Employee Survival Guide® - Healthcare Claims Denied Because Not Medically Necessary-and How to Win Them

Episode Date: February 23, 2023

In this episode of the Employee Survival Guide, Mark addresses the important topic of healthcare claim denials because the medical treatment is deemed by the health insurance carrier as "Not Medically Necessary".  This is the state of healthcare insurance practice across the country and employees are not being told a thing about this practice of claim denials- until now. Mark is an ERISA benefits attorney, as well as an employment attorney, and he walks through the steps you need to go through when you get a denial letter from a health insurance company.  He provides the quick insight you need to get the claim approved, especially when the healthcare treatment is needed in an emergency situation.  Mark explains the insurance game and how to beat it.  If you listen to the episode, you will avoid the insurance game and get the benefits you are entitled to ASAP.  The content of this website is provided for information purposes only and does not constitute legal advice nor create an attorney-client relationship.  Carey & Associates, P.C. makes no warranty, express or implied, regarding the accuracy of the information contained on this website or to any website to which it is linked to. If you enjoyed this episode of the Employee Survival Guide please like us on Facebook, Twitter and LinkedIn. We would really appreciate if you could leave a review of this podcast on your favorite podcast player such as Apple Podcasts. Leaving a review will inform other listeners you found the content on this podcast is important in the area of employment law in the United States. For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.

Hey, it's Mark here and welcome to the next edition of the Employee Survival Guide where I tell you, as always, what your employer does definitely not want you to know about and a lot more. Hey, it's Mark and welcome back to another episode for you. This one is basically not rehearsed off the top of my head. It's involving an issue that I experience a lot. And the topic is denial of medical healthcare through your employment, through your employer's healthcare benefit plan. The denials are based upon what's called not medically necessary. So how this would

happen is that you would receive, you would go to the doctor's office or let's say, for example, the client I have right now went for surgery and the surgeon performed the surgery, obviously it was something serious, enough to warrant surgery in a hospital in an overnight stay. And the example here is that the employer – sorry, the health insurer – and I will tell you who the health insurer is. It actually is Anthem Blue Cross Blue Shield who has coverage all over the country. So the denial was for one night stay after the surgery. Well, you can imagine the amount of pain one would be in the post-surgery condition, you know, taking medications for pain.

I mean, a knife was used, instrumentation was used to position and stationary the body limb to conduct such surgery. So you actually have two areas of puncture into the body and then the surgery itself. So the insurer has denied the claim for one night stay, and the patient actually stayed less than 24 hours. So what do you do with that? And the same process – and I'm bringing this to your attention because it's the same pattern of behavior that occurs in a variety of cases I see where clients call me and saying I was denied health insurance coverage for a claim. And what can you do about it? claim and what can you do about it? Well, let's go through the basics first and then you'll have your answer at the very end in terms of the overall process of what you should do about it because that's the purpose of the podcast episode. So how to deal with denial of not medically necessary medical treatment from an insurer like Anthem. Anthem is no different than the other

carriers as well. They all do the same thing. So if you have health insurance through your employment, it's done and provided for under a federal statute. That's called the Employee Retirement Income Security Act, the Employee Retirement Income Security Act. I know it's a long name. They made it, developed it by Congress in 1973, I think. Its acronym is called ERISA, E-R-I-S-A. And it's an antiquated statute. It has not been amended by Congress since its formation. It should be. There are multitudes of legal cases involving ERISA. As an employment attorney, I'm also what's called an ERISA

attorney. I actually have the wherewithal to go into the ERISA practice, not because I wanted to, it's because clients asked me to. I do ERISA in a variety of formats, having to do people's pension, their 401k, or short and long-term disability benefits. And in this situation, our example, healthcare benefits, all considered under ERISA. And ERISA uses the same process for participants to follow. And I'm going to explain that to you now. So when you get a denial letter from an insurance carrier saying, in this case, treatment for medical benefits was not medically necessary, they're going to send you a denial. The denial itself must be written in a manner that you can understand it. Not for the lawyer to understand it, but for you as the participant to understand it.

And it must say exactly the reason why you were denied your claim. That's all driven by previous case law by the Supreme Court of the United States that says that and requires that. I'm sure the statutory code sections in the enforcement regulations also say the same thing. The next step is, well, what do you do when you have a denial? Can you as an individual file your own appeal to your insurance company? Yeah. Actually, that's the law. ERISA says you have to file a written appeal, and you can do that in a letter. You don't need an

employment attorney to do that, although I can help you. And what you'd say is that the claim was unreasonably denied or arbitrarily and capriciously denied. That's the standard, typically. And you have to say, well, why is it denied arbitrarily and capriciously denied. That's the standard typically. And you have to say, well, why is it denied arbitrarily and capriciously denied? You have to get your doctors to say and write a letter to the insurance company saying why the treatment was medically necessary. And you have to get them – it's not easy to get your doctor to do that. So you're going to have to play this game. And I'm sorry that I have to disclose this to you.

But it is an insurance practice game that even I as the attorney, who I've done a risk practice for 26 years, I have to deal with it as well. And it's easy. It's not that difficult. But the reason why they put up these blockades for the average person and make it seem like it's difficult because they don't want you to file an appeal. They don't want to pay your claim. So that's the short of it. It's just they don't want to pay your claim. It doesn't make it right or wrong.

It's simply that they're in business to make money and they don't want to pay your claim unless you make them. So the purpose of the podcast is to make them. So here's the example I gave you of the denial of one night stay, actually less than 24 hours, and saying it's not medically necessary after a surgery. The patient is in pain, taking medications. And I will add further to the fact pattern, the client is not able to get out of the bed per the doctor's instruction because it involved a surgery on the hip. Okay? So you can't get out of the bed per the doctor's instruction because it involved a surgery on the hip. Okay.

So you can't get out of the bed. You're having to use a nurse to go to the bathroom in a bedpan. You know, it's, you know, not – you now get the picture that it's not necessarily a nice scene. And so the insurance company says, well, you can't stay in the hospital. So you have to get your doctor to write a letter. And you have to do it right away. You actually have a period of time under

your plan document. There's actually a plan that goes along with your health insurance benefits. And you have to look at it. It's probably in your employer portal. And it explains all the procedures to file an ERISA appeal to the plan administrator. In this case, it's Anthem, the insurance carrier. And I would also recommend you send a letter to your plan sponsor. That's called your employer. And so you would document it twice. And there's a reason for that because sometimes there are claims that happen where the employer denies the claim as a plan sponsor, and that's called a retaliation claim under ERISA. It's rare. It does happen. Typically, it coincides with people having discrimination claims as well.

But I don't see it that often. So as the process goes, you file your appeal. Let's now assume you have your doctor's letter. Maybe you have more than one letter and you should. But generally, you're going to have your surgeon write a letter and it's going to say it's medically necessary. Well, then you file it. Then you have 45 days for Anthem to respond. And this is assuming you've already gone and had the treatment. So it's not like an emergency. And I'll give an example of what you do in an emergency situation. So you have to wait 45 days. And typically,

the insurance carrier will say, we'll take another 45 days, a total of 90 days before you yourself can declare if no response from Anthem or any insurance carrier to your claim and appeal that you declare the process futile to move any further. And you would essentially document that in a letter saying the claims process is not only arbitrary and capricious, but it's also a futility to go any further. Unfortunately, the Congress has given a shaft to you. They said that your process of procedure is to go to the insurance, carry an appeal. But after that, you got to go to federal court. Now, who can really do that? It's a pain in the ass to do that. And I do it, but that's my job. But that's why it's an antiquated statute. It's not modified.

There are other ways to handle it as well. You can – even though it's an ERISA claim, you can write a letter to your department of insurance and complain about it there as well because these are insurance policies. These have to be regulated by the state as well. So that's another avenue of relief. But the bad part about this is you have to file a claim or literally what's called an appeal to the federal court to appeal the matter to get reimbursement. So let's say the cost of the overnight stay here is, I don't know, $4,000. I mean it sounds a, but you get food and drink and care, I guess. I'm just using that as a number. But is that enough to go to federal

court and fight over? That's the point. That's why the insurance companies deny the claim. So at this juncture, if you're at that stage of the process, I would definitely consider working with an ERISA attorney, no matter who it is. There's ERISA attorneys all over the country or the colleagues of mine that I work with. And you can find a jurisdiction in any federal district court throughout the country for no matter where you are located. You can literally, what's called forum shopping. And it doesn't matter because that's the way the statute's set up. So definitely want to reach out to an ERISA attorney at that juncture. Even though it's $4,000, that added weight of that ERISA attorney and their analysis to the carrier will cause the carrier to say, well, why do we want to fight that over $4,000?

Because now they have an ERISA attorney on board. So now you get the strategy. That's why you would use that for a limited purpose. Not necessarily to sue anybody, but you want to show them it's possible that you might sue them by hiring a person like me. So what do you do in this circumstance where you have an emergency health care need? All right. This actually happened to the same client.

The issue there was the doctor had ordered a pre-surgery and post-surgery medical treatment. In this case, it was wound healing or hyperbaric chamber type of therapy. And again, the insurance carrier denied it because it was not medically necessary. Okay. What did I do this time? This time, I sent an appeal to the insurance carrier. I'll tell you in advance, it was approved because I did the following things. I filed an administrative appeal ASAP as soon as I got the letter. And I sent it to an email address somewhere in Connecticut to an Anthem office. And then I also priority mailed it because you got to document what you're doing. They received it. I confirmed that. And in the package of the denial letter, the employer – I'm sorry, the plan administrator, Anthem, sent also a state of Connecticut – this is real – a grievance process form that I used. And I actually was called – there was actually two documents I used.

And I actually was called – there was actually two documents I used. There was one called a request for external review, a physician certification for expedited request. And then there was also a grievance form that was used as well that I filed. And that's actually what kicked this thing over the hill for the insurance care to approve it. Because once the advocate for the state of Connecticut got involved, the health care advocate, Anthem quickly did an about face and had a discussion with the advocate, had a discussion with the medical provider for the pre- and post-op surgery medical treatment and reviewed it. And guess what? They sent me a letter. And what did the letter say? Oh, well, now your treatment is medically necessary because we talk to people. I'm pausing for a reason. What a load of BS. In one letter, it said it's not medically necessary, causing a great deal of angst and strain to the client because the client was told by her doctor to have this treatment.

And then insurance carrier says not medically necessary. Not saying anything more, probably refer to some guideline that's so self-serving that it only benefits them. But clearly to the layperson, that's a pretty formable letter that most people don't know how to handle with, and then they got to go find a lawyer. Okay, well, it came to my desk and I dealt with it. But I received the same letter after the claim was approved saying it was medically necessary. No reason was given because the law under ERISA says they don't have to give a reason when it's approved, only when it's denied. The denial letter has to state with a level of specificity to cite any guidelines, protocols, regulations, or otherwise of why the claim is denied.

That's a standard ERISA type of response that is mandatory in these letters. But what a load of nonsense that people have to go through. I mean, this is me looking at this and talking about it because I know this blindfold that this is what they do. But for the average consumer of healthcare, this is a very scary event. And when the doctor says you need something and it's under emergency and it's around your surgery, well, it's an unintended emotional situation that the insurance carriers and the employers shouldn't put people through. So that's what you do in the sense of, in the case of the emergency situation. You really, if you are confronted with an emergency situation

where you need healthcare, you really do need to reach out first to the state advocate. There's probably one in every single state. So a state health care advocate. Don't wait. Jump. Run. Make phone calls. Document. Send letters.

Priority mail. Document things. But also send the same identical letter. That's what I did in my case. I sent the appeal to the ERISA plan administrator, in this case Anthem, with the same address at the top of the form, a letter I sent also to the health advocate for the state of Connecticut by priority mail and by email actually as well. And so we got immediately addressed. They worked really well quickly.

And so I'm going to do the same thing now with the same – it's a real life case. I actually have it. I had to file now an appeal to the plan's a real life case, I actually have it. It's I had to file now and appeal to the plan administrator for the denial, the 23 hours of care that the patient received and also filed to the healthcare advocate because, well, they had the same problem the first time, they're doing it again. So why am I raising this to you in a podcast? I see this problem happening so often in healthcare situations that, number one, employees don't know how to use this process I just described to you because employers don't talk about it. They give them the plan and they say it's in your portal

and go look it up. Well, that's not going to really help employees because to do so, basically, if you help an insurance carrier, somehow, some way, I'm sure the premiums go up for the employer. So there's a misinformation for the employee by the employer and plan sponsor. Even though, get this, folks, the plan sponsor and the employer, they're a fiduciary to the employee, the plan participant. That's the law under ERISA. Well, when you have a fiduciary and you – like the plan administrator and the employer, they have to do things for the benefit – for the foremost benefit of the employee, meaning the beneficiary, to do no harm to them.

But a process I just described to you of denying cases of blatant disregard for rights under the ERISA saying it's not medically necessary, that's doing harm and not acting in the best interest of the beneficiary. This goes on every day, many, many cases in the healthcare industry and also in the disability community as well for disability benefits. So I want to make you aware that it's going on, it's happening, and what you can do about it. So in summary, when you see a claim that comes in for not medically necessary or deny for not medically necessary, immediately jump and start to call and write to your doctor. Get a letter to the doctor. Get a letter to the employer. Get a letter to the plan administrator, in this case the insurance carrier. Contact the employee or the health advocate for the state that you're involved with, you reside in, and immediately start documenting and paper trailing the situation and claiming that it is medically necessary.

Because more oftentimes, I can tell you, that's going to be. So that is the process to follow. If you have more concerns about that and you're in more difficult situations that are like emergency-based, that even means you have to run faster, contact the state advocate first, and then work backwards to the plan administrator. But do so because you need your health care. I will note for a matter-of-fact point that this really bothered me. The medical benefits obtained in this situation came through the exchange.

So this is the Obama exchange. So it's still Anthem providing insurance through the Obama exchange. But nonetheless, it is still happening in that format. OK, so here insurance companies acting badly, misbehaving. They do it all the time in a variety of circumstances like I just described. So now you have the insight that they're there not to help you. And even though they're legally required to help you, they're not. And they're going to play a game that you need to get past that, don't get their emotions involved and immediately attack it and

you'll find success quickly once you start behaving like a self-advocate and also expressing your rights to the plan administrator and also to the state advocate as well. So that's essentially in summary how to deal with denials of claims that are deemed not medically necessary under an employee health care insurance plan, both in the regular format and the emergency protocol format. Okay. Hope you enjoyed the podcast and talk to you soon. If you like the Employee Survival Guide, I'd really encourage you to leave a review. We try really hard to produce information to you that's informative, that's timely, that you can actually use and solve problems on your own and at your employment.

So if you'd like to leave a review anywhere you listen to our podcast, please do so. And leave five stars because anything less than five is really not as good, right? I'll keep it up. I'll keep the standards up. I'll keep the information flowing at you. If you'd like to send me an email and ask me a question, I'll actually review it and post it on there. You can send it to mcaryu at capclaw.com. That's capclaw.com.