These articles have been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, February & April 2011 issues, @2011 by Steven J. Bruzonsky, Esq.
ERISA LIENS – OBTAINING PAYMENT OF HEALTHPLAN MEDICAL BENEFITS, PART 1: THE ATTORNEY’S ROLE
(This is the first part of a two part serieson obtaining payment of employer healthplan medical benefits.)
Many employer healthplan Summary Plan Descriptions (SPDs) state that the insured’s failure to cooperate in providing the information requested by an accident questionairre or by signing and returning a subrogation/lien agreement is grounds for denial or nonpayment of benefits. Keep in mind that if it turns out that traditional premium based health insurance pays the client’s accident-related medical expenses, that the subrogation agreement signed by the client isn’t legally enforceable thanks to Arizona anti-subrogation case law, as Federal preemption is not applicable. Although the attorney may appropriately fill out the accident questionairre and review the subrogation agreement, the attorney should avoid legal ethics concerns (reserving the right to contest the lien claim) by not signing either document. Either document should be signed by the client, and then the attorney can mail in the document showing the client’s return address.
Once a medical benefits clai is processed, the health insurer sends an EOB (Explanation of Benefits) form to both the healthcare provider and to the insured. Although medical benefits claims are actually processed and paid, or even denied, correctly in many cases, its all too often that such claims are improperly denied or benefits improperly limited.
Some examples that I have seen in my injury law practice: Claim denied on basis that insured must complete, sign and return accident questionnaire and/or subrogation agreement, even though this had already been done more than once. Claim denied on basis that auto accident insurance is primary, even though accident questionnaire and subrogation agreement already returned and subrogation company was corresponding with insured’s attorney concerning the ERISA lien claim. Claims for more than $30,000 in ambulance, hospital and surgical treatment denid on basis that auto medical payments is primary, even though we advised them that the $1,000 auto medical payments limit collected was being used by client for payment of co-insurance and deductible, or in another case that there was no auto medical payments coverage. Claim denied on basis that the policy was terminated prior to date of service, even though the insured’s employee sponsor was continuosly employed by the employer sponsor prior to, during, and after the date of service and the employee had this same health insurance for several y ears. Claim denied on the basis that it was untimely submitted, even though it was submitted within 8 months post-service and there was no prejudice to the healthplan. Claim denied on the basis that the provider is not in the HMO network, even though the provider was in the HMO network.
You might think that simply having the insured call his health insurer (the phone # for claims is usually on the back side of the health insurance card provided by the employer) would clear up such claims payment problems. But this is often not the case. Recently, more than six months had passed since the accident, yet my client’s employer sponsored health insurance had yet to pay medical benefits on the initial $30,000+ ambulance and hospital bills, even though the health insurance had paid some small follow up doctor bills.
First my client was on the phone for over an hour being transferred from one Customer Service representative to another. He told them that he had he returned the accident questionnaire and subrogation agreement and that his attorney was in touch with Rawlings Corporation as they were handling the subrogation claim. Everyone told him that the auto accident insurance was primary and that the health insurer wasn’t responsible. Next I called. I kept demanding to be transferred to the Claims Manager with no luck. I accomplished nothing other than wasting even more than an hour of my time.
Employer sponsored health insurers know what they can get away with, particularly thanks to ERISA preemption of state insurance “bad faith” law. All too often health insurers have procedures designed more as roadblocks than to properly process claims.
If we let the health insurers improperly deny or limit medical claims payments for our clients, then there may be that much less money for the client when the injury claim settles. And the attorney might need to reduce attorney’s fees some so the client (after payment of attorney’s fees and costs and medical bills/liens) gets a fair amount of money from the settlement. Or late or non-payment of medical bills may be reported against the client’s credit rating.
This begs the question – what role, obligation, or even standard of care does the personal injury attorney have in assisting the client in obtaining payment of full medical benefits from employer sponsored health insurance?
I have no doubt that some personal injury attorneys feel that obtaining payment of health insurance benefits is the client’s responsibility, not the attorney’s, unless the attorney and client enter into a fee agreement, whether hourly or percentage, concerning unpaid health insurance benefits. Or that since we have to pay back the health insurer or ERISA plan for accident-related medical benefits paid, that we should just go ahead and negotiate the medical bills and pay them from the injury settlement proceeds later on.
I strongly disagree with the above. I personally believe that the standard of care for personal injury attorneys requires that the attorney and/or staff make reasonable follow up and assist the client in hopefully obtaining their full health insurance benefits towards payment of the client’s accident-related medical expenses. Normally obtaining payment of the full health insurance benefits will result in more money left over for the client at settlement (especially since some employer sponsored healthplans do not have lien rights for various reasons; and because the amount of any ERISA lien may be for only a fraction of the medical bills incurred and paid in the personal injury settlement). At settlement, the attorney is required by legal ethics to review the percentage attorney’s fees and to consider whether some fee reduction is appropriate. The amount of money left over for the client and the attorney’s efforts and results in lien reduction as we as obtaining payment of health insurance medical benefits are very important factors to consider in making this fee determination.
(The second part in the next issue includes form complaints to the Arizona Department of Insurance and the U.S. Department of Labor when several months have gone by and the employer healthplan has failed to properly pay medical benefits.)
ERISA LIENS – OBTAINING PAYMENT OF HEALTHPLAN MEDICAL BENEFITS, PART 2: COMPLAINTS TO AZ DEPT OF INSURANCE
AND U.S. DEPT OF LABOR
(This is the second of a two part series on obtaining payment of employer healthplan medical benefits..The first part was in the February 2011 issue.)
How do you as a plaintiff’s attorney “quickly” check to find out if health insurance has been paying your client’s medical bills? Client can provide you with the Explanation of Benefit (EOB) forms received from the health insurer. At the appropriate time, your staff can call the medical provider’s billing office to find out. (Careful – if a hospital hasn’t filed a lien, have client call, as contact by an attorney’s office may well trigger the hospital’s filing of a lien. If you have reason to believe that a particular doctor’s office may file a lien once the billing office is contacted by an attorney, then have the client call that doctor’s billing office as well.) Or you might have the client, or you or your staff, call the health insurer (be sure to have a HIPAA authorization signed by client and ready to fax to the health insurer if your office is contacting the health insurer).
If the above methods do not work and several months or more have gone by since the medical services were provided, then you may want to prepare complaints to the Consumer Affairs Department, Arizona Department of Insurance (Az DOI) and/or to the Office of Participant Assistance, Employee Benefits Security Administration, U.S. Department of Labor (US DOL). The Az DOI will accept jurisdiction for the complaint if the health benefits involved are paid by traditional premium based health insurance. If the health insurer responds to the complaint contending that the Az DOI has no jurisdiction because an employer ERISA plan self-pays the medical benefits with the health insurer acting as Third Party Administrator (TPA) only, then the Az DOI will close the file and refer you to file a complaint with the US DOL. If you are unsure which agency will have or accept jurisdiction, you might want to file a complaint with each agency. Although the attorney’s office can prepare and mail in the letter, I recommend that the return address on the letter and envelope be the client’s, because I think the agency will give the Complaint more credence coming from the insured as opposed to the insured’s attorney.
This might be a great way in the case of a disputed or questionable ERISA lien to help determine whether the plan self-pays the medical benefits vs whether traditional premium based health insurance pays the medical benefits
Following are sample complaint forms for the Az DOI and the US DOL.
Complaint to Arizona Department of Insurance
[Date]
From:
[Client’s Name]
[Client’s Address]
[Client’s Phone #]
[Client’s email]
To:
Consumer Affairs Division
Arizona Department of Insurance
2910 N 44th St., Ste 210
Phoenix, AZ 85018-7269
(602-364-2499)
(602-364-2505 Fax)
Copy to:
(Insert health insurer name, address, phone and fax here)
(Obtain from back of health insurance card or from EOB statements)
Re: Complaint re Nonpayment/Inadequate Payment of Medical Benefits
Sponsor/Plan Participant/Employee:
Employer:
Group #:
Insured, DOB & SSN:
ID/Policy #:
Dear Consumer Affairs Division;
I wish to file an Unfair Claims Settlement Practice Complaint against the above health insurer.
The above health insurer has wrongly failed to pay some or all benefits for the following healthcare providers (bills attached):
Provider Amount Billed
Attached are copies of pertinent EOBs and medical bills. Please promptly investigate this matter and hold a hearing if and as appropriate.
Thank you for your courtesy and assistance.
Very truly yours,
[Client’s Name]
_________________________________________________________________________________
Complaint to U.S. Department of Labor
[Date]
From:
[Client’s Name]
[Client’s Address]
[Client’s Phone #]
[Client’s email]
To:
Office of Participant Assistance
Employee Benefits Security Administration
United States Department of Labor
200 Constitution Ave., N.W., Ste N-5623
Washington, D.C. 20210
(202-693-8630)
(202-219-8141 Fax)
www.dol.gov/ebsa
Copy to:
(Insert health insurer name, address, phone and fax here)
(Obtain from back of health insurance card or from EOB statements)
Re: Complaint re Nonpayment/Inadequate Payment of Medical Benefits
Sponsor/Plan Participant/Employee:
Employer:
Group #:
Insured, DOB & SSN:
ID/Policy #:
Dear Office of Participant Assistance;
I wish to file a Complaint against the above health insurer TPA for the above employer’s ERISA plan..
The above employer’s ERISA plan has wrongly failed to pay some or all benefits for the following healthcare providers (bills attached):
Provider Amount Billed
Attached are copies of pertinent EOBs and medical bills. Please promptly investigate this matter and hold a hearing if and as appropriate.
Thank you for your courtesy and assistance.
Very truly yours,
[Client’s Name]
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