ERISA refers to the Employee Retirement Income Security Act of 1974. Originally intended to protect employee pension plans, ERISA covered health plans when employers began offering health benefits as part of employee benefits. ERISA governs life insurance, disability insurance and health insurance plans obtained through an employer engaged in commerce. It does not apply to employee health plans provided by governmental agencies (federal, state, county and city) and those provided by a church employer. Most Americans obtain healthcare benefits through private employers and most of these health plans are governed by ERISA.
ERISA has legal authority over:
- the claims process
- payment of health benefits
- the appeals process of a denied or improperly paid health benefit
Implications of ERISA for Patients
Though there are state laws regulating employee benefit plans, ERISA overrides many of these laws. If you have an employer-sponsored health insurance, life insurance, or disability insurance plan, it is most likely governed by ERISA. In these cases, there are several limitations in your rights to sue and be awarded damages under an ERISA-governed plan. You can sue such a managed care plan to obtain coverage or a test or procedure. However, you cannot sue for damages from a delay in getting care, even if it leads to suffering, injury or loss of life.
Implications of ERISA for Physicians
If you are a physician, the most important thing is to first determine if your patient has ERISA or non-ERISA health insurance. If your patient is covered under an ERISA health plan, you must be aware of ERISA regulations.
Problems arise when your patient’s ERISA claims are denied. Neither physicians (service providers) nor their medical billing company have any rights under ERISA. Only the patient or the patient’s legal representative has the right to submit a claim and appeal a denial or underpayment of a benefit. The claim pertains to the denial of health benefits to the patient, and as such, all appeal rights rest with the member of the plan – the patient. It is the patient who pays the provider and not the health insurance company.
If the physician is contracted with the health insurance company, any adverse benefit determination becomes a contractual issue between the physician and the patient’s insurance company and not an ERISA issue. Physicians must examine the patient’s benefits to see if denial is justified with regard to the benefits covered. Appeals can be made for denied benefits as per the terms of the contract between the contracted provider and the insurer.
Non-Contracted Physicians and the Appeals Process
If you are a non-contracted provider, you can appeal a benefit denial or incorrect reimbursement. Here are the steps involved in the process:
- Get an Assignment of Benefit Form: This is a legal document that makes you the patient’s legal personal representative. This form, signed by the patient, entitles you to receive the payment of the patient’s benefit.
- Get a copy of the patient’s Summary Plan Description (SPD): This document would give you information about the benefit determination - how much the insurer has to pay, included and excluded benefits, the time limits for claims submission, the timeframe for claim payment, and more. It would also indicate what the patient is responsible to pay.
- Make a demand for the name and specialty of the person who performed the adverse benefit determination and also a demand for all the documentation that was used to make this determination.
Request the employer for these items and if you do not get a response, contact the patient for them.
Professional Help is Available
The Patient Protection and Affordable Care Act (PPACA) has adopted all the existing ERISA claim regulations while adding on six to seven new requirements for the internal appeals process. Providers need to educate themselves on ERISA and its appeals process to uphold patients’ PPACA rights and also to ensure accurate claims practices. With patients on ERISA health benefits, physicians are susceptible to
- Denials for medical necessary services
- Reduced fees
- Lack of proper reimbursement
- Problems with insurers such as difficulty in getting accurate information
- Lack of response to requests