By: Michael M. DiCicco ([email protected])
In 1997, Congress enacted the Employee Retirement Income Security Act (“ERISA”). ERISA sets standards for health plans created by employers, unions, and other private entities that provide medical coverage for workers. Today, ERISA health insurance is the single largest segment of the United States health insurance market. As an incentive for private parties to provide medical benefits through these privately funded health plans, Congress provided significant tax benefits for private parties that create the plans. Congress also afforded the administrators of the private health benefit plans wide discretion in deciding questions under the plans, including whether the medical treatment sought is covered by the plan and the amount to be paid to the health care provider for the medical services.
The typical ERISA medical benefits plan provides that the initial determination of a claim seeking coverage for a service and the amount to be paid for the service is determined by the plan administrator, typically an insurance company like Aetna or Cigna. Often the claim is filed by a physician on behalf of the patient and is based on the treatment notes of the physician and other medical records. If the claim is denied, the patient is entitled to appeal the denial, usually on two levels. The first level appeal is labeled an “internal appeal” and is decided by a different person than the initial reviewer but still by the plan administrator. The second level appeal is labeled an “external appeal” and is decided by an independent analyst hired by the administrator. In both appeals, the patient generally relies on the same treatment notes and medical records submitted with the initial claim.
The plan administrator and the independent analyst have broad discretion in deciding whether the claim is covered and how much should be paid. They have at their disposal medical literature and professionals who will provide them with the “evidence” they need to deny a claim. That evidence includes scholarly articles and peer reviewed studies. Patients rarely submit persuasive evidence other than medical records and treatment notes to support the patients entitlement to treatment and payment. But this evidence often does not contradict the scholarly articles and peer reviewed studies relied on by the administrator and independent analyst, resulting in the claim and appeal being denied. Patients are legitimately skeptical as to whether they are being treated fairly and their claims considered without bias.
Once the appeal process is concluded, the patient has the right to file a lawsuit in federal court as a plan enforcement action under ERISA which seeks to recover benefits under the plan. Problematically, for the patients, however, the plan enforcement action is limited to the evidence that was presented with the original claim and during the internal and external appeals. Once the matter proceeds to court and the patient engages an attorney, the deficiency of the patient’s evidence becomes manifest and the patient seeks to submit additional relevant evidence supporting the claim. A patient is surprised to learn that additional evidence cannot be considered by the court. Only the evidence initially submitted with the claim and in the internal and external appeal may be considered by the court.
To succeed on these claims, patients and their physicians need to submit compelling evidence like scholarly articles, peer reviewed studies, expert reports by distinguished physicians and medical coders, with the initial claim submission and during the appeal process. That evidence must be submitted then so that it may be used eventually in a court proceeding. Maggs McDermott & DiCicco, LLC has years of experience in obtaining and presenting evidence that supports claims by patients and physicians under private medical plans governed by ERISA. We put our clients in a position to prevail on their claims and to win their appeals and plan enforcement actions rather than settle for pennies on the dollar.