jeanine

Self-funded company wants to try to control costs by capitating payments to providers. Asks the TPA (which provides a network of preferred providers) to negotiate a capitation scheme that other self-funded payors will use as well. Is this allowable? If it is allowable, what is it considered? I don't think this is an insurance arrangement but I don't know. Comments?

I've been wracking my brain on this one and know at least one situation where this may eventually hurt them financially. Although you are talking about claims appeals not having a written SPD could cost your client big money in a subrogation case. The SPD will be requested by any sharp atty in a personal injury case. Without clear subro language in the SPD, the court might apply whatever default rule is in place. Here in the 6th Circuit (i'm in Ohio) the Courts will apply the make whole rule if the plan does not specifically reject it. On a large dollar claim this could be plenty. Is this a small employer or large employer? Any reinsurance involved here?

I guess I don't what else would motivate your client to comply with the law since there doesn't seem to be any other consequences than what you already described. However, this would not be the case if one of the Patient Protection Acts ever passes and the patient has the right to punitive damages. It distresses me to hear that you actually have a client that feels it's OK to operate like this. This just adds fuel to the fire of people who want a Patient Protection Act, because of the bad administrators such as this. What do you mean by the client never pays claims just denies by default? Do you mean appeals of claims? If they are not paying any claims, they don't have a health plan. If the DOL investigates this plan based on a complaint, finds total lack of compliance, are there any DOL or tax consequences?

How small of a threat do you consider it to be to be sued in federal court and having the court apply the de novo standard of review, granting no discretion to the Plan Admininstrator's decision? Or should I say non-decision. If I were the plaintiff's atty, I think I would also raise the bad faith issue.

Sure it would! Just imagine what would happen with INS helping you. Ex-employee goes to jail for falsifying SSN's--no COBRA here.(although maybe for the dependents, but if they're here illegally too....) Ex-E is detained pending deportation hearing--no COBRA here either, govt pays for their care. Ex-E is deported--does your plan cover services rendered outside of the US? Especially if it is an HMO?

Could you clarify this a little? Are they providing reduced level of benefit at a time where there would be none (pre-ex time minus amount of creditable coverage) or are they providing reduced level even though there is creditable coverage? Either way I think you have a problem. If the first scenario, aren't you discriminating among similarly situated individuals if some of your enrollees have pre-ex partially waived and others don't? If they are not properly crediting creditable coverage you also have a problem.

I seem to recall some case law re alienage but I thought this applied to "legal" aliens. In the case of neonatal care, if the child was born in the US I thought that made him a US citizen. Anyway, I wouldn't offer COBRA. What did you do when you found out they were not legal? Call INS? I would worry more that offering COBRA might get you in even more trouble with the Feds. Has INS weighed in on what you should do? I think if you are relying on what INS tells you to do you have a pretty good defense.

There is no simple answer to your question. "Gross Misconduct" means whatever a court says it means. You need to check Circuit Court rulings to get an idea of what a court will allow as gross misconduct if you are asking, as I think you are, what constitutes gross misconduct for purposes of not having to offer COBRA. Is that why you are asking? Some things are more easily identified as gross misconduct--destroying company property, divulging info that the company considers intellectual property, serious harm to fellow workers, etc.

No holding coming out of the Ninth Circuit surprises me. As usual, I don't agree with it. If ERISA doesn't apply to foreign (non-US) health plans, I see no reason why it should apply to Tribal plans. It is my understanding that they are sovereign nations. Isn't that why they can operate gambling institutions in spite of state law? Of course, the US govt did step in on a murder case in Florida despite the tribal govt claim of sovereignty. This is just my opinion--I like the idea it would not apply based on sovereign immunity, not exemption as a govt plan.

Just a stab at this (I'm at home and away from my resources) but I thought Tribal govts were a type of sovereign govt unto themselves. Not sure how this is addressed in ERISA but I'd sure like to see a legal discussion on this if they are indeed covered under ERISA.

There was a discussion on this same issue many months ago. This situation generally makes me very uncomfortable. Even before the HIPAA Privacy Rules were final I think you had issues of confidentiality and who exactly at the company was looking at this information. You don't need a diagnosis to know what it wrong with the employee--some claims speak for themselves. The employer needs to ask themselves: What legitimate need do I have to know about these claims; can I accomplish this need by having completely de-identified information; and is this need justified against even the appearance of impropriety. For example, you have an employee submitting multiple claims over a period of months that cost the plan a lot of money. You decide to terminate the employee for an entirely different reason, such as a need to reduce staff...how comfortable are you going to be if the employee makes a claim that he was fired because he cost the plan a lot of money, or that he had a medical condition such as AIDS. If you don't know how much he cost or what is wrong with him, you don't have to deal with the claim. Beyond this, I believe that the HIPAA Privacy Rules will severely restrict the employer from reviewing claims before they are sent to the TPA. The Rule says that those employees performing the functions of the plan must be separated by a "firewall" from other employer departments. They should not be the same employees making hiring, promotions, firing decisions. It really is their liability and not yours but I can see why you are uncomfortable with this. Are they actually opening claims or can the employee submit them in a sealed envelope to be opened by the TPA? Tell them to carefully review the new Privacy Regs and comments and consult with an attorney if they still want to do this after reading the rules.

An SPD is a Summary Plan Description. You should have an SPD and a Benefits Summary, or a Certificate of Insurance if it is a true insurance plan. If you don't have these request them now. How were you told it was not covered? Send in a claim or pre-approval and you must be given a written denial of coverage with a stated reason. Once you have that you can determine your next step.

Can anyone suggest a good publication, seminar, etc. to give me a good, basic understanding of issues involved in a Taft-Hartley Health and Welfare Benefits Plan. We are the TPA only. The trust is being set up by an attorney. I just need enough to protect the TPA and spot possible compliance issues.

Perhaps they are talking about the new claims rules for ERISA plans that require a shorter turn-around time for claims decisions. Our claim decision is tied to payment--most of our claims are post-treatment so the only way the patient knows for sure the claim is allowed is when they receive an EOB.

You probably should have started last year. All is not lost. There are many very good sites out there--I highly recommend HIPAAdvisory. I am trying to get a corporate committment to increase our effort and this is one of the first things you must do, get management's committment. We have already begun corporate awareness of the issue, had our employees sign a stricter confidentiality statement, went to a few seminars, etc. Our focus as a TPA is difficult. We administer Self-funded plans (which must be in compliance and will look to us for this assistance) and 2 insured product lines (actually part of the same entity) that we must bring into compliance. At the same time, we must comply with the requirements in regards to all other covered entities such as our hospitals and physicians. Your ability to transmit electronic claims according to the code set standards is something your IT/IS team should be completing.

One similar experience although not a wilderness camp. In that case, the plan (self-funded) agreed to pay for therapuetic treatments received while "enrolled". It took some negotiating to get a fee schedule listing out therapies separate from the custodial confinement aspect. Parent then paid the balance. If there is legitimate mental health services rendered by licensed professionals I have no problem paying for that portion of the cost. Is there any state law controlling coverage or are these self-funded plans?

Around here, you could take that farm and sell it to a developer for a couple of million bucks, cut it up into postage stamp size lots with 1/2 million dollar homes on them and call it something bucolic. So yes, the farmer could be richer than your story's rich man.

It's been a few years but I think I remember this--a lawyer cannot form a partnership with an non-lawyer if any of the activities of the partnership is the practice of law. You also can't share fees with a non-lawyer. I know that this may vary by state and that there has been lots of consideration for modifying this but most of this is still true. Perhaps the attorney is in-house counsel for the consulting firm?

I apologize in advance for not knowing much about this, and am hoping someone can answer my question and point me in the direction of further information. If a group currently self-funds and also offers a flex spending option to cover co-pays, co-insurance, etc. must the plan hold a new open enrollment for the flex option if they are now offering an increased dental benefit? There will be an open enrollment for the new dental benefit which now covers orthodontia. May eligible employees 1) sign up for flex through an open enrollment and/or 2) increase or decrease the amount withheld? Thanks for any input, I am going to search as much as I can in the meantime.

The DOL issued final rules on HIPAA non-discrimination a few months ago. I accessed the rules from this site. It's true--you may not exclude someone from participating in a plan due to these types of activities but you may exclude coverage from injuries arising out of. I'm not sure if your state insurance law would allow these types of exclusions but self-fundeds may. I, however, do not see motorcycling as a dangerous activity but an alternate means of transportation. I would not cover off-road motorbiking or sky-jumping, but these are different from motorcycle riding as far as I am concerned.

I have a question about Credit Unions and a post I just read. I was unaware of the federal chartering/federal instrumentality connection. We are trying to coordinate benefits with an employer plan offered by a CU. The plan insists that it offers primary coverage to its employees only if they have no other coverage, but if their spouse has coverage the plan becomes a supplemental plan only. We have requested plan language and an explanation. Something doesn't sound right to me.

Each COBRA QB has an independent right to COBRA coverage. We would not drop the QB spouse without the spouse's consent. If the employee QB does not want to continue dependent coverage, the QB spouse still has the right to single QB coverage.

I agree with Kip--no coverage in self-funded unless plan language specifically allows it. Just not sure on state law, although I've been surprised enough times on what some states allow/mandate, usually those liberal leaning states.

An answer is going to depend on what state you are located in, if the benefits are provided by health insurance or by a self-funded benefits plan. For example, federal govt employees may cover grandchildren in certain instances provided the employees hiring office approves. In Ohio, an insurance company does not have to cover children who are not legally adopted by the enrollee. There is also a distinction between legal custody and legal guardianship. As a first step, check the language of the plan covering the enrollee to see if the plan allows it. If it is a true insurance policy, you can get your state's department of insurance to interpret whether the child should be covered if there is any question of eligibility.

It's been my experience that usually only the sickest qualified beneficiaries opt for COBRA coverage. Why else would you pay hundreds of dollars for continuation coverage unless you have high medical bills every month. The truth is most employers wouldn't offer continuation coverage at all, let alone for 18-36 months, unless they were required to do so by law. Even then some try to avoid coverage. Employee (and dependent) coverage is just that--a benefit for employees. Once you are no longer an employee a company has no incentive to keep you happy or taken care of. This may seem to be a harsh response to your posting, but remember, no law requires an employer to offer health insurance in the first place.