ERISA or PPO? About Money!

 © 2004  Jin Zhou, ERISAclaim.com

06-15-2005

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 insurance company

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 ERISA.

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. § 2560.503-1(b)(4).

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. DOL FAQ B3.

For more additional information in the subject, please visit ERISAclaim.com:

 © 2004  Jin Zhou, ERISAclaim.com

06-16-2005

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 disputes.

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:

Jin

Jin Zhou

ERISAclaim.com

630-736-2974

 © 2004  Jin Zhou, ERISAclaim.com

06-17-2005

Question: We 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 ERISA.

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.

Please help!"

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.

Good news:

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:

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.

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.

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 nonparticipating providers.

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.

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.

Jin Zhou

ERISAclaim.com

630-736-2974

The Hearing at Senate Committee on Finance on 3-3-04, [View Video or Transcript (PDF) (KaiserNetwork.org)]  revealed the mechanism, nature and extent of ERISA failure and nonenforcement as the reasons for "Growth in Bogus Health Insurance Plans Targeting Desperate Small Business Owners", as being concluded as "No the results are not good. It’s a tragedy." by Ann Combs, assistant secretary of DOL. The mechanism, nature and extent of ERISA failure and nonenforcement as presented at the Hearing are universally true and applicable to all health care claim denials and delays in managed care environment from all employer sponsored health plans as the root of U. S. healthcare crisis.

 

This is a 911 call on "healthcare 9/11 disaster"!

THE 9/11 COMMISSION REPORT (pdf)