Does this home-grown "pre-existing condition" definition con

[Guest Damien]

I have a self-funded medical plan that inserted the following language in their SPD:

[Guest Damien]

.......CONTINUED

"A pre-existing condition is a diagnosed or undiagnosed, symptomatic or asymptomatic, injury or sickness that was treated or untreated prior to enrollment in this plan or within 90 days of the persons coverage taking effect under this benefit"

To me this appears to be an end-run around the definition of pre-existing under HIPAA Sec 701, in which a condition for which medical advice, diagnosis, care or treatment was recommended or received within the 6 month period ending on the enrollment date is considered pre-existing.

The client's wording, it seems to me, would allow anything other than a catastrophic injury (with a necessarily fixed date) to be considered pre-x. If you can't prove treatment in the critical time frame, simply say the condition was "asymptomatic" and untreated and voila, it is a pre-existing condition.

Any opinions? We didn't create this plan document but we are using it to administer this plan.

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[jeanine]

Have they had their attorney look over that language? Ask for that in writing and double check your administrative services only (ASO) agreement with them for iron-clad hold harmless clauses. Of course they can say what ever they want in their plan as a self-funded plan. Just make sure you are adequately protected so you can be dismissed out of any lawsuits.

[Guest Damien]

thanks Jeanine, I believe I will take your advice.

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[Guest Patricia Ibbs]

I am familiar with that language and it is pre-HIPPA language. Your plan needs to be amended. That language is unacceptable under HIPPA.

[jeanine]

I agree with Patricia that the language is unacceptable, however I got the impression that Damien worked for a TPA and could not change the language w/o the plan's consent. I see self-fundeds wanting to do things like this all the time. In my experience, they most often have not run it by an attorney. Telling them to run it by an attorney and/or restate the hold harmless provision does 2 things: Either the plan gives up on its 'shenanigans", or it does run it by an attorney who tells them its illegal. We don't look like the bad guy and we aren't the ones offering legal advice. If they insisted on continuing to press the issue (and no one has yet) then we would determine if we wanted to drop them as a client.

[Guest Damien]

Pat and Jeanine, thank you for your feedback. Jeanine is correct, I am employed by a TPA and can not touch the language without the plan's consent.

As for having the client consult with their attorney, it was apparently their attorney who wrote this language and they are sticking to it. I will have to pin my hope on the hold-harmless agreement.

[Guest TSW]

If your client is self-funded (has re-insurance) v. self- insured, they/you run an additional risk.

Their pre-ex language does not comply with HIPPA, and likely would be thrown out if challenged by a participant in court. But the stop loss carrier could claim that they were insuring the plan document and enforce the pre-ex provision for stop loss re-imbursement purposes. The client would then be bare on this claim, and you would get dragged into any lawsuit.

For your sake I hope this is either a dental only client or a self insured one.

[Guest Damien]

Unfortunately, this is a self-funded client, with a re-insurer in place. Thanks for the tip about the potential gap between what the plan could be forced to pay for (i.e.lawsuit) and what the re-insurer would back up.

Do you know if a re-insurer would be on solid ground in the scenario you just described? If a plan was held to be liable for charges despite what the plan doc says, would that liability extend to the re-insurer as well?

[Kirk Maldonado]

I think that the re-insurer can rely on what is in the plan document. They aren't lawyers, so that they can't be held to the standard of care that they should have known that the language was deficient.

Generally, insurance companies aren't sympathetic defendants. But I think that they would win here.

[Guest TSW]

We've talked this one over with our attorneys and they also seem to think that the re-insurer would have a strong case.

We've added the following to our standard PD's:

"If any provision of this plan is contrary to any law to which the plan is subject, that provision is hereby amended to conform with such law."

The other area where you now have to be careful with re-insurance is to make sure that the exclusions in your plan match the exclusions in the stop loss contract. Many contracts now define specific exclusions in addition to those you might have listed in your PD. If they are stricter than those you have in your plan, you have another lawsuit waiting to happen.

[Guest Patricia Ibbs]

Our attorneys warned us against using any blanket statement such as you suggest. They didn't like the idea of blindly complying with unnamed sections of unnamed laws. So we didn't put in that language. So much of "good faith compliance" depends on whom you listen to!