Practice Management Alert

2 steps may be all you need to secure full payment on an underpaid claim

Wish you had a better and more legally accurate method of appealing claims with a noncontracted carrier? You need look no further than the appeals process laid out under the Employee Retirement Income Security Act (ERISA).

What claims fall under ERISA? The easiest way to tell if a patient's insurance plan falls under ERISA is to determine whether the plan is employer-based, says Steven Verno, CMBS, compliance director for the Medical Association of Billers based in Las Vegas. And this rule includes patients who get their insurance through their spouse's or other family members' employers. "Self-funded plans definitely fall under ERISA," he says. The only exceptions are Medicare and Medicaid, workers' comp, church employees, and state and federal employees (see ERISATitle 29 USC 18 1003[a-b]).

Why only noncontracted payers? If your practice is contracted with an insurance company, any problem with underpayment becomes a contractual issue based on your agreement with the payer, Verno says. ERISA provides rules when no contract governs payment.

How does the ERISA appeals process work? When you submit a claim to a noncontracted carrier, you deserve full payment for your charges. Under ERISA, if the carrier does not pay in full, this is known as an adverse benefit determination (ABD), Verno says. There's no way for you to know whether the carrier or the patient is responsible for paying the remainder of the claim because you don't have access to the terms of the patient-carrier contract. Therefore, you could balance bill the patient, but as a courtesy you should first request policy information from the carrier so you can appeal the underpayment, he says.

Editor's note: For a complete explanation of the ERISA appeals process, see "8 Steps Help You Win ERISA Appeals" in our March 2004 issue. To view a complete version of ERISA, visit www.benefitslink.com/erisa/crossreference.html.

Step 1: Ask the patient to make you his personal insurance representative. Under ERISA, a carrier is not legally obligated to correspond with you at all unless the patient signs a statement making you his personal representative for insurance purposes, Verno says. (For a sample personal representative statement, see our article "Add This Clause to Your Assignment-of-Benefits Form" in our March 2004 issue.) This signed statement legally obligates the carrier to respond when you ask for the information behind the ABD on your claim, he says.

Step 2: Send a letter requesting information. To generate a proper appeal, you must be able to review the details of the patient's insurance policy (the summary plan description, or SPD) and other information that went into making an ABD on your claim. Send the carrier a letter invoking ERISA and demand that the carrier send you the desired information (see our letter template).

Play ERISA hardball: Some carriers will give you a hard time and won't release any information without proof that you are the patient's personal insurance representative, Verno says. However, other carriers will see that you mean business and that you know about ERISA and they will pay on the rest of your claim. Many carriers would rather pay you than send you all of the requested information and expose the secrets of how they made your ABD, he adds.

This letter may be all you need to secure payment: Use the letter template, provided by Steven Verno, to request the information you'll need to fight an ABD under ERISA. If the carrier decides to pay up, great! If the carrier responds by sending the information you requested, you'll have all the ammunition you need to file a proper appeal.