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Help! Claims paid previously now under review


Guest what the?
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Guest what the?

Hello. I seem to have found a place where there are some highly educated people regarding issues with self-funded plans(or self-insured or whatever the preferred name is) and I really need to pick your brains.

I'll try to make a long story short. My husband is employed with UPS. We have Cigna PPO and our health benefits are administered through the Health and Welfare Trust or the Fund office as it is often called. The only summary plan description we have is from 2005 and is about our old insurance with Alliance PPO. I asked for a new book and am told there is no updated SPD. I called repeatedly to confirm benefits for gastric bypass surgery. I was told on no less than 5 occasions (kept calling to make sure) that obesity treatment was excluded unless it was medically necessary. I told them all I saw in the old SPD was the obesity treatment exclusion but was again told there is coverage if medically necessary. Forward to now. I followed all of the precertification requirements to get medical necessity determination. I am scheduled for surgery Feb. 3 and have received a precert from Cigna. I called the fund office just to verify some recent changes in deductibles and they tell me that there is a review of how the gastric bypass claims are paid and the previously paid claims may have been paid in error due to an audit finding. They said they may be "retracting" the other payments and denying one that is pending. We are talking 25-40K for this surgery. My question is can they do this? Can they arbitrarily mid contract (meaning union contract) just decide they are going to interpret the exclusion differently now? I'm praying someone has some clarity for me and better yet has something I can throw at them to help them decide to continue paying for the surgery as they have been. Any ERISA stuff or any other legal mumbo jumbo that might pertinent?

Thanks so much for any help you can lend. My surgeon is ready to go ahead, but I'm terrified to proceed with this being so up in the air.

Thanks a lot!!

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I cannot comment on the issue of the fund going back and reversing decisions, sorry. Also, under a self-funded plan, the employer has the ability to operate the plan as they see fit. Don't believe that ERISA would be of any help here either.

You state in your question that "I followed all of the precertification requirements to get medical necessity determination" but, did you receive a written precertification for your procedure? This is very important. If you have gone through all of the precert process and was given a written precert, you should be ok.

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Guest what the?

Yes, I got a written precert from Cigna, but on it was the standard disclaimer that "this is not a guarantee of benefits and only speaks to medical necessity". The gal at Cigna told me they would not have done a precert if it was an excluded item, but the fund office seems to disagree and is now saying it should be excluded. The surgeon is prepared to go ahead with the surgery, but again, they will be coming after me if the fund denies the claim after the fact. I guess I'll have to talk to the fund office again this week and hope the determination is positive. It is my understanding that with ERISA they have to uniformly decide claims and can't apply a different decisions to the same claim without it being discrimination, so it seems that either they would have to retract all of them in order to deny me or if they leave the other claims stand then I would have to be approved. I can't imagine them wanting to invite that kind of litigation from the people who were previously approved.

Thanks for your thoughts.

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I am not an expert on this type of claim: I work with retirement plans. But it is conceivable to me that the company learned recently that they had been interpreting something wrong and has been directed to stop doing that going forward.

If you had already had the procedure when that switch occurred, you might have had a claim based on having relied on their pre-certification. Since you are on notice that they will not cover it before undergoing the procedure, you are probably stuck with the choice of not doing it, or paying for it yourself. For what it's worth, I agree that those choices are not fair, but what's legally correct and what's fair are not necessarily the same.

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I am not an expert on this type of claim: I work with retirement plans. But it is conceivable to me that the company learned recently that they had been interpreting something wrong and has been directed to stop doing that going forward.

If you had already had the procedure when that switch occurred, you might have had a claim based on having relied on their pre-certification. Since you are on notice that they will not cover it before undergoing the procedure, you are probably stuck with the choice of not doing it, or paying for it yourself. For what it's worth, I agree that those choices are not fair, but what's legally correct and what's fair are not necessarily the same.

I agree with k2retire. Your best hope is to locate the current SPD/plan documents and determine if (a) the coverage of types of procedure described clearly cover your type of procedure, or (b) the written terms of the plan more likely point to your procedure being covered than not and the plan documents do not expressly give the plan administrator broad, unfettered discretion to decide claims. Because it is a medical claim and precertification is involved, there are special time-frames and procedures that apply under DoL Regs § 2560.503-1©. So if you formally challenge in writing the current denial of coverage, there are expedited review requirements on the plan.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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what the?...Let me take the three issues seperate.

1. the standard disclaimer that "this is not a guarantee of benefits and only speaks to medical necessity", is essentially saying that the expense is covered, based on what they know at that time, because things can change, such as if you are still an enrolled in the plan. For example, if they ok the procedure on 12/1/08 and you disenroll on 12/31/08, and then have the procedure on 1/5/09, the expense would not be covered. The language is scary, but standard.

2. As for the difference between CIGNA and the fund office seems to be a different issue. I have not seen any of the documents/contracts etc between your employer and the vendors, so my answer is somewhat hedged. In a self-funded arrangement, the employer/fund etc., makes all the calls about what is covered, how it is covered, etc. It may be that the fund is beginning to think about changing how they view this type of procedure. If so, it would not be unusual for the precert folks to not know about this. They would be advised once the fund office makes a decision.

3. You comment about ERISA "It is my understanding that with ERISA they have to uniformly decide claims and can't apply a different decisions to the same claim without it being discrimination, so it seems that either they would have to retract all of them in order to deny me or if they leave the other claims stand then I would have to be approved." is basically correct. But the key with any of these types of procedures is the facts about each case, not the claim. There may be 5 people with a claim for gastric bypass, but it is possible that only 1 meets the standards for medical necessity.

Hope this helps.

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