Even among the most seasoned healthcare revenue cycle experts, ERISA appeals are often a new concept. By our estimates, as many as 98% of provider organizations do not realize they can expect a 1% increase in net patient service revenue by exercising the appeals rights granted to them by the federal ERISA law.
Because Argos Health is one of very few revenue cycle experts qualified to handle complex ERISA appeals, we’re often in conversations with health systems at the beginning of the ERISA learning curve. These are their frequently asked questions:
How does ERISA apply to healthcare?
ERISA, the Employee Retirement Income Security Act of 1974, sets minimum standards for most voluntarily established health plans in private industry. The intent is to provide protections for beneficiaries in employer-sponsored health plans. By extension, ERISA protects the healthcare providers who treat those beneficiaries.
ERISA dictates that reimbursement must follow the guidelines outlined in employee benefit plans. This holds true even if the employee benefit plan conflicts with rate agreements that health plans have established with their in-network providers.
Health plans are accustomed to rejecting claims or reducing reimbursements according to their own established rates and policies. However, if denials or underpayments conflict with coverages granted in an employer-sponsored benefits plan, the health plan is triggering an opportunity for discovery and investigation of the employers’ benefit plan per ERISA.
I thought ERISA protected 401k plans…
Yes, you may be more familiar with the portion of ERISA that covers retirement plans. ERISA provisions protect retirement savings from mismanagement and abuse, and they dictate that fund managers are obligated to act in the best interests of plan participants.
While the retirement fund side of ERISA is important, ERISA also protects a substantial number of American workers. According to the Department of Labor’s 2020 report to Congress, there were approximately 2.3 million ERISA-covered group health plans in 2017, representing about 135 million participants and beneficiaries.
I already have a revenue cycle team pursuing insurance appeals. Why do I need this?
ERISA appeals are entirely separate from the recovery work done by other PFS teams. Those teams are pursuing appeals through the traditional state-governed process, which relies on the contract between the provider and the payer. ERISA appeals are federal, which supersede the state appeals, and they are based on the coverages promised in an employer’s Summary Plan Description.
The Argos Health ERISA appeals process doesn’t start until other PFS teams have fully adjudicated the accounts and deemed the remaining receivables uncollectable. We manage only zero-balance accounts.
Are ERISA appeals new in healthcare?
No, ERISA appeals have been happening for many years, but they’ve more commonly been pursued by out-of-network providers fighting against down-coding.
What’s changed now on the in-network side is the prevalence of third-party benefit plan administrators. Back when most employers were fully insured, health plans wrote the plan documents for the benefits they were administering. This meant that the plan documents and coverage approvals were generally closely aligned. TPAs have now added an administrative layer, and with it, great risk that the coverages promised in the plan documents will not be administered correctly.
This sounds very complicated. Is it worth the effort?
ERISA is extremely complicated—the law itself spans tens of thousands of pages, and ERISA work is highly specialized. However, it’s most definitely worth the effort. Upon reviewing past denied claims, health systems may identify millions in AR for services that were expressly covered under employers’ benefit plans and, therefore, should have been approved.
I’m an experienced healthcare revenue cycle manager. Why haven’t I heard about this?
You weren’t trained to consider ERISA. Revenue cycle education and training are built around collecting from two payers: health plans and patients. Because insurance disputes are understood to be worked through the health plans, revenue cycle managers currently have no exposure to the concept of looking for collection or appeals opportunities in any other place.
Won’t this upset our payers and employers? We can’t afford to damage these important relationships.
We respect the relationships our clients have established with health plans as in-network providers, and we work together to determine the most appropriate claims to pursue. Rather than being adversarial, we generally find that we’re all on the same team trying to administer benefits correctly and deliver the best care for patients/members/employees.
Do you have additional questions? Please feel free to reach out to us directly. Or, download our white paper, “Revenue Recovery with ERISA Appeals: Exploring the Untapped Potential in Denials and Underpayments.”
Argos Health is a KLAS top performer and offers the broadest range of complex claims services of any vendor in the category. Learn more about our ERISA Appeals services by going here.