Benefit Disclosure and Appeals regarding Misquoted Benefits Despite technology improvements aimed to facilitate the exchange of insurance eligibility information, insurance benefit calculation has grown immensely more complicated. Gone are the days when an “80-20 plan” could actually result in a check for 80% of billed charges. Instead, carrier cost control measures result in confusing benefit calculations. Most carriers now use a fee schedule in combination with claim editing software meant to parse between payable and non payable codes and coding combinations. Furthermore, out-of-network benefits are subject to usual, customary, and reasonable (UCR) and Silent Preferred Provider Organization (Silent PPO) adjustments. In the end, reliance on online eligibility verification can leave you looking at huge balances on the back end that have no apparent explanation. 

If online verification is implemented, it should be supplemented with a system to clarify reimbursement for high charge amount procedures, out-of-network care, or procedures where coverage varies significantly from plan to plan. 

Demanding Benefit Clarification Disclosure 

Most healthcare organizations supplement online eligibility information with benefit information obtained by phone; however, you can ensure that accurate benefit information is obtained by taking the verification of benefits process one step further, through the process of benefit clarification disclosure. Benefit clarification refers to the process of attempting to determine the exact fee schedule, coding criteria, and other cost-containment features and limitations which may be applied to the billed charge. 

Requesting disclosure of these potentially applicable limitations can be extremely important. As discussed earlier, healthcare organizations are in a unique position of being third-party creditors for many healthcare services. In exchange for providing valuable medical services, you routinely accept an Assignment of Benefits (AOB) related to the patient’s healthcare policy or plan, but the specifics of this coverage are largely unknown to you and may or may not be an equitable arrangement for the planned services. There are two ways to more accurately determine benefits—obtain a copy of the policy or plan benefits and review the numerous limitations and exclusions, or make a written Pretreatment Disclosure Request asking the carrier to divulge the benefits for the planned services. 

The Right to Disclosure to Insurance Benefit Information is recognized under many state and federal laws. These laws normally protect the beneficiary’s right to obtain detailed benefit information but remain silent regarding the treatment provider’s right to benefit information. The insurance company will usually provide benefit information as a courtesy, but such verification does not necessarily have the same implication as a disclosure made in accordance with consumer protection mandates. Because the provider/assignee’s right to obtain benefit information is not routinely recognized by the insurance carrier, it is important to submit a copy of the AOB when a disclosure request is made. The wording of this document may play a large role in whether the carrier will recognize the provider’s rights or simply ignore the request as being outside the bounds of what is required by law to be provided to healthcare organizations. 

The U.S. Department of Labor provides information on protections related to the Employee Retirement Income Security Act of 1974 (ERISA) Benefit Claims Procedure Regulation, which applies to most employer-sponsored benefit plans. This federal regulation requires carriers to disclose certain documents and information used in making group health claim determinations. This protection is very important. You can use it to obtain access to internal clinical criteria, fee schedules, and UCR charge data used to adjudicate and calculate claims. These protections typically mandate disclosure of information to insurance beneficiaries. Litigation initiated by providers has demonstrated that such protections can extend to other qualified parties, however, such as an authorized representative or a third-party assignee, if the request is made in compliance with the regulation. 

Many state laws require accurate disclosure of coverage terms. State mandates regarding unfair claims practices often prohibit any misrepresentation of benefit information by an insurance carrier. These laws usually require insurance commissioners or other insurance authorities to track and investigate potential violations of this law. Most of these investigations focus on whether the violations are a frequent business practice of the insurer under investigation. Therefore, any complaint related to such laws should attempt to show a pattern of violations over time. Some states have passed even more protective managed care disclosure requirements, such as the Alabama Patient Right to Know Act, the Arkansas Patient Protection Act of 1995, and the Texas Verification Law. 

Despite these protections, widespread violations are often found by states that assess disclosure law compliance. The state of New York passed the New York Managed Care Consumer Bill of Rights (MCCBOR), which requires the disclosure of denial information including clinical information used in decision-making as well as information regarding the appeal process. To test carriers’ compliance with the protections, the New York Office of Attorney General conducted an “undercover investigation” wherein OAG surveyors posed as consumers shopping for healthcare coverage. As part of the investigation, letters were sent to 22 New York-area health plans inquiring about the coverage available through their various plans for specific medical condition. The letters sought specific coverage information related to their healthcare needs such as coverage and clinical review criteria for insulin pumps, surgery for Crohn’s disease, arthroscopic knee surgery, and breast reductions. Some carriers did not respond and those that did respond frequently provided insufficient coverage information to comply with the new law. See the New York OAG Web site (www.oag.state.ny.us/press/reports/hmo_coverage_info_report.pdf) for a copy of the report, including a list of carriers and the grade each was given. The New York OAG report is an indictment of the carriers’ poor attempts to convey coverage information and points out the harmful repercussions on patients and providers, as indicated in the following quote:

“The impact of these findings must be measured in human terms. Violation of the information of the MCCBOR is not an abstract problem. The direct consequences of such violations are likely to be confusion, anxiety and fear among consumers with real medical needs. Navigating the health care market is no easy task, and when the choice is compounded by an imminent or existing medical need, full disclosure by health plans takes on added significance. Each time a plan neglects to provide clinical review criteria, the consumer is cast into a state of limbo in which a critical life decision is reduced to uncertain guesswork and high-risk speculation. Each miscalculation caused by a lack of information could leave the prospective enrollee with the choice of either paying for expensive treatment out of pocket or foregoing necessary medical care. The MCCBOR was passed so that consumers would not face that choice. Our survey demonstrates the urgent need to ensure that New York health plans comply with the law.”

In light of carriers’ poor performance on disclosure requests, providers will need to cite specific rights related related to requests for benefit information. See the following: Using the Pretreatment Disclosure Request