Source: http://www.erisaclaim.com/prompt_pay_crisis.htm
Timestamp: 2016-12-04 01:51:12
Document Index: 599306530

Matched Legal Cases: ['§2560', '§2560', '§ 2560', '§2560', '§ 2560', '§ 2560', '§ 2560', '§502', '§502', '§502', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', 'art 4', '§ 2560', 'art 4', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', 'art 4', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', '§ 2560', 'art 7', 'art 7', '§21']

ERISAclaim.com: Prompt Pay Crisis & ERISA Solutions
Prompt Pay Crisis & Rx
Prompt Pay Crisis & ERISA Solutions
ERISA Provides Preemptive and "Pre-Prompt Pay"
Better Than State Law and Most Powerful Timely Payment Protections
ERISA “Prompt Pay” Time Limits
© 2003 - 2004 Jin Zhou, ERISAclaim.com
ERISA §2560.503-1
Effective on 01/01/2003 for all ERISA plans
self-insured and fully-insured,
§2560.503-1(a)
Urgent Care Claim
Preservice Claim
Claim Beginning Time
Beginning at a Time a Claim Is Filed, Regardless of Clean Claim or Not, In Accordance With Plan Procedures, § 2560.503-1(f)(4)
Decision Maximal Time Limits
In No Event Exceeding 90 Days Period,
§2560.503-1(f)
"Not Clean" Notification Time
Claimant Claim Cleanup Time
Plan Initial Determination
ASAP, <48 hours (clean claim)
< 72 hours (cleaned up claims)
Claimant Appeal Deadline
Plan 1st Level Appeal Response Time
Plan 2nd-Level Appeal Response Time
120 days with extensions
Plan Extension Time
Review/Appeal Maximal Limit
30 days (one Appeal)
15 days (two appeals)
30 days (two appeals) 60 days (one Appeal)
Initial Determination/EOB by:
"The Plan Administrator",
§ 2560.503-1(g)
Appeal Delay & Denial to:
"An Appropriate Named Fiduciary of the Plan",
§ 2560.503-1(h)
Review/Appeal Decision by:
"The Plan Administrator", § 2560.503-1(j)
Prompt Pay Crisis in U.S. Healthcare Delivery System Demands ERISA Practical Solutions
© 2003 Jin Zhou, ERISAclaim.com
Prompt payment crisis in health-care reimbursement has been identified as and remained to be
the No. 2 problem by AMA through nationwide medical Association surveys even after 47 states having enacted "Prompt Pay" laws and regulations, some very
aggressive state enforcements with multimillion dollar penalties against late pay insurers and managed-care organizations, 950,000 physicians nationwide class-action lawsuits in federal courts, abortion of unprecedented seven-year Patient's Bill Of Rights legislation campaign in Congress, and managed-care contracting reengineering between health-care providers and managed-care organization (MCO) as well as class-action settlement with Aetna and CIGNA
ERISA CD Book: $450
Medicare CD Book: $250
Holidays' Special - ERISA CD & Medicare CD:
[More info on CD Books] [Order CD Book]
Managed-Care Prompt Pay Crisis? What Does an Unanimous US Supreme Court Say?
On June 21, 2004, an unanimous US Supreme Court ruled that claim processing (Prompt Pay, timely benefits determination) and denials of benefits under the employer-sponsored health plans, ERISA-regulated benefit plans, for
"Held: Respondents’ state causes of action fall within ERISA§502(a)(1)(B), and are therefore completely pre-empted by ERISA §502 and removable to federal court. Pp. 4–20."
"We hold that respondents’ causes of action, brought to remedy only the denial of benefits under ERISA-regulated benefit plans, fall within the scope of, and are completely pre-empted by, ERISA §502(a)(1)(B), and thus removable to federal district court. The judgment of the Court of Appeals is reversed, and the cases are remanded for further proceedings consistent with this opinion.7 It is so ordered." Schoedinger v. United Healthcare of the Midwest Inc.
ERISA Pre-empts State Prompt Pay Laws
Top Seven Issues through National Medical Specialty Societies
Problems Reported By Popularity Rank
Medical Necessity Decision Denials
Bargaining Lack of Negotiation Power
Top Eight Most Importantly & Frequently Listed Issues through State Medical Associations
Problems Reported By Importance Rank
Downcoding & Bundling
Lack of Budgeting Power
Prior Authorization of Med. Services
Fraud Prevention and Compliance New York State, Insurance Department
ISSUED 4/13/2004
Health Net To Refund $4.99 Million To Policyholders And Re-Evaluate Some Healthcare Claims (The full report, pdf) Also Paid $500,000 Fine And Instituted Remedial Actions Under Separate Department Action
If NASA Columbia tragedy can find some solutions for preventions and resolutions, why can't health-care crisis with potential of paralyzing nation's economy and security deserve and demand some results oriented and compliant but practical solution?
Columbia Accident Report and conclusions identifies the foam debris as the likely cause and concludes NASA management culture is the biggest safety risk, this author, Jin Zhou, identified the ignorance, noncompliance and nonenforcement of ERISA claim regulation is the main cause and American business leaders
hands-free leadership on employee benefits management as well as health-care industry and managed-care culture are the biggest health-care crisis, because ERISA governs and regulates up to 80% of health-care claims or 60% of health expenditures in the U. S..
ERISA preempts state laws and managed-care contract enforcement on employee benefits claim delays and denials.
Why Bogus Plans Called "ERISA Advantage"???
Because There is An Advantage of None or Little/Late Enforcement of ERISA
(News-Medical.net,
Tuesday, 11-May-2004)
"Three people were arrested this morning for allegedly orchestrating a scheme to defraud the customers of Employers Mutual LLC, a company that purported to provide health care coverage to more than 20,000 people across the United States, but left more than $30 million in unpaid claims for medical services when it was shut down."
"Deputy Attorney General James B. Comey stated: “The Department of Justice is committed to the prosecution of individuals who operate bogus health insurance schemes. These schemes victimize the employees, individuals and families who believed they had health care coverage but are left uninsured with devastating personal liability for unpaid medical claims.”
"One of the Department of Labor's highest priorities is to protect the benefits of workers and their families,” said Ann L. Combs, Assistant Secretary of Labor for Employee Benefits Security. “These corrupt individuals took advantage of the trust that small businesses and their workers placed in them to provide health benefits. Today's indictments demonstrate our commitment to vigorously pursue those who prey on people seeking affordable health coverage for themselves and their families and ensure that they are prosecuted to the fullest extent of the law."
Canyon Lake couple arrested after federal indictment
FORMER PRESIDENT OF INTERSTATE SERVICES
INCORPORATED PLEADS GUILTY TO HEALTH CARE FRAUD
2004_09_30_Hyde "64-count indictment"(pdf)
"ERISA Advantage" If ERISA & "Prompt Pay" Was Enforced in 1997 (scam started), This Whole Tragedy ("ERISA Advantage") Could Have Been Avoided for Millions of Americans Contrary to the popular understanding and healthcare expert's assertion that ERISA doesn't provide for prompt pay protections as state law does,
(AMA REPORT OF THE BOARD OF TRUSTEES: ERISA Preemption and State Prompt Pay Laws) (DOC), ERISA statutorily prescribes the
regulatory appeal process for "prompt pay" violations. DOJ: Criminal Resource Manual 2432 Coercive or Fraudulent Interference with ERISA Rights -- 29 U.S.C. 1141
United States Supreme Court unanimously ordered on May 27, 2003 in BLACK & DECKER DISABILITY PLAN v. NORD that DOL FAQ (Benefit Claims Procedure Regulation), available on DOL web site, is the view of the Supreme Court and must be followed: "It is the Secretary of Labor’s view that ERISA is best served by “preserv[ing] the greatest flexibility possible for . . . operating claims processing systems consistent with the prudent administration of a plan.” Department of Labor, Employee Benefits Security Administration,
http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html, Question B–4 (as visited May 6, 2003) (available in Clerk of Court’s case file). Deference is due that view." (Bold and underline added) Black & Decker Disability Plan v. Nord , U.S. Supreme Court, Decided 05/27/2003
ERISA claim regulation compliance and enforcement will largely fix "Prompt Pay" violations and crisis in U.S. healthcare delivery system.
ERISA Provides Not Only "Prompt Pay"
"Preemptive" Protections,
Better Than State Law and Most Powerful Timely Payment Protections 1. Prompt Pay under ERISA (timely initial benefits determination and "provide or make payment") 2560.503-1 (f) (4) & (m) (4) A. ERISA “prompt pay” is provided through ERISA claim regulation, especially through newly effective ERISA claim regulation in response to Patient's Bill Of Rights campaign, which unfortunately died in Congress after seven years of unprecedented legislation and litigation across the country.
B. ERISA claim regulation with regard to prompt pay or timely benefits determination are provided through § 2560.503-1.
C. ERISA prompt pay is provided through two consecutive processes, timely initial benefits determination and reasonable benefits reimbursement.
D. Initial benefits determination with approval of benefits establishes legal ownership for the exact amount of money reimbursable by the plan,
E. Benefits reimbursement carries out transferring of physical possession of the legally determined amount of money from the plan to the claimant or his/her beneficiary.
F. Initial benefits determination with disapproval or reduction of the benefits claim triggers ERISA appeal right and plan fiduciary's obligations to disclose and plan's full and fair review process.
G. Once legal ownership for the exact and correct amount of money is established with benefits approval from initial benefits determination,
the claimant is in the best legal position for physical possession in transferring of that money from the plan, voluntarily or involuntarily with minimum legal difficulties through correct procedures provided under ERISA civil enforcement and criminal enforcement
H. The most payment delay (prompt pay violation) is due to the delay of initial decisionmaking in processing and approval the benefits instead of lack of fund by the plan to pay the claimant and providers.
I. It is completely misunderstood
by health-care providers that ERISA regulatory requirements of timely initial benefits determination does not help anything with actual payment of medical claims.
J If initial benefits determination was made in a timely fashion as outlined in the regulation but no payment was made due to no funds from the plan to pay, DOL will sue the plan sponsor to enforce compliance:
"Columbus, Ohio - The U.S. Department of Labor has sued defunct General Clay Products Corporation, of Columbus, Ohio, for abandoning the company’s retirement plan, and
also filed suit against its president for failing to forward employee contributions to the health plan. The alleged violations resulted in the loss of health insurance coverage for company workers."
2. ERISA Timely Benefits Determination Means Initial Benefits Determination, Benefits Decisions, and Actions to "Provide or Make Payments"
-Decisions to Pay and Actions to Pay,
§ 2560.503-1(m)(4).
A. § 2560.503-1 (m) (4) defines the term of "adverse benefits determination" by including approval for benefits and entitlement decisions AND actions to
"provide or make payments" based on initial benefits determination, instead of determination only without
"provide or make payment"
§ 2560.503-1 (m) (4) The term ``adverse benefit determination'' means any of the following: a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit, including any such denial, reduction, termination, or
failure to provide or make payment that is based on a determination of a participant's or beneficiary's eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or
a failure to provide or make payment (in whole or in part) for, a benefit resulting from the
application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.
B. § 2560.503-1 (f) (4) provides the timing of notification of "the plan's adverse benefits determination" (decisions to pay and actions to pay) instead of initial determination only without actions to pay "based on a determination" (decisions to pay only)
§ 2560.503-1 (f) (4) "Timing of notification of benefit determination. (1) In general. Except as provided in paragraphs (f)(2) and (f)(3) of this section, if a claim is wholly or partially denied, the plan administrator shall notify the claimant, in accordance with paragraph (g) of this section, of the plan's adverse benefit determination
within a reasonable period of time, but not later than 90 days after receipt of the claim by the plan, unless the plan administrator determines that special circumstances require an extension of time for processing the claim. If the plan administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90- day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the plan expects to render the benefit determination." C. "Failure to provide or make payment" that is "based on a determination" under ERISA
§ 2560.503-1 (f) (4) constitutes "adverse benefits determination" under ERISA
§ 2560.503-1 (m) (4), required timing of notification of initial benefits determination with decisions to pay and actions to pay
D. Although DOL explains, in its
FAQ A-10, that the time frames in these rules does not govern the time within which claims must be paid, it also states "failure to provide services or benefit payments within reasonable periods of time following plan approval, however, may present
fiduciary responsibility issues under Part 4 off Title I of ERISA", DOL advances this position in
DOL FAQ C-12, that if any payment is less than 100% of the medical bills, the plan must treat its decision as an adverse benefit determination, even for denied claims determined within time frames required under ERISA
§ 2560.503-1 (f) (4).
DOL FAQ A-10: Do the time frames in these rules govern the time within which claims must be paid? No. While the regulation establishes time frames within which claims must be decided, the regulation does not address the periods within which payments that have been granted must be actually paid or services that have been approved must be actually rendered. Failure to provide services or benefit payments within reasonable periods of time following plan approval, however, may present fiduciary responsibility issues under Part 4 of title I of ERISA.
DOL 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).
E. Approval for benefits, "Positive Benefits Determination," on initial determination and its notification without actual payment within time frames in accordance with
§ 2560.503-1(f)(4) automatically constitutes "Adverse Benefits Determination" defined under
§ 2560.503-1 (m) (4) and explained under
DOL FAQ C-12. F. Adverse benefits determination with positive approval of benefits and without actual payment
triggers ERISA appeal process under
§ 2560.503-1 (h) (2) and § 2560.503-1 (l) as well as
possible Fiduciary Breach Actions and
Remedies under Part 4 of title I of ERISA
3. Faster Than State Law Prompt Decision Making for Different Claims, urgent care, preservice claim and post-service claim.
Faster Decisions Faster decisions on initial claims - rather than 30 days (or more) for all claim under state laws, the new ERISA rule would require decisions (in most cases) not later than: Ø 72 hours for urgent care claims Ø 15 days for pre-service claims Ø 30 days for post-service claims Ø One 15 day extension for pre- and post-service claims Faster decisions on appeal of denied claims - rather than no limits (or more) under state improper claim practice regulation, the new ERISA rule would require decisions (in most cases) not later than: Ø 72 hours for urgent care claims Ø 30 days for pre-service claims Ø 60 days for post-service claims 4. Initial Benefits Determination in ERISA Carries More Protections Than Late Penalties in State Laws In Optimal and Prompt Benefits Reimbursement
A. Initial determination triggers legal ownership of the fund/money, B. Initial determination Triggers appeal process for faster resolution of benefits determination,
C. Initial determination Triggers provider contract with MCO, more importantly strip ERISA shield by mooting ERISA jurisdiction.
5. ERISA "Statute Limitation" For "Clean Claim" Protections ERISA mandate notification of clean claim rejection, improper claim filing, in 24 hours for urgent care claims, 5 days for preservice claims, failure to notify claimant on claims not clean will foreclose future excuses of cleanness of claim, which state law usually provides no parallel protections.
ERISA mandate 30 days limits for initial benefits determination regardless of claims clean or not for post-service claim.
ERISA has clear definition of time frame of the beginning of claim, starting at a time a claim is filed in accordance with the reasonable procedure of a plan for regardless of the claim "clean or not",
§ 2560.503-1(f)(4). 6. ERISA timely initial determination failure triggers ERISA appeal process, which provide for faster and earlier as well as complete access to claim administrative files, complete disclosure for better legal leverage to ensure better reimbursement for
denials on the ground of policy exclusion, bundling and down coding, medical necessity, UCR (usual, customary and reasonable), out of network provider exclusion, and identities of legal entities responsible for claim decisionmaking.
Failure to Make Timely Initial Determination and failure to timely respond to reviews/appeals under ERISA = failure to establish and maintain claims procedure (new ERISA protection, § 2560.503-1(l) = exhaustion of remedy under ERISA and loss of deferential review standards ("deemed denied" reviews) in federal court = loss of ERISA shield = more benefits payment and attorney fees, better than state law late penalties, it is like “winning” the battle of prompt pay for ERISA plans but losing the war of ERISA shield in coverage and reimbursement.
8. Prompt Pay in State Laws Is Based on a weak and ambiguous definition of "clean claim", which provides insurers and MCO an open-door escape from "late pay statutory penalty because no payment will be due at all on the ground of no coverage and the medical necessity denials or by unreasonably requesting for additional information, once out of prompt pay provision jurisdiction and falling under State Law Improper Claim Practice Act, most states do not provide private right of action (right to sue a private citizen) and state law penalties; while ERISA provides for a closed-door requirements of either notifying the claimant of insufficient and "not clean claim" in 1 to 5 days or timely benefits determination for "not clean claim". To make it simple, under state law, if an insurance company and MCO can challenge and escape "clean claim" requirements by doing anything, such as requesting for additional information, then there is no requirements from state law for an insurance company and MCO to make timely initial and final decisions for those "not clean claims", while ERISA claim regulation mandates notification of “clean or dirty claim” in a timely fashion and provides for very limited extension by pending additional information, and mandatory initial benefits determination in a much faster timeframe than State laws, 72 hours for urgent care, 15 days for preservice claim and 30 days for postservice claim, more importantly ERISA also provides for timely response to appeals/reviews, failure to respond to appeals/reviews will provide the claimant with exhaustion of administrative remedy and deferential judicial review standards in federal court.
9. ERISA Provides
Preemptive Protections and Clean Claim Rejection Protections before the State Laws Can Be Seen on the "Radar Screens" of State Law Jurisdictions for Prompt Pay and Clean Claim Through Urgent Care and Pre-service Claim Provisions:
A. New ERISA Claim Regulation provides more protections for not only prompt pay protection but also preemptive claim protections before State Law Prompt Pay Recognized Claims Can Be Made;
B. ERISA Defines a Claim Preemptively While State Law Prompt Pay Defines a Claim in a post-service fashion;
C. ERISA § 2560.503-1(e) defines "claim for benefits" as a claim filed or request for a plan benefit, including any pre-service Claims and any post-service Claim;
D. ERISA § 2560.503-1(m)(2) defines "pre-service Claim" as "(2) The term ``pre-service claim'' means any claim for a benefit under a group health plan with respect to which the terms of the plan condition receipt of the benefit, in whole or in part, on approval of the benefit in advance of obtaining medical care."
E. DOL explains and clarifies a Pre-service Claim in DOL FAQ: "A-3: Does the regulation apply to a request for a determination whether an individual is eligible for coverage under a plan?
The regulation applies to coverage determinations only if they are part of a claim for benefits. The regulation, at
§ 2560.503-1(e), defines a claim for benefits, in part, as a request for a plan benefit or benefits made by a claimant in accordance with a plan’s reasonable procedure for filing benefit claims. A claim for group health benefits includes pre-service claims (§ 2560.503-1(m)(2)) and post-service claims (§ 2560.503-1(m)(3)). If an individual asks a question concerning eligibility for coverage under a plan without making a claim for benefits, the eligibility determination is not governed by the claims procedure rules. If, on the other hand, the individual files a claim for benefits in accordance with the plan’s reasonable procedures, and that claim is denied
because the individual is not eligible for coverage under the plan, the coverage determination is part of a claim and must be handled in accordance with the claims procedures of the plan and the requirements of the regulation. See 65 FR at 70255."
F. A plain English explanation of pre-service claim is that if any ERISA plan requires pre-certification or prior authorization or anything completed by the claimant or providers as a precondition or perquisites before service is provided and coverage is considered, it is a pre-service claim under ERISA, even without performing a proposed health care service, complete and submit a claim form to the plan, that is required under the state law to trigger prompt pay laws,
G. Entire managed-care concept is established on pre-certification, prior authorization and utilization review as well as provroposed health care service, complete and submit a claim form to the plan, that is required under the state law to trigger prompt pay laws,
G. Entire managed-care concept is established on pre-certification, prior authorization and utilization review as well as provider participation and network access limitation. Absolute majority of managed-care plans require pre-authorization and pre-certification for significant and expensive medical procedures,
H. According to the latest researchers report in the January issue of the Annals of Emergency Medicine, Ann Emerg Med 2002;39:24-30, out of 980 emergency department visits involving 951 patients, all of which covered under managed-care insurance, 89% of visits require prior-approval or pre-certification.
I. Under state law, a pre-service claim denial from prior authorization or pre-certification process will most likely prevent from or discourage the patients and the providers to initiate medical services or filing claims at all because of no coverage,
J. ERISA § 2560.503-1(c)(ii) qualifies a preservice claim under ERISA:
"(A) Is a communication by a claimant or an authorized representative of a claimant that is received by a person or organizational unit customarily responsible for handling benefit matters; and (B) Is a communication that names a specific claimant; a specific medical condition or symptom; and a specific treatment, service, or product for which approval is requested."
K. ERISA § 2560.503-1(c)(i) provides "clean claim" rejection protections, 24 hours and 5 days "statue limitation":
"(1)(i) The claims procedures provide that, in the case of a failure by a claimant or an authorized representative of a claimant to follow the plan's procedures for filing a pre-service claim, within the meaning of paragraph (m)(2) of this section, the claimant or representative shall be notified of the failure and the proper procedures to be followed in filing a claim for benefits. This notification shall be provided to the claimant or authorized representative, as appropriate, as soon as possible, but not later than 5 days (24 hours in the case of a failure to file a claim involving urgent care) following the failure. Notification may be oral, unless written notification is requested by the claimant or authorized representative." L. ERISA § 2560.503-1(f)(2) provides initial benefits determination in 72 hours for urgent care claims and 15 days for pre-service claims.
M. ERISA § 2560.503-1(i)(2)(i) provides appeal/review Time limitation with 72 hours for urgent care claims and
§ 2560.503-1(i)(2)(ii) with 15 days for pre-service claims.
N. Most of state law prompt pay provisions do not provide any protections unless a traditional claim form is completed and submitted. If state law provides any protections for emergency care, it is only for the the coverage of emergency treatment instead of clear timeline of benefit determination, and the usually this type of coverage verification is provided with a legal disclaimer for coverage and pre-approval disqualification.
O. Traditionally under managed-care environment, the plan will require prior authorization, pre-certification, prior approval people services is provided through the plan provisions and provider contract agreement, after denial and disapproval of admission or treatment requests, most health-care providers will not provide services with patient concerns of impossibility of payment or even complete and submit insurance forms for reimbursement. This will be legally categorized as policy exclusion denials. According to
The updated Harvard & RAND study, funded by the U.S. Department of Labor (DOL), published on June 18, 2003 through Health Affairs, pre-service claim denial is at 42% high while providers do not even consider
this type of denials as managed-care denials. Without a claim, the managed-care health plans will reject any appeals because there was no claims or denials to appeal. With or without appeals, this will clearly escape from any state law prompt pay jurisdictions.
P. Even if a
state law provides any protections in this regard for any claims under ERISA plans, and if such s state law is inconsistent with ERISA claim regulation, it will be definitely preempted and unenforceable for
80% of health care claims and
60% of health expenditures in the United States.
Q. ERISA provides preemptive protections and clean claim rejection protections before the state laws can be seen on the "radar screens" of state law jurisdictions for prompt pay and clean claim .
10. Failure to Timely Make Benefit Determination and Review Decisions By the Plan Administrator Will Lose ERISA Shield Protections for the Plan:
A. Failure to timely make benefit determination and review decisions by the plan administrator will constitute “deemed denied” review/appeal and “deemed exhaustion of administrative remedy” under
§ 2560.503-1(l), (“a decision on the merits of the claim” = de novo judicial review, instead of deferential judicial review) that will forfeit or preclude the plan from “deferential review standard” on judicial review in federal court,
the most important part of “ERISA Shield” on ERISA land. Gilbertson v Allied Signal Inc
B. DOL interprets
§ 2560.503-1(l) through CFR accompanying supplementary information on page 70255: “The Department’s intentions in including this provision in the proposal were to clarify that the procedural minimums of the regulation are essential to procedural fairness and that
a decision made in the absence of the mandated procedural protections
should not be entitled to any judicial deference.”
C. JEBIAN v. HEWLETT-PACKARD [9th Cir., 11/25/03]
Excerpt: “[3] The primary question before us, of first impression in this circuit, is whether a plan administrator’s decision, other-wise within the administrator’s discretion, can be accorded judicial deference when the purported final, discretionary decision is not made until after the claim is, according to both the terms of the plan and Department of Labor (DOL) regulations, already automatically deemed denied on review. We conclude that where, according to plan and regulatory language, a claim is
“deemed . . . denied” on review after the expiration of a given time period, there is no opportunity for the exercise of discretion and the denial is usually to be reviewed de novo. While deference may be due to a plan administrator that is engaged in a good faith attempt to comply with its deadlines when they lapse, this is not such a case.”
D. In the following latest 2004 case ruled under new ERISA claim regulation, a failure to render a timely decision by the plan administrator resulted in "deemed denial", "deemed exhaustion of remedy" and "loss of deferential review standard", the worst for the plan in ERISA litigation. (Please note this is a pension claim)
Linder v. BYK-Chemie USA Inc., 2004 U.S. Dist. LEXIS 6228 (D. Conn.2004)]
Excerpt: “......Linder argues, however, that under the Department of Labor regulations in effect since January 1, 2002, administrative remedies are deemed to be exhausted if the Plan Administrator fails to respond to a claim for benefits within 90 days. He argues that the Plan's claims procedures, which provide that a claimant may administratively appeal if the Plan Administrator fails to respond within 90 days, are invalid, as they fail to comply with ERISA's procedural requirements. The Court agrees.
Under the express terms of the regulations, Linder's claim is deemed exhausted, and he is entitled to bring suit in federal court. See 29 C.F.R. § 2560.503-1(l).
......The ERISA regulations are clear that claimants are "deemed to have exhausted administrative remedies" in such circumstances. As 28 C.F.R. § 2560.503-1(l) provides:
In the case of the failure of a plan to establish or follow claims procedures consistent with the requirements of this section, a claimant shall be deemed to have exhausted the administrative remedies available under the plan and shall be entitled to pursue any available remedies under section 502(a) of the Act on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim.......
For the foregoing reasons, defendant's motion for summary judgment is DENIED."
Court Rules Indiana Marketing Firm and Executives Must Restore Losses to Health Plan (DOL Media Release, 01/05/2005)
"Chicago, Illinois - A federal district court in Indiana has ordered TRG Marketing, LLC of Indianapolis, Indiana, and its executives to restore losses to the firm’s health plan, pay unpaid health claims owed to plan participants nationwide, and be permanently barred from serving as plan fiduciaries, according to a judgment obtained by the U.S. Department of Labor. The judgment resulted from a lawsuit in which the department alleged that TRG executives diverted up to $3.4 million in health plan assets to pay personal expenses for themselves and family members.......
Under the judgment, TRG, William Paul Crouse and Carmelo Zanfei were removed from their positions with the TRG health plan and are permanently barred from service in the future to any plan governed by the Employee Retirement Income Security Act (ERISA). The court found that the defendants engaged in self-dealing when they used health premiums collected from employers to pay for commissions to TRG’s enrollment brokers, trips overseas, expensive glassware, personal expenses, charitable contributions, and a corporate line of credit. A trial will be held to determine the amount to be repaid by the defendants...."
Chao v Crouse
Cause No. 1:03-cv-1585-TAB-DFH 11/22/04
Feds sue local business (Star-Tribune)
"The U.S. Department of Labor has sued the owner of a local business for allegedly mishandling the funds withheld by employees for their retirement plans, according to the complaint filed by Secretary of Labor Elaine Chao and Susan Willer of the department's Kansas City, Mo., office.....
He did not transfer the money to the 401(k) in a reasonable time, did not determine the retirement plan's assets, did not assert control over the assets or ensure that the assets would be protected from losses, according to the complaint."
Media Release: Former Foxboro, Massachusetts Nursing Home Company and President Agree to Pay Outstanding Employee Medical Claims as the result of U.S. Labor Department Lawsuit
(DOL >
EBSA >
"Boston, Massachusetts - Volonte Care, Inc. of Foxboro, Massachusetts, and company president Robert Michael Whitty have agreed to pay $35,500 in outstanding medical bills for former employees of the now-defunct nursing home and home healthcare company to settle a lawsuit filed by the U.S. Department of Labor......
“The law clearly requires those who administer employee benefit plans to do so in a careful, prudent and honest manner solely for the benefit of participants,” Benages said. “ A situation like this where promised benefits are never paid while employee contributions continue to be collected is totally unacceptable”
Marlborough, Connecticut, Companies Agree to Refund Over $900,000 to Health Benefit Plan Clients to Settle U.S. Labor Department Lawsuit
Executive of Defunct Illinois Manufacturer Sued Over Delinquent 401(k) Employee Contributions [08/26/04]
Prompt Pay Solutions under ERISA
How to Request and Appeal for Prompt and Maximal Reimbursement 1. Sufficient Understanding of ERISA Claim Regulation and Claims Procedures, Compliance = Productions
2. Early Identification of ERISA Patients and ERISA Plans, 80% of Health-care Claims under ERISA
3. Obtain ERISA Rights to Become "an Authorized Representative" (DOL FAQ B2, B3)
4. Obtain a Copy of Specific Plan Document, Summary Plan Description (SPD), ERISA Version of Insurance Policy
5. Understanding Different Types of Health-care Claims under ERISA, Urgent Care, Pre-service Claim and Post-service Claim
6. Request for Prompt Payment under ERISA, and File "Prompt Appeals" in Accordance with ERISA Claim Regulation Instead of State Prompt Pay Laws
7. Appeal Only To "Named Fiduciary" Identified by SPD (Summer Plan Description, ERISA Version of Insurance Policy) to Timely and Promptly Trigger the Appeal Process, after Untimely and Failure in Timely Initial Claim Determination
8. Prompt and Timely Finishing At Least Two Level Appeals To Exhaust Internal/Administrative Remedies, to Foreclose Any Future Excuses in Claim Delays in
9. Make a Final Demand for Payment As Volunteer Appeal under ERISA and Notification of Lawsuit in Federal Court As Provided by ERISA
10. Prompt and Maximal Reimbursement from ERISA Plans Will Be More Secured When ERISA Shield Is Destroyed and No Winning Chance to Defend a Delay in
ERISA § 2560.503-1
Beginning at a Time a Claim Is Filed, Regardless of Clean Claim or Not, In Accordance With Plan Procedures,
§ 2560.503-1(f)(4)
In No Event Exceeding 90 Days Period, § 2560.503-1(f)
§ 2560.503-1(j)
check out our appeal systems and
Dr. Jin Zhou is available for special presentations and consulting to any interesting parties on the subject of Prompt Pay Crisis & ERISA Solutions and U.S. health-care crisis turnaround.
He can be reached at (630)-736-2974 by phone or by email at ERISAclaim@aol.com
View a 5-minute clip
Paper Chase ERISAclaim.com - U.S. Health-care Crisis
HMOs Earn $10.2 Billion in 2003, Nearly Doubling Profits, According to Weiss Ratings; Blue Cross Blue Shield Plans Report 63% Jump in Earnings
(BUSINESS WIRE)--Aug. 30, 2004
View a 5-minute clip Paper Chase Paper Chase in 20% of national healthcare claims has been revealed and scrutinized, while Paper Chase in
DOL Publishes Guide to Notices Required by HIPAA and Other Provisions in Part 7 of ERISA's Title I Self-Compliance Tool for Part 7 of ERISA: HIPAA and Other Health Care-Related Provisions Compliance Guide For Qualified Medical Child Support Orders HIPAA Nondiscrimination Requirements Frequently Asked Questions
AMA REPORT OF THE BOARD OF TRUSTEES: ERISA Preemption and State Prompt Pay Laws (DOC)
Insurers say prompt pay not a big issue; doctors disagree (American Medical News)
Regulatory Remedies and Contracting Strategies (PDF) (PA,NJ) Tsoules, Sweeney & Dubow, LLC HMOs Earn $10.2 Billion in 2003, Nearly Doubling Profits, According to Weiss Ratings; Blue Cross Blue Shield Plans Report 63% Jump in Earnings
State's Prompt Pay Chart (AUANet.org) (all states) (ERISA Prompt Pay Chart)
TDI,Texas Department of Insurance
Prompt Payment Workshops
Prompt Payment to Providers 28 TAC §§21.2801-21.2816
of Health Care Claims
Emergency Rules Summary The Truth About Texas' Prompt Payment Laws For Healthcare Providers (FindLaw.com) NORTH CAROLINA DEPARTMENT OF INSURANCE PROMPT PAY GUIDANCE (PDF) Ohio Dept of Insurance - Ohio's Prompt Payment Law Texas Prompt Pay Law Not Preempted by ERISA (PDF) (Jenkens & Gilchrist)(At page 3 of 5-page document)
"According to the video, when faced with claims for identical medical problems, Aetna separates the claims where no damages are available - those subject to the federal Employee Retirement Income Security Act, or ERISA - from non-ERISA claims, where consumers can sue.1 2" Aetna Reaches Agreement with Physicians, May 22, 2003
(Aetna.com)
Aetna ERISA Settlemnt with 950,000 MD's
"We affirm the trial court's ruling that BOMEX has jurisdiction to review medical decisions which could affect the health or safety of a patient or the public, including decisions Dr. Murphy renders as medical director for Blue Cross. ...."
Medical Necessity: The Gateway to Meaningful Health Care Access (Rosenfeld & Rafik)
AMA (PSA) Managed Care Issues/ Private Sector Advocacy
PSA recently asked the national medical specialty societies and state medical associations to list the top private sector issues facing their membership.