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  1. Working To Obtain Insurance for Care: Guidelines for Providers and Families Presented at NEDA by Stacey Brown and David Christian, Avalon Hills Lisa S. Kantor, Esq., Kantor & Kantor LLP October, 2011

  2. Three Perspectives on the Process of Obtaining Insurance Coverage • Stacey Brown • Director of Nursing and Utilization Review at Avalon Hills Eating Disorder Treatment Program in Logan, Utah • Oversees all aspects of insurance pre-certifications, concurrent authorizations, appeals, external reviews, and clinical collaboration with legal counsel when insurance litigation becomes necessary • David Christian • Clinical Psychologist, Consultant, Avalon Hills Eating Disorders Treatment Program. • Trains therapists to document patient care in ways that maximize insurance authorization. • Lisa Kantor • Partner and Founder, Kantor & Kantor LLP • Litigates insurance coverage issues for eating disorders across the country, addressing issues such as medical necessity and mental health parity.

  3. The Insurance Coverage Game • For most clinicians, patients, and families, insurance is a confusing and frustrating game for which they receive little or no training. • How you play the game can help or hurt you and the outcome. • The more you know about the game the more effectively you can play.

  4. Where Do YOU Fit In the Insurance Battle? • Anyone who works in any area of patient care, is involved. • As a provider, are you treating to outcome or do you treat to benefit? Ask yourself these questions: • Does my patient still need treatment even though insurance has denied? • Am I willing to fight for the coverage I believe this patient deserves and needs?


  6. Insurance Authorization Process Depends on the Type of Plan • Types of plan funding: • Fully funded – the insurer has complete governing power until it goes to an external review. • State funded – these often are governed by different state laws; fighting often requires litigation • Self-funded (operate under ERISA – Employee Retirement Income Security Act); very often does not have an external appeal option.

  7. Insurance Authorization Depends On How You Get Your Coverage • Two ways to get coverage • Benefits obtained through an Employer (even if you pay some or all of the premium) – covered by the Employee Retirement Income Security Act (ERISA) [Note: Does not apply to government or “church” employees] • A policy purchased privately, through an insurance agent.

  8. Employer Benefits – ERISA • ERISA is a federal law that governs the insured’s rights • If a claim is denied, an appeal must be timely filed before the insured can file a lawsuit • Insurers may be given great leeway • No jury trials • Federal judges make decisions if you have to file suit to get your benefits • The judge will review the contents of the claim file and very little else • Remedies are limited to benefits and attorney’s fees

  9. Individual Insurance • Typically no appeals required before a lawsuit can be filed • Juries (not lifetime appointee judges) make the decision on your case • Evidence outside of the file may be considered by the jury • Remedies may include benefits, emotional distress, attorneys fees and punitive damages

  10. Important Differences Between ERISA and Individual Coverage ERISA Plans: No individual underwriting Cheaper – and your employer may pay Remedies restricted Individual Coverage: Individually medically underwritten More expensive and you pay all the premium Bad faith remedies available in many states


  12. WHAT YOUR INSURANCE COMPANY DOES NOT WANT YOU TO KNOW • “. . .ERISA imposes higher-than-marketplace quality standards on insurers. It sets forth a special standard of care upon a plan administrator, namely, that the administrator “discharge [its] duties” in respect to discretionary claims processing “solely in the interests of the participants and beneficiaries” of the plan, . . . it simultaneously underscores the particular importance of accurate claims processing by insisting that administrators “provide a ‘full and fair review’ of claim denials.” Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 2350 (2008).


  14. The Insurance Authorization Sequence • Verification of Benefits (be prepared for misquotes) • Intake – precertification • Ongoing concurrent reviews. • Constant collaboration with members of the treatment team. • Doc to docs – if there is a question about criteria being met, case managers will always defer to medical directors; therapists or psychiatrists may do these reviews, in spite of what the insurer may tell you. • The medical director will either recommend additional authorization or deny. • If denied, consider appeal options. • If appeals fail, consider litigation.

  15. Common Reasons for Denial 1. Medical Necessity • Parity Laws require that mental health coverage be provided commensurate with medical health coverage • Medical stability will occur long before psychological stability • State definitions trump an insurer’s definition of medical necessity; • look for loopholes; the following link provides comprehensive information regarding medical necessity, including state definitions:

  16. Common Reasons for Denial Continued… 2. Exhaustion of benefits • Know the policy • They may deny benefits included in the policy • Know the state’s involvement with mental health parity laws: • They may or may not participate in parity. 3. Rigidity in what the insurer thinks treatment should look like, e.g.,: • Telephonic family treatment • Partial with boarding (you can legally bill for a lower level of care than what is being delivered • Some try to selectively exclude eating disorder patients • Therapeutic exposure home passes

  17. More Insurance Tricks to Watch For: The Seven Deadly Fallacies • Conflict of Interest • The Rubber Ruler • Straw Man Argument • False Authority • Red Herring • Non Sequitur • Post Hoc Fallacy

  18. Conflict of InterestThe Two-Headed Snake Definition: They set things up so they can play both prosecution and judge. Example: 1. They write AND interpret the policy. 2. They allow an external appeal that is not truly independent. Response: 1. Confront capricious interpretations of the policy. 2. Make sure external appeals are independent.

  19. The Rubber Ruler (AKA, The Bad Standard) Definition: They use poor measures of recovery (Non-APA standards). Example: “She does not meet our standards for residential care so we are denying it.” Response: Point out when their standards are not inconsistent with best practice. (i.e., APA standards).

  20. Straw Man Argument Definition: They emphasize an irrelevant issue, ignoring more pertinent issues. Example: “She is now in her ideal weight range so she is ready for partial hospitalization” Response: Point out that they are ignoring the larger psychological, social and environmental factors

  21. False Authority(Listen for the Quack) Definition: They appeal to false authority. Example: “Dr. Jones, the clinical director, says the patient must be stepped down in care. So that’s that.” Response: Check credentials. Is Dr. Jones a true authority in eating disorders (by training, experience, credentials, etc.)? Does she have a bias given previous decisions on this case? If so, request someone with proper credentials.

  22. Red Herring (The Distraction Trick) Definition: An irrelevant issue is raised to “take you off the scent” of more important issues. Example: They “make a stink” over something clinically insignificant (e.g., authorization was not obtained in a timely fashion) to distract attention from their ethical and clinical obligations. Response: Bring the attention back to the ethical and clinical issues of patient care.

  23. Non-Sequitur (Circular Reasoning) Definition: Their Conclusions don’t follow from the premises. Example: They say “She is not improving much. Therefore she needs to step down to IOP.” Response: Try a reversal. Is not the opposite conclusion just as valid? (i.e., She needs more intensive residential treatment or possibly hospitalization.)

  24. HYPOCRISY (The Double Standard) Definition: They apply one standard to you and another to themselves. Example: Their medical director denied residential treatment because it involved telephonic family therapy. He said phone therapy cannot be as good as live therapy. Yet he based his denial completely on telephonically-obtained data! Response: Point out the inconsistency of their logic.

  25. Post Hoc Fallacy(After It, Therefore Because of It) Definition: The post hoc fallacy occurs when A is said to be the cause of B, because B follows A. Example: They claim that because relapse followed treatment, treatment was inadequate or the cause of relapse. Response: Correlation does not mean causation. Point out the other plausible causes of the event.

  26. Use APA-Consistent Documentation To justify level of care: Use the APA Practice Guidelines for Treating Eating Disorders in composing treatment notes. Address these issues: • Motivation to Recover (e.g., cooperativeness, insight, ability to manage obsessive thoughts). • Co-occurring Disorders (e.g., substance abuse, depression, anxiety) • Structure Needed to for Eating/Weight Gain (e.g., supervision at meals, snacks, etc.) • Ability to control compulsive exercising. • Ability to inhibit purging. • Environmental Stress (e.g., social/family support) • Geographic availability of treatment (in their home area).

  27. When to Challenge Denials You should challenge a denial when: • You believe that the denial is clinically inappropriate (see APA guidelines) • You have identified “structural conflicts” with the insurer (Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008)). • You detect logical fallacies in their reasoning. • They violate the policy or plan terms. • They violate the law.

  28. The obligation to communicate . . . “Under federal law, an ERISA plan “shall provide to every claimant who is denied a claim for benefits written notice setting forth in a manner calculated to be understood by the claimant: • (1) The specific reason or reasons for the denial; • (2) Specific reference to pertinent plan provisions on which the denial is based; • (3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and • (4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review.” 29 C.F.R. § 2560.503-1(f).

  29. The obligation to communicate… • In simple English, what this regulation calls for is a meaningful dialogue between ERISA plan administrators and their beneficiaries. If benefits are denied in whole or in part, the reason for the denial must be stated in reasonably clear language, with specific reference to the plan provisions that form the basis for the denial; if the plan administrators believe that more information is needed to make a reasoned decision, they must ask for it. There is nothing extraordinary about this; it's how civilized people communicate with each other regarding important matters.” Booton v. Lockheed Medical Benefit Plan, 110 F.3d 1461 (9th Cir. 1997).

  30. THE LAW OF ERISA APPEALS • There are two critical things to know about ERISA appeals • The insured is entitled to a copy of the claim file – sometimes called the administrative record – before the appeal is decided • The insurer or plan may be entitled to discretion in deciding the appeal

  31. WHAT IS THE CLAIM FILE AND HOW DO I GET IT? • The claim file consists of any document, record or other information that was relied upon in making the benefit decision, was submitted, considered or generated in the course of making the benefit decision, or is a statement of policy or guidance with respect to the plan concerning the denied treatment (29 C.F.R. Section 2560.503-1(m)(8)) • The insured is entitled, upon request and free of charge, a copy of the claim file (29 C.F.R. Section 2560.503-1(h)(2)(iii))

  32. PLAN DISCRETION: THE FOX GUARDING THE HEN HOUSE • Many plans/policies provide that the entity deciding whether to pay claims has the “discretionary authority” to construe and interpret the Plan and determine eligibility for benefits • This means that the court will give deference to the decision of the Plan or insurer – the decision DOES NOT HAVE TO BE RIGHT, IT ONLY HAS TO BE REASONABLE • BUT when the same entity is deciding whether to pay claims, and is paying approved claims, the Supreme Court says there is an “inherent” or “structural” conflict (Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343 (2008))

  33. The fox guarding the hen house (continued) • A "structural" conflict of interest introduces an element of skepticism into what would otherwise be deferential judicial review. • The degree of skepticism depends on the extent of the conflict. The types of evidence tending to show the influence of a conflict include: • inconsistent or insufficient reasons for the denial • determining a material fact without supporting evidence • failing to follow plan procedures • failing to provide a full and fair review of the denial • acting as an adversary bent on denying the claim • The more evidence of conflict, the less deference afforded to the administrator, and the more "skeptical" the review

  34. WRITING THE APPEAL LETTER • This letter is submitted in support of Jennifer’s appeal of the denial of continued treatment . We will explain the history of Jennifer’s disease and treatment. We trust that, after reading this letter, which carefully documents Jennifer’s need for continued inpatient treatment, you will approve Jennifer’s request to continue that treatment. • Summarize the prior letters and documents • Point out the inconsistencies • Point out the irregularities • Point out the omissions • Enclose any new documents: treatment records, letters of support, journals, videos, independent medical examinations • Conclude with specific requests

  35. Appeal Options • Denial letters provide the most accurate information for appeal options • Internal Appeals (most policies provide 2) • 1st level can be done expedited (telephonically) • 2nd level is much longer, requires submitting records • External Appeal • True external appeal reviewers should have NO connection to the insurer and are appointed by the State Insurance Commissioner • The determination of the external reviewer is binding • Litigation • Select attorneys who specialize in insurance litigation (e.g., Lisa Kantor)

  36. TO SUMMARIZE • Know what your policy says! • Be assertive and don’t give up! • Document everything! • Send everything to the insurance company in writing, return receipt requested! • This is a marathon, not a sprint!

  37. Working To Obtain Insurance for Care: Guidelines for Providers and Families Presented at NEDA by Stacey Brown and David Christian, Avalon Hills Lisa S. Kantor, Esq., Kantor & Kantor LLP October, 2011