Explanation of Benefits (EOB)
State and Federal Law Requires EOB's to Provide Specific Information.
Denied claims are one of the major problems facing today’s health care professionals. Getting a claim paid, and paid in
a timely manner, can be a complicated process. The importance of managing claim denials is paramount in addressing cash
flow, compliance and licensing and regulatory requirement issues. Implementing an effective denial management program
can improve financial performance more efficiently than generating additional revenue or controlling costs. By viewing
a denial program as enhancing revenue, providers can significantly improve their financial performance, cash flow and
profitability.
AppealLettersOnline.com can assist providers implement an effective denial management program.
AppealLettersOnline.com is an interactive resource provided to level the playing field between Insurance Companies and Medical Providers. You
will find appeal letters, case studies, articles, other resources and the latest intelligence necessary to help healthcare providers make
vital decisions and take strategic actions to address payer denial issues.
AppealLettersOnline.com will help health care
providers actively develop the processes, analytical tracking information, educational programs and procedures needed for
implementing an effective denial management program.
Some of the topics covered at AppealLettersOnline.com include addressing payment reductions such as usual and
customary and out-of-network care reductions, lack of timely filing denials, pre-existing conditions and medical necessity
appeals and improving verification of benefits procedures. Treatment exclusions, maximum benefits denials and
subrogation/coordination denials are also discussed. Tips are also provided on appealing for interest and penalty payment on
late payments and appealing a request for a refund of previously paid claims.
AppealLettersOnline.com discusses all types
of claims including Managed Care, Indemnity, Government, Self-Funded, ERISA
claim issues and managed care contractual payment discrepancies.
The Problem: Insurers call it an Explanation of Benefits. But many EOB’s read little more than "Claim
denied" and leave the explanation to your own guesswork.
The Solution: A poorly written
explanation of benefits may be more than just a nuisance; it may also be a
violation of federal and state law. Providers can, and should, attempt to
obtain a full explanation for any claim denial.
Both Texas state
statutes and ERISA regulations require insurers to include specific
information in any denial notice. Insurers bound by state law must state
the reason for rejection, according to Vernon’s Annotated Texas Statutes,
Title 28, Article 21:55. Further, self-funded plans bound by ERISA must
include in any denial notice the reason for denial and include a specific
reference to pertinent plan provisions on which the denial is based.
“This can be a direct
qoute or a reference to specific portions of the plan,” said Kim Guynan,
pensions benefits advisor for the Department of Labor.
“If it is not there,
you can certainly request it. The regulations provide the rights to the
participant, but the provider can request it. If they do not get a
response, then the participant should request it.”
Guynan states that
providers are encouraged to request the specifics on health claim denials
because many times, claims are denied due to needed medical information.
Providers may be able to provide the needed information, such as an
operative report or diagnosis code, more quickly than the participant.
Both state and ERISA
law also require insurers to indicate if additional material or
information is necessary for a review of claim. However, carriers and plan
administrators have a wide berth of discretion when assessing whether
additional information is needed to reject a claim. Carrier Liability
In Booten v. Lockheed
Medical Benefit Plan, a patient sought payment for oral surgery undertaken
after four of her teeth were almost knocked out. The treatment plan
centered on resetting the teeth by splinting the loose teeth to her back
teeth. Aetna paid a portion of the claim but denied any expenses related
to the back teeth because they were not injured. Aetna determined that any
work to the back teeth was strictly dental and no medical records were
requested to determine the relationship of the back teeth to the injury
and subsequent treatment.
The patient’s doctor’s
submitted medical information explaining the procedure. However, Aetna
responded with a serious of letters which stated simply, “These services
are not covered under your Lockheed Medical Benefits Plan.”
After ruling in the
patient’s favor, the court noted that Aetna could have easily obtained the
medical rationale from providers that these services were the result of an
accident. But instead of requesting these records, Aetna issued what the
court regarded as “a stream of cookie-cutter denial letters.”
“What we got here,”
the court records state, “is a failure to communicate. This is an
all-too-common occurrence when ERISA-covered health benefit plans deny
claims. While a health plan administrator may - indeed must - deny
benefits that are not covered by the plan, it must couch its rulings in
terms that are responsive and intelligible to the ordinary reader. If the
plan is unable to make a rational decision on the basis of the materials
submitted by the claimant, it must explain what else it needs.”
Seek Patient Involvement
Guynan said that ERISA
specifically mandates carriers must indicate if any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary. However,
once again, the law is written so that the participant has a right to this
informaton.
If a provider is
having difficulty getting information from the carrier, Guynan said that a
conference call may be helpful in resolving the issues. That way all
potential parties are there to contribute information. Finally, to comply
with state and ERISA regulations, denials must contain information on
appealing the decision. If any of the required information is not in the
EOB, providers should seek it and ask for the response in writing.
AppealLettersOnline.com can assist providers implement an effective denial management program.
AppealLettersOnline.com is an interactive resource provided to level the playing field between Insurance Companies and Medical Providers. You
will find appeal letters, case studies, articles, other resources and the latest intelligence necessary to help healthcare providers make
vital decisions and take strategic actions to address payer denial issues.
AppealLettersOnline.com will help health care
providers actively develop the processes, analytical tracking information, educational programs and procedures needed for
implementing an effective denial management program.
Some of the topics covered at AppealLettersOnline.com include addressing payment reductions such as usual and
customary and out-of-network care reductions, lack of timely filing denials, pre-existing conditions and medical necessity
appeals and improving verification of benefits procedures. Treatment exclusions, maximum benefits denials and
subrogation/coordination denials are also discussed. Tips are also provided on appealing for interest and penalty payment on
late payments and appealing a request for a refund of previously paid claims.
AppealLettersOnline.com discusses all types
of claims including Managed Care, Indemnity, Government, Self-Funded, ERISA
claim issues and managed care contractual payment discrepancies.
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