ERISA and How to Use it for Appeals

The federal government established ERISA in an effort to protect citizens’ interest in their pension plans. The law was enacted in 1974 and has been ratified three times with the last being the inception of the affordable care act in which health insurance and disability protection rights were added or extended. The Consolidated Omnibus Budget Reconciliation Act of 1985 and the Health Insurance Portability and Accountability Act of 1996 were added to the regulation to provide further protections. Within the regulations is language that states that any insurance plan that is purchased through an employer gains protections of the act. The importance of this regulation falls within the ability of a beneficiary and by delegation of consent a healthcare provider to obtain information free of charge of an adverse determination under penalty of law.

The employer and review agent must provide the information, which includes how the decision to deny coverage is made, a copy of the patients benefit plan (summary plan description), the information that was used to make the decision (including any internal policies), the name and specialty of the physician making the decision, and a full explanation of the denial, including the appeal process. The author has seen insurance companies provide an explanation of benefits (EOB) as the only communication of the denial in a line-item format, with a code stating that the denial was based on a lack of medical necessity, which is a violation of the ERISA statutes that preempt any state law in the interpretation of the plan.

Consider the following letter as a case study. The patient names and any identifying information have been redacted, but this is a real case in which a full reversal of the denial was achieved.

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XYZ Insurance Company

Main Street

Anywhere, USA 12345

REGARDING:

MEMBER ID:

DOB:

DOS:

Dear Medical Reviewer:

Please accept this as an appeal in response to your adverse determination per the explanation of benefits denying the procedure of surgical implantation of a permanent percutaneous dual-lead dorsal column stimulator for your member. Your denial letter states this service does not meet medical policy criteria. We respectfully disagree.

Ms. Doe was diagnosed with atypical complex regional pain syndrome of the abdomen complicated by atypical thoracic radiculopathy. She has a past surgical history of three cesarean sections and an exploratory laparotomy for endometriosis. She presented to the pain management specialist, Dr. Smith, with an examination resulting dermatomal and nondermatomal patterns of pain from level T-6 through T-10/T-11. She also had skin manifestations to the abdomen in the form of blisters and ulcerations comparable with CRPS. She had trialed and failed multiple treatments consisting of multiple injections, neuro blocks and hyperbaric oxygenation. She had undergone sympathetic blockades without long-term improvement. The medications Ms. Doe required for analgesia were Oxycodone 40 mg QID, Oxycontin 80 mg QID, Baclofen 20 mg QID, Celebrex 100 mg BID, Valium 30 mg QD, Methotrexate, and alternating doses of Tylenol and Ibuprofen and Ambien and Benadryl every night. Ms. Doe underwent a series of splenchnic nerve blocks with improvement of pain lasting five to seven days. On 06/25/2007 she underwent a surgical implantation of a percutaneous dual-lead dorsal column stimulator for trial to target the level of T5 through T8, which has primary control over the abdominal viscera and abdominal contents. She presented to ABC Hospital on 07/23/2007 for the procedure of fluoroscopic guided insertion of permanent electrodes of dorsal column stimulator and insertion of permanent subcutaneous extension with placement of a 16-channel rechargeable pulse generator. This permanent dorsal column stimulator was done as she reports a 50%–75% improvement in pain-level status post implantation of the trial dorsal column stimulator. Per Dr. Smith’s assessment, Ms. Doe also has improvement with almost total resolution of the percutaneous lesions and ulcerations of her abdomen since the trial procedure was performed on 06/25/2007.

The National Institute of Neurological Disorders and Stroke defines complex regional pain syndrome as a chronic pain condition with the key symptom of continuous, intense pain out of proportion to the severity of injury/invasive procedure, which gets worse rather than better over time (taking into account Ms. Doe’s multiple abdominal surgeries). The institute describes typical features as dramatic changes in color and temperature of skin over the affected limb or body part (it does not describe affected areas as restricted to the extremities), accompanied by intense burning pain, skin sensitivity, sweating, and swelling (reference: www.ninds.nih.gov). Per the National Pain Foundation, the definition of pain can be “a disease in and of itself that needs to be diagnosed and managed as comprehensively as any other disease” (reference: www.nationalpainfoundation.org). In an article dedicated specifically to the diagnosis CRPS and evaluated by its peer review committee, the National Pain Foundation states, “The traditional thinking was that techniques designed to treat SMP, such as sympathetic blocks, were the only interventional strategies available. We now know that this is incorrect; however, as in many areas of medicine, new research and teaching has not yet caught up with many regional practice patterns.” The article goes on to state “spinal cord stimulation can be of considerable help in CRPS. SCS is generally first offered on a temporary basis and, if successful, is then used on a more permanent basis through surgery” (see enclosed article). An article written by Allen W. Burton, MD, Department of Anesthesiology and Pain Medicine at MD Anderson Cancer Center in Houston Texas, a contributing author to the Reflex Sympathetic Dystrophy Association, states “Over time, much research and clinical experience has provided evidence that CRPS is a posttraumatic painful neurologic and inflammatory syndrome involving the somatosensory, sympathetic, and often the somatomotor systems” (see enclosed article). The article outlines the interventional pain treatment algorithm for CRPS encompassing a progression from minimally invasive therapies (i.e., sympathetic nerve blocks previously undergone by Ms. Doe without long-term success) progressing to more invasive therapies (i.e., neurostimulation). The article continues, stating, “existing data is positive in terms of pain reduction, quality of life, analgesic usage and function.” In a study of 36 patients with advanced stages of CRPS (at least two years in duration), resulted pain levels averaged 53% better, which is “statistically significant.” The article further reports a decrease in analgesic consumption in the majority of patients. The article further states, “The authors concluded that in the late stages of CRPS, neurostimulation (SCS or PNS) is a reasonable option when alternative therapies have failed,” as is the case with Ms. Doe.

The explanation of benefits notes this claim is denied as it does not meet medical policy criteria. Per review of Policy Number: 7.01.51, Subject: Spinal Cord Stimulation, it is stated “Based upon our criteria and review of the peer-reviewed literature, spinal cord stimulation has been medically proven to be effective and, therefore, medically appropriate for treatment of patients with severe and chronic nonmalignant pain of the trunk and limbs that is refractory to all other pain therapies.” Ms. Doe does meet your policy guidelines inclusive of “the treatment is used only as a last resort. Other treatment modalities (pharmacological, surgical, psychological, or physical, if applicable) need to have been tried and failed or have been judged unsuitable or contraindicated, demonstration of pain relief with a temporarily implanted electrode needs to precede permanent implantation. Patients are to be carefully screened, evaluated, and diagnosed by a multidisciplinary team prior to application of these therapies. All the facilities, equipment, and professional and support personnel required for the diagnosis, treatment, and follow-up of the patient need to be available.” This policy had been revised last 04/19/2007, just prior to Ms. Doe undergoing these procedures.

Please note, we at ABC Hospital have not received a proper denial letter to date regarding this claim, as is our right under both the Public Health Law Article 4900 §4903 and the ERISA statute:

§4903: Notice of an adverse determination made by a utilization review agent shall be in writing and must include:

(a) The reasons for the determination including the clinical rationale, if any;

(b) instructions on how to initiate standard and expedited appeals pursuant to section forty-nine hundred four and an external appeal pursuant to section forty-nine hundred fourteen of this article; and

(c) notice of the availability, upon request of the enrollee, or the enrollee’s designee, of the clinical review criteria relied upon to make such determination. Such notice shall also specify what, if any, additional necessary information must be provided to, or obtained by, the utilization review agent in order to render a decision on the appeal.

Per ERISA:

When a plan administrator denies a claim for benefits in whole or in part, ERISA §503 and Labor Regulations Section 2560.503-1(g) require that a plan administrator must provide participant and beneficiary with written notice including all the following information in a manner calculated to be understood by the claimant:

(g) Manner and content of notification of benefit determination.

(1) Except as provided in paragraph (g)(2) of this section, the plan administrator shall provide a claimant with written or electronic notification of any adverse benefit determination. Any electronic notification shall comply with the standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv), or with the standards imposed by 29 CFR 2520.104b-31 (for pension benefit plans). The notification shall set forth, in a manner calculated to be understood by the claimant -

(i) The specific reason or reasons for the adverse determination;

(ii) Reference to the specific plan provisions on which the determination is based;

(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

(iv) A description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review;

(v) In the case of an adverse benefit determination by a group health plan -

(A) If an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the claimant upon request; or

(B) If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant's medical circumstances, or a statement that such explanation will be provided free of charge upon request.

(vi) In the case of an adverse benefit determination by a group health plan concerning a claim involving urgent care, a description of the expedited review process applicable to such claims.

(h) Appeal of adverse benefit determinations -

(1) In general. Every employee benefit plan shall establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse benefit determination.

(2) Full and fair review. Except as provided in paragraphs (h)(3) and (h)(4) of this section, the claims procedures of a plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless the claims procedures -

(i) Provide claimants at least 60 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;

(ii) Provide claimants the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;

(iii) Provide that a claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to paragraph (m)(8) of this section;

(iv) Provide for a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(3) Group health plans. The claims procedures of a group health plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless, in addition to complying with the requirements of paragraphs (h)(2)(ii) through (iv) of this section, the claims procedures -

(i) Provide claimants at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;

(ii) Provide for a review that does not afford deference to the initial adverse benefit determination and that is conducted by an appropriate named fiduciary of the plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual;

(iii) Provide that, in deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate, the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment;

(iv) Provide for the identification of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant's adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination;

(v) Provide that the health care professional engaged for purposes of a consultation under paragraph (h)(3)(iii) of this section shall be an individual who is neither an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual; and

(vi) Provide, in the case of a claim involving urgent care, for an expedited review process pursuant to which -

(A) A request for an expedited appeal of an adverse benefit determination may be submitted orally or in writing by the claimant; and

(B) All necessary information, including the plan's benefit determination on review, shall be transmitted between the plan and the claimant by telephone, facsimile, or other available similarly expeditious method.

(https://www.govinfo.gov/content/pkg/CFR-2016-title29-vol9/pdf/CFR-2016-title29-vol9-sec2560-503-1.pdf)

We expect that after a thorough review of the clinical data of this medical record a reversal of the denial will take place and authorization for the admission will be forthcoming. The ABC Hospital does concur with XYZ Insurance Company that the main goal is for Ms. Doe to receive a quality and effective level of care. We do not feel this could have been established without the procedure, surgical implantation of a permanent percutaneous dual-lead dorsal column stimulator. If further information is needed, please feel free to contact me. We are also requesting a copy of all medical policies and criteria that your determination is based on, along with the credentials of the medical reviewer rendering this medical necessity review as is our right under the Public Health Law article 4900 § 4903.

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ERISA is a powerful tool that can used to overturn appeals in a manner that is not common and not fully used by many in healthcare. Many focus on Managed Medicare and Managed Medicaid or use the typical appeals processes for commercial insurance denials. Under ERISA availing yourself to the beneficiary’s summary plan description can also lead to uncovering the benefits that are covered under their plan that many times are denied as non-covered when in fact they are. There are many ways to write ERISA based appeal letters the above is but just one example. The author has written over 20 different types including sending requests to the employer, unions and others that are the fiduciary of the plan itself to obtain the SPD who in turn at times have instructed the insurer to pay the claim directly. While ERISA may seem daunting at first it is not, it simply lays the foundation for what the insurer must do when they determine they will deny a claim for a pre-service, urgent, concurrent or post-service request. It lays out the timeline of when they must respond as well as the way they need to do so. It provides the framework of the information that the denial letter (adverse determination) must contain including the appeal information. It also provides the timeline that the beneficiary must respond. It provides the beneficiary with protection under the law to obtain information from not only the insurer but from the fiduciary (plan administrator) under penalty of law. Willful ERISA violations can even result in criminal prosecution. The maximum criminal penalties for ERISA violations include up to 10 years in jail and fines of up to $100,000. Companies charged with ERISA violations can face criminal fines of up to $500,000, in addition to any civil liability.

Recently there has been an increase in plans down-coding E/M charges for ED visits from level 5 to lesser levels without providing an adverse determination and without reviewing the medical record. This is a clear violation of ERISA if the plan is one that falls with the ERISA protection. The following is from an ERIA FAQ:

C-12: If a claimant submits medical bills to a plan for reimbursement or payment, and the plan, applying the plan's limits on co-payment, deductibles, etc., pays less than 100% of the medical bills, must the plan treat its decision as an adverse benefit determination?

Under the regulation, an adverse benefit determination generally includes any denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit. In any instance where the plan pays less than the total amount of expenses submitted with regard to a claim, while the plan is paying out the benefits to which the claimant is entitled under its terms, the claimant is nonetheless receiving less than full reimbursement of the submitted expenses. Therefore, in order to permit the claimant to challenge the plan’s calculation of how much it is required to pay, the decision is treated as an adverse benefit determination under the regulation. Providing the claimant with the required notification of adverse benefit determination will give the claimant the information necessary to understand why the plan has not paid the unpaid portion of the expenses and to decide whether to challenge the denial, e.g., the failure to pay in full. This approach permits claimants to challenge whether, for example, the plan applied the wrong co-payment requirement or deductible amount. The fact that the plan believes that a claimant's appeal will prove to be without merit does not mean that the claimant is not entitled to the procedural protections of the rule. This approach to informing claimants of their benefit entitlements with respect to specific claims, further, is consistent with current practice, in which Explanation of Benefits forms routinely describe both payable and non-payable portions of claim-related expenses. See § 2560.503-1(m)(4). (US Department of Labor - Benefit Claims Procedure Regulation FAQs)

As stated above ERISA is a powerful tool that should be used in an appropriate manner and can be a true weapon to overturn denials and hold insurance agencies accountable to the laws that were created for them to follow.