EBSA Offers Guidance For Denied Health Care Benefit Claims After OIG Reports EBSA Did Not Have the Ability to Protect the Estimated 79 Million Plan Participants in Self-Insured Health Plans from Improper Denials of Health Claims
On November 18, 2016 the Labor Department’s Office of the Inspector General (OIG) Office released an audit conducted in order to assess the Employee Benefits Security Administration’s (EBSA) ability to protect the estimated 79 million plan participants of self-insured health benefits from improper claim denials, concluding that the EBSA did not have the ability to protect plan participants from improper health care claim denials.
As we have written about many times in the past, improper denials of health benefit claims can have catastrophic effects on the health and financial security of all health plan participants and their families. Improper or wrongful health claims denials not only impact plan participants directly but also adversely affect health plan and their plan administrators. As more and more health plans are caught up defending questionable claims processing tactics, resulting in costly litigation expenses.
According to the OIG audit, the EBSA is charged with regulating all Employee Retirement Income Security Act (ERISA) self-insured health plans and is therefore responsible for protecting the estimated 79 million members in those plans against improper health claims denials.
The EBSA issued clear guidance to patients, self-insured health plan and service providers through its comprehensive response to the September 1, 2016 OIG draft audit report. The EBSA reiterated its obligation to administer and enforce fiduciary, reporting and disclosure provisions of Title I of the Employee Income Retirement Security Act, of 1974 (ERISA), through its own enforcement program and education and outreach programs.
The EBSA enforcement program seeks to detect and correct violations that result in monetary recoveries for employee benefits plans, participants and beneficiaries, and to obtain corrective remedies, including but not limited to, broad-based reforms for large plans or common service providers (i.e. TPA’s). The EBSA also works to inform the public with regard to benefits issues so plan participants have access to information about their rights and responsibilities under their respective plans. This allows plan participants and their beneficiaries the chance to obtain any necessary plan corrections before serious financial damage is done. The EBSA’s education programs also target plan sponsors and other plan officials, service providers and plan participants to inform them of their rights and responsibilities under ERISA.
The EBSA response outlines the steps it has taken in the past and also offers guidance to all stakeholders when confronted with possible improper health claim denials. According to the EBSA, a substantial portion of the benefits advisors work involves assisting individuals with wrongfully denied health plan claims. Accordingly, of particular concern in most investigations is whether fiduciaries are carrying out their fiduciary duties appropriately, especially with regard to monitoring service providers; the appropriate payment of plan expenses; the avoidance of self-dealing and prohibited transactions and adherence to required claims procedures and prudent claims administration, among other issues.
The EBSA also confirmed that its Health benefits Security Project (HBSP) would continue. The HBSP is a comprehensive national health enforcement project, combining EBSA’s established health plan enforcement initiatives with new protections afforded by the Patient Protection and Affordable Care Act of 2010 (ACA). The HBSP involves a broader range of health care investigations, including compliance with ERISA, investigations of plan service providers to ensure their claims processes are providing benefits as promised and that fee arrangements are transparent, among other things. The EBSA further noted that it actively seeks input from the public as a compliment to its enforcement program.
Specifically, the EBSA has declared the participant assistance program as a source of some of its best investigative leads, and producing hundreds of cases per year-cases that, in the absence of this program, might not have been discovered. In fact, the EBSA espouses the position that the most effective approach is to focus on targeted areas of need based on leads EBSA receives from participant complaints, recommendations from outside experts such as advocacy groups, private litigation, states and other federal agencies.
In addition to this work, the EBSA also offers guidance on implementing and adhering to internal claims and appeals provisions under the ACA.
With respect to the OIG Audit recommendations, the EBSA is advocating for new 5500 Schedule J reporting requirements to include a range of claims payment data, including information on how many post services benefit claims (Claims) were submitted during the plan year, how many Claims were approved during the plan year, how many Claims were denied during the plan year, how many Claim denials were appealed during the plan year, how may appeals were upheld as denials, how many were payable after appeal and whether there were any Claims that were not adjudicated within the required timeframes. Plans would also be asked to report the total dollar amount of claims paid during the plan year.
While these are recommendations, it appears the EBSA is providing guidelines or possible “Red Flags” for possible investigations into violations. With respect to the OIG recommendation that the EBSA begin reviewing claims information it already collects, the EBSA has made it clear that it is committed to conducting focused yet robust health investigations that seek global corrections of violations in order to restore losses to participants who were harmed. Finally, consistent with EBSA’s HBSP, current and future investigations will generally include an operational review to determine health plan compliance (e.g. by conducting claims analysis to identify improper claims processing or improper benefit denials).
Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.