“Enough is Enough. Fight Back!!!! Generate More Money for your Practice”

1. Annual Clinical Assembly  American College of Osteopathic Surgeons Las Vegas, Nevada  November 14-17, 2013 “Enough is Enough.  Fight Back!!!! Generate More Money for your Practice” Thomas J. Force, Esq. The Force Law Firm, PC(631) 665-1832 Ext. 5 Tforce@forcelaw.net Thomas J. Force, President The Patriot Group (631) 665-1880 Ext. 7 TForce@ patriotcompli.com

2. Do appeals really increase revenue? Is it worth it? Lets evaluate some case studies…

3. Claims Submitted and Paid (Before ERISA APPEALS) Case Study #1 Procedure: In patient consult and Lap Band Adjustment CPT Code: 99233, S2083 Charge Amount: $13,000.00 Initial Payment before appeal: $255.65 (1.9 % of total charges) Payor: BCBS Blue Card Case Study #2 Procedure: ER Consult and Laparoscopic Cholecystectomy CPT Code: 99284, 44970 Charge Amount: $45,000.00 Initial Payment before appeal: $25,580.00 (56.8 % of total charges) Payor: United Healthcare

4. Claims Submitted and Paid (Before ERISA APPEALS) Case Study #3 Procedure: In patient consult, Laparoscopic Appendectomy, umbilical hernia repair CPT Code: 99223, 44970, 49585 Charge Amount: $73,000.00 Initial Payment before appeal: $19,400.00 (26.5 % of total charges) Payor: Oxford Case Study #4 Procedure: ER Consult, Lap Band Adjustment CPT Code: 99283, S2083 Charge Amount: $15,000.00 Initial Payment before appeal: $769.00 (5.1% of total charges) Payor: United Healthcare

5. Claims Submitted and Paid (Before ERISA APPEALS) Case Study #5 Procedure: ER Consult, Laparoscopic Appendectomy CPT Code: 99284, 44970 Charge Amount: $ 50,000.00 Initial Payment before appeal: $ 17,905.49 (35.8 % of total charges) Payor: Cigna Case Study #6 Procedure: Removal of Gastric Band, Lysis of Adhesions CPT Code: 43772, 49320 Charge Amount: $ 40,000.00 Initial Payment before appeal: $ 836.75 (2.0% of total charges) Payor: Empire BCBS

6. Claims Submitted and Paid (After ERISA APPEALS) Case Study #1 Procedure: In patient consult and Lap Band Adjustment Charge Amount: $ 13,000.00 Initial Payment before appeal: $ 255.65 (1.9 % of total charges) Payment after appeal: $ 10,655.65 (81.9 % of total charges) Case Study #2 Procedure: ER Consult and Laparoscopic Cholecystectomy Charge Amount: $ 45,000.00 Initial Payment before appeal: $ 25,580.00 (56.8 % of total charges) Payment after appeal: $ 45,000.00 (100 % of total charges) Case Study #3 Procedure: In patient consult, Laparoscopic Appendectomy, umbilical hernia repair Charge Amount: $ 73,000.00 Initial Payment before appeal: $ 19,400.00 (26.5 % of total charges) Payment after appeal: $ 62,050.00 (85% of total charges)

7. Claims Submitted and Paid (After ERISA APPEALS) Case Study #4 Procedure: ER Consult, Lap Band Adjustment Charge Amount: $ 15,000.00 Initial Payment before appeal: $ 769.00 (5.1 % of total charges) Payment after appeal: $ 15,000.00 (100% of total charges) Case Study #5 Procedure: ER Consult, Laparoscopic Appendectomy Charge Amount: $ 50,000.00 Initial Payment before appeal: $ 17,905.49 (35.8 % of total charges) Payment after appeal: $ 50,000.00 (100 % of total charges) Case Study #6 Procedure: Removal of Gastric Band, Lysis of Adhesions Charge Amount: $ 40,000.00 Initial Payment before appeal: $ 836.75 (2.0 % of total charges) Payment after appeal: $ 40,000.00 (100% of charges)

9. Out of Network Claims Discussion • Use ERISA to appeal denied and under-reimbursed claims • Need Valid AOB and Patient Retainer • Ensure that consents include statement that patient is ultimately responsible for deductibles, coinsurance and balanced bill • Fee Forgiveness a big problem for OON providers (i.e. insurance fraud) – how to avoid • Importance of Charity care Program

10. OON Claims Case Study Benefits of being an OON Provider * Higher Reimbursement Rate * Don’t have to Work as Hard Disadvantages of being an OON Provider * Plans Don’t Accept AOB – Checks sent to Patients * Balance Billing Responsibility * Lower Patient Volume

11. ERISAFriend or Foe? A common misconception in the medical and insurance fields is that ERISA guidelines are the enemy. It only seems that way because insurance companies have tried to work around ERISA or have simply ignored it. If you show them that you know your rights and are not afraid of enforcing them, you will be able to get more of your claims paid at a higher reimbursement rate.

12. Are You Getting the Appropriate Response from Insurance Companies? There are certain statutory rules and regulations ERISA plans must follow when responding to claims and appeals: • “Adequate” notice in writing for denied claims, providing “specific reasons,” the “specific plan provisions,” and a description of any additional information needed to perfect the claim. – 29 U.S.C. § 1133(1) and 29 C.F.R. § 2560.503-1(g) and (j) – more on this later. • Opportunity for a “full and fair review” of the denial - 29 U.S.C. § 1133(2) – more on this later.

13. Timing of Benefit Determination (Response to Claims) • Benefit Determination must be provided by the Plan within 30 days of receipt of claim submission for Group Health Plans or within 72 hours of receipt for urgent care claims and 15 days of receipt for pre-service claims (this can vary depending on the plan) – 29 C.F.R. § 2560.503-1(f) and (h) • If you received a medical necessity denial, you can request the scientific explanation “applying the terms of the Plan to the claimant’s medical circumstances” if it was not included in the denial - 29 C.F.R. § 2560.503-1(g) and (j) • If claim involved urgent care, ERISA requires a “description of the expedited review process applicable to such claims.” 29 C.F.R. § 2560.503-1(g)(2)

14. Timing of Notification of Benefit Determination on Review (Responses to Appeals) • As a General Rule, notification of the Plan’s benefits determination must be provided “not later than 60 days after receipt of the claimant’s request for review of the plan.” • 29 C.F.R § 2560.503-1(i)(1) – except for special circumstances requiring extension of time. • For Group Health Plans, notification of the Plan’s benefit determination is as • follows: • Urgent Care Claims Within 72 hours of receipt • Pre-Service Claims Not later than 30 days of receipt • Post-Service Claims Not later than 30 days of receipt • (a.) If Plan requires 1 appeal -- not later than 60 days after • receipt • (b.) If Plan requires 2 appeals – not later than 30 days after receipt • See 29 C.F.R § 2560.503-1(i)(2)

15. Manner and Content Rules • 29 C.F.R 2560.503-1(j)(g) • A Plan Administrator must provide the following: • Specific reason or reasons for the ABD • Reference to the specific plan provision on which the benefit determination was based • Statement that claimant is entitled to receive, free of charge, “reasonable access to and copies of all documents, records and other information relevant to the… ABD” • A statement describing the Appeals procedure • For Group Health Plans, • (i) internal rules, guidelines and protocol if relied upon for ABD • (ii) if based upon medical necessity or experimental treatment, • explanation of “science or clinical judgment” used to make • ABD, applying terms of Plan. • *WAVIER OR ESTOPPEL??

16. Standard of Care for Judicial Review • ERISA actions are essentially breach of contract actions where the court has to compare the plan benefits with the service to determine if the benefits denied were properly excluded from coverage under the plan. • The Court will determine whether or not the plan administrator abused its discretion in making the Adverse Claims Determination (whether the Plan Administrator acted in an “Arbitrary and Capricious” manner).see Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir 2012).

17. Standard of Care for Judicial Review • Factors Courts have considered in making a determination of “arbitrary and capricious” (or abuse of discretion) are: • Where the Plan Administrator has a Conflict of Interest (where the same entity makes the benefit determination and has responsibility for payment of claim) • Inconsistent Reasons for a Denial • Failed to Provide Full Review of a Claim • Failed to Follow Proper Procedures in Denying the Claim see Harlick v. Blue Shield of California, 686 F.3d 699 (9th Cir 2012)

18. What happens if the Court finds that Plan Administrator acted in an “Arbitrary and Capricious” manner in Making their Adverse Benefit Determination? • The Court will conduct a “De Novo” Review which means they will review the coverage determination without considering or in any way deferring to the Plan Administrator’s Decision. They will make a decision on their own by reviewing the Plan Documents.

19. Case Law “The conclusory assertion that GHT was not ‘medically necessary’ was insufficient to deny Weiners’ claim. See 29 C.F.R. § 2560.503-1(g) (stating that a claim denial should set forth the ‘specific reason or reasons for the adverse determination’ separate and apart from ‘reference to the specific plan provisions on which the determination is based’).” Weiner v. Health Net of Connecticut, 311 Fed.Appx. 438, 441 (2d Cir. 2009). “A plan administrator may not fail to give a reason for a benefits denial during the administrative process and then raise that reason for the first time when the denial is challenged in federal court…” Harlick v. Blue Shield of California, No. 10-15595, 17 (9th Cir. 2012).

20. Case Law (continued) “The reason for this rule is apparent: we will not permit ERISA claimants denied the timely and specific explanation to which the law entitles them to be sandbagged by after-the-fact plan interpretations devised for the purposes of litigation.” Flinders v. Workforce Stabilization Plan of Phillips Petroleum Co., 491 F.3d 1180, 1191 (10th Cir. 2007). “ERISA insurer bears burden of proof in demonstrating applicability of exclusion. Farley v. Benefit Trust Ins. Co., 979 F.2d 653, 658 (8th Cir. 1992).

21. Ignored Claims and Appeals Everyone in this room has had their claim forms and appeals completely ignored by insurance companies. If they do reply (and deny/underpay your claim), the explanation is non-existent or weak. While it may seem that the next logical step is to re-submit or appeal again, the Courts have found that insurance companies engaging in this behavior have opened themselves up to litigation.* * Before litigating, discuss your options with your attorney.

22. Exhausting Administrative Remedies • Most insurance policies require either one or two levels of appeals before you can sue. To be on the safe side, appeal denials and low payments at least twice. • That being said, if your appeals and claims are being completely ignored, discuss going straight to litigation with your lawyer. By failing to respond to your claims, the insurance company has waived their right to decide the claim on the merits (29 C.F.R. § 2560.503-1(l)).

23. Case Law “[E]ven for timely denials on the merits, ‘it is an abuse of discretion for ERISA plan administrators to render decisions without any explanation.” Jebian v. Hewlett-Packard Co. Employee, 349 F.3d 1098 (9th Cir. 2003) quoting Bendixen v. Standard Ins. Co., 185 F.3d 939 (9th Cir. 1999).

24. Case Law (continued) “In Nichols, after Prudential failed to timely issue a final decision on Nichols’ appeal from a denial of benefits, she went directly to federal court and sued her insurer under ERISA. We held that her claim was ‘deemed denied’ by Prudential’s inaction and that her administrative remedies were exhausted by operation of law.” Strom v. Siegel Fenchel, 497 F.3d 234 (2d Cir. 2007) quoting Nichols v. Prudential Ins. Co., 406 F.3d 98 (2d Cir. 2005). What Does That Mean for Me? When claims are “deemed denied” or considered an “abuse of discretion,” the courts review the claims de novo (from scratch), instead of deferring to the insurance company’s decision. Also, the insurance company has to prove that the denials were legitimate under the plan policy… AND administrative remedies are deemed exhausted.

25. What Prevents Insurance Companies From Retaliating Against My Patients and My Practice? “It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C. 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. “ 29 U.S.C. §1140 What is my Remedy? Injunction Relief and Complaint to U.S. Department of Labor

26. Include ERISA Demands with your Appeal Letters “Except as provided in paragraphs (h) (3) and (h) (4) of this section the claims procedures of a Plan will not be deemed to provide a claimant with a reasonable opportunity for a “full and fair review” of a claim and adverse benefit determination unless the claims procedure provides that a claimant shall be provided upon request and free of charge, reasonable access to and copies of all documents, records, and other informationrelevant to the claimant’s claim for benefits.” 29 C.F.R. §2560.503-1(h) (2) (iii) (emphasis added). “A document, record, or other information will be considered “relevant” to a claimant’s claim if such document, record, or other information: (i) Was relied upon in making the benefit determination; (ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) Demonstrates compliance with the administrative processes and safeguards required pursuant to paragraph (b) (5) of this section in making the benefit determination; or

27. Include ERISA Demands with your Appeal Letters In addition, pursuant to 29 U.S.C.A. § 1021(a)(1) & (2) and 29 U.S.C.A. §1024(b)(4), the administrator is required to supply a participant or his/her designee with the Summary Plan Description ("SPD") and, upon written request. Pursuant to 29 U.S.C.A. § 1132 (c), if an administrator fails or refuses to comply with such a written request within thirty days, the administrator could be held personally liable to the participant in the amount of up to $110 a day from the date of such failure or refusal. Federal Courts have issued severe sanctions for non-compliance.

28. What if ERISA Demands are Ignored? See Weddell v. Retirement Committee of the Whirlpool Production Employees Retirement Plan, No. 3:07-cv-0006, 2008 WL 343137 (N.D. Ohio, Feb. 5, 2008)(plan administrator fined $14,000 by DOL). See also Glista v. Unum Life Ins Co of America, 378 F3d 113 (1st 2004)(court found that not disclosing and disregarding an internal memo document was powerful evidence of arbitrary and capricious conduct by the plan administrator).

29. Summary • Insurance companies are held to a very high standard under ERISA. • They have not been living up to those standards, in part because they do not think you know any better. • Submit your claims and appeals on time and keep track of insurance companies responses (keep copies of all insurance company responses). • Make sure when you are submitting appeal letters that you mention that you know your rights and their responsibilities (keep copies of all appeal letters). • Do not be afraid to include statute and case law in your letters. This lets insurance companies know that you are serious, and you know your rights. • When they still refuse to follow the law, consult an attorney about enforcing your rights.

30. Please don’t hesitate to contact us with questions Thomas J. Force, President The Patriot Group (631) 665-1880 Ext. 7 TForce@ patriotcompli.com Thomas J. Force, Esq. The Force Law Firm, PC(631) 665-1832 Ext. 5 Tforce@forcelaw.net