Use ERISA protections to your advantage, make insurers follow the law
The Employee Retirement Income Security Act of 1974 (ERISA) requires health insurers to respond to claims in a timely manner. Failure to do so can mean the claim is eligible for immediate payment, explains Richard J. Quadrino, JD, founding partner with the law firm of Quadrino Schwartz in New York City.
Quadrino offers the following explanation of how the ERISA rules apply and how a provider can respond to an insurer's violation:
- The insurer must pay or deny a claim within 30 days, or ask for additional information. The payer also can request a 15-day extension to this deadline. "They have to explain why they want the extension or more information," he says. "If you end up in court and they say you never provided documentation for why this was medically necessary, your response is that they requested it too late and therefore you did not need to provide it. And if that's the only grounds on which they denied the claim, all the other defenses are waived. It's too late to say it was coded wrong or unbundled."
- The insurer must provide specific reasons for any denial or partial nonpayment. Most explanation of benefit denials do not explain the insurer's position on why the care is not covered, Quadrino says. "They need to be specific and say where in the plan the treatment is excluded," he says. "If they say it is experimental, they have to cite the part of the plan that says it is not covered."
- A denial for medical necessity must be specific and include a scientific basis. "I've never seen them do it," Quadrino says. "The denials are defective all the time. If that's the only thing they've done in 30 days is say it's not medically necessary, and they didn't provide a scientific basis, that claim is payable. They can come up with something else 60 days or 90 days later, but that doesn't change anything."
- The payer must notify you of your right to obtain all relevant documents from the insurer regarding the denial or partial payment on a claim, and it must provide specific appeal rights and procedures. This requirement often is overlooked, Quadrino says. Don't be afraid to hold the insurer to the details of the law, just as it would hold you responsible for the fine print in its contract, he says. "You can ask for the e-mails from their doctor showing why it wasn't medically necessary or a copy of the journal article that they based their decision on," Quadrino says. "How can you appeal if you don't know what you're appealing?"