ERISA plan, according to US Supreme Court unanimous ruling on June 20, 2004,
Aetna v. Davila, and as recent as a California class-action lawsuit Ninth
Circuit ruling regarding California state law in reference to ERISA plan,
CLEGHORN V BLUE SHIELD OF
10. If a provider or his billing company, disputes money
payment with and from an ERISA plan, regardless of its shape, PPO, HMO, POS,
EPO or P4P (Pay for Performance), despite provider's participation, the
provider must understand ERISA regulation and become an authorized
representative under ERISA. However if your dispute is only about PPO
discount or HMO capitation, and there is no ERISA dispute at all, your PPO
and HMO contracts will be the governing document, and your applicable state
law will be the choice of law for your dispute.
(PASCACK VALLEY HOSPITAL, INC.
v LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN
(3rd Cir. 11/01/2004)
For more additional information in the subject, please
© 2004 Jin Zhou, ERISAclaim.com
Question: We have
received many overpayment refund requests from insurance companies and
managed-care plans, most of them are for medical necessity and policy
noncoverage, from the employer-sponsored plans. What rights do we have
as participating providers or non-participating providers under ERISA?
Answer: In general, if
overpayment requests are concerning benefits payment, instead of PPO
discount, regardless if these requests are based on policy exclusion
or medical necessity, or computer errors, these requests or disputes
are governed by ERISA if your patients obtained health
insurance/benefits from employment in private sector, because these
disputes are ultimately concerning money, benefits denial,
retrospectively, fall completely under ERISA.
If your patients obtained
health insurance/benefits from governmental plans, individual
policies, and religious entity owned or governmental affiliated school
plans, ERISA regulation will not be applicable to your overpayment
If the overpayment requests
were based on provider discount, duplicate payments, mistaken identity
or payments to wrong party, your dispute will not be governed under
ERISA, as there is no ERISA question of facts and law, or there's no
party from an ERISA plan involved.
Every entity must comply with
ERISA claim regulation in requesting overpayment refund, overpayment
recoupment and appeals, if ERISA jurisdiction is triggered. For more
information on specific steps to be taken under ERISA to appeal
overpayment request dispute, please visit ERISAclaim.com:
ERISAclaim.com - "Overpayment" Refund Request
Response & Appeals <http://erisaclaim.com/overpayment_refund.htm>
PPO, No Pay Checks! ERISA Again?
© 2004 Jin Zhou, ERISAclaim.com
have had a lot of bad news lately with our reimbursement, first we
were told we cannot appeal claim denials because of ERISA, then we've
had a lots of overpayment refund request from many insurance companies
and employer-sponsored plans, now we are told they won't send any
payment checks to us anymore because we are not participating with the
network, which usually reduce our bills for more than 60% or no
payment at all for longtime. We were told they can do this because of
Do we have any rights or protections under ERISA to receive
reimbursement payment checks if we're not participating providers?
We would really appreciate your help on this, because for those
health-care plans we are participating, our reimbursement has gone
down beyond breaking point, that's why we quit some of those networks.
Now we won't get any checks at all, it is a disaster.
Answer: Sorry to hear your bad news, your question and experience
are very popular nowadays in managed-care industry.
I have bad news and good news for you too.
Bad news is that it is true that under ERISA, prior to the new
ERISA claim regulation taking to effect January 1, 2003, ERISA law
does not have a clear standard on this issue of assignment of
benefits, and federal courts have had different rulings on this issue
of assignment and anti-assignment as well as enforceability of
assignment of benefits payment, therefore a plan may have
anti-assignment provision in the plan document and such
anti-assignment provision could be enforceable.
However, new ERISA claim regulation, went into effect January 1,
2003, has changed all of this for all ERISA plans. New regulation
clarifies for the first time on whether or not the plan can have a
provision prohibiting assignment of benefit, and clarified or revised
ERISA claim regulation to prohibit any plan from any anti-assignment
practice, to allow claimants freely designate health-care providers to
be their representative for the purpose of ERISA claim regulation,
while the plan may verify, but not interfere or prohibit claimants
from such free designation of authorized representative. [ERISA Final
Regulation, page 70255]
To be more specific and clearer on whether ERISA regulation
provides a specific protection and answer to your questions, DOL
issued enforcement and compliance guidance/FAQ B2 and B3 to clarify
whether you can receive reimbursement checks and appeal as well as
notification of claim adjudication:
"B-2: Does an assignment of benefits by a claimant
to a health care provider constitute the designation of an authorized
No. An assignment of benefits by a claimant is
generally limited to assignment of the claimant’s right to receive
a benefit payment under the terms of the plan. Typically,
assignments are not a grant of authority to act on a claimant’s behalf
in pursuing and appealing a benefit determination under a plan. In
addition, the validity of a designation of an authorized
representative will depend on whether the designation has been made in
accordance with the procedures established by the plan, if any.
B-3: When a claimant has properly authorized a
representative to act on his or her behalf, is the plan required to
provide benefit determinations and other notifications to the
authorized representative, the claimant, or both?
Nothing in the regulation precludes a plan from
communicating with both the claimant and the claimant’s authorized
representative. However, it is the view of the department that, for
purposes of the claims procedure rules, when a claimant clearly
designates an authorized representative to act and receive notices on
his or her behalf with respect to a claim, the plan should, in the
absence of a contrary direction from the claimant, direct all
information and notifications to which the claimant is otherwise
entitled to the representative authorized to act on the claimant’s
behalf with respect to that aspect of the claim (e.g., initial
determination, request for documents, appeal, etc.). In this
regard, it is important that both claimants and plans understand and
make clear the extent to which an authorized representative will be
acting on behalf of the claimant." (Underlined added)
Clearly, DOL FAQ B2 says your traditional assignment will allow you
to receive the paychecks, but no authority or rights to appeal, if the
checks are not coming, or coming short or late, you cannot dispute or
appeal. DOL FAQ B3 says if you have a good assignment, you are as good
as patient in receiving paychecks and appealing/protection regardless
if you're participating or nonparticipating with networks.
No PPO or HMO contracts may create rights between provider and
ERISA plan, any state laws, PPO contracts, other than direct
designation from an ERISA plan participant and beneficiary under ERISA
may modify or eliminate ERISA benefits designation under ERISA, if PPO
contracts or any other state laws designed or attempted to interfere
or modify such ERISA designation of beneficiary and representative,
they will be preempted by ERISA as impermissible connection to ERISA
plan. (US Supreme Court,
As a practical matter, a traditional assignment of the benefit form
used by health-care providers in the past 30 years across USA will not
satisfy the requirements under new regulation, and they will need to
be coming into compliance if health-care providers want to become
authorized representatives, regardless if they are participating or
More importantly, in accordance with US Supreme Court unanimous
ruling on June 20, 2004 in Aetna v. Davila, anything has to do with
money from or with an employer-sponsored, ERISA regulated health plan,
ERISA controls and regulates everything, and your PPO contracts or
state laws will be completely superseded and invalidated, or preempted
by ERISA, if your dispute, cause of action from state laws sought to
remedy denial of benefits from an ERISA plan, or ultimately for money
from an ERISA plan.
DOL FAQ has been evaluated and affirmed by US Supreme Court "for
. . . operating claims processing systems consistent with the prudent
administration of a plan....Deference is due that view."
(Bold and underline added)
Black & Decker
Disability Plan v. Nord
U.S. Supreme Court, Decided 05/27/2003.
This would be very good news for you, clearly ERISA regulation
protects you from being excluded by anyone and any ERISA plan to
become an authorized representative on behalf of your patient to
receive benefits payment directly, to receive notification of claim
adjudication and to appeal claim denials and delays, if you are
clearly and correctly designated by your patient as an authorized
representative on the ERISA.
For more information on this subject, please visit our web site and
a monthly seminar pages.
OIG: Special Advisory Bulletin: Practices of Business
The Office of Inspector General (OIG), Department of Health and Human
Services, June, 2001
Due to the
recent demand from the
ERISA plans and TPA's, we're pleased to announce
that we also provide educational and consulting services to the ERISA plans,
TPA's and managed care organizations on
Federal Claim/ERISA Regulations and
Compliance, however we do not provide any services involving actual claim
dispute or legal advice for any legal matter or disputes.
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
"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."
Associations for Physicians, Hospitals, Health-care Providers
We are willing to work with any
associations with your co-sponsorship and significant discount for
tuitions and reference books. You may
telephone for more details.
Codified in Title 29 of the
Code of Federal Regulations:
2520.102-3 Contents of summary plan description.
ERISA in US CODE
$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 ERISA claim 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.
Opinion: Cutting Costs in Half Through Better Management is
Fantasy But Health Care Debate Is Real (The Hartford
Excerpt: "If a
talk on economics can have a $650 billion throwaway line,
Treasury Secretary Paul O'Neill delivered it.... "
insists the problem is not with people, but systems - systems
that invite medical errors, systems that penalize health care
professionals for making honest mistakes, systems that create
the mind-numbing complexity of reimbursement for providers,
systems that reward too much treatment and punish efficiency."
Cost Trends Shift
"The study said managed care probably has squeezed out all the
savings it can from the nation's health care system and that
employers are turning to other familiar devices such as
increasing premiums and co-payments to trim their costs"