The average hospital claim denial rate increased 23% in 2020, but those funds may not be lost. Two little-known COVID relief measures opened a new route that may allow providers a second chance at recovering 2020 revenue.
It’s not through the traditional state-governed appeals process. In May, the federal government issued two COVID relief notices that provide filing protections and deadline extensions for health plans subject to ERISA. The IRS and the U.S. Department of Labor issued a Joint Notice, which covers COBRA eligibility and other timely filing issues. The EBSA Disaster Relief Notice 2020-01 (amended later as EBSA Disaster Relief Notice 2021-01) issued by the Employee Benefits Security Administration extends deadlines related to the management of plans.
Retroactive to March 2020, the two notices stopped the clock on timely filing deadlines, exceeded appeals deadlines, and many other coverage denials until either one year from the date the beneficiary was first available for relief, or 60 days after the as-yet-to-be-declared official end of the pandemic – whichever is earlier. As a result, providers may be able to use the ERISA appeals process to recover claims that were denied under the traditional claims process.
This offers something healthcare revenue cycle managers likely have never seen before: an opportunity to overturn rigidly enforced deadline-based denials.
What are ERISA appeals?
The Employee Retirement Income Security Act of 1974, known as ERISA, set a federally mandated minimum standard for health plans in private industry, which protects the rights of beneficiaries in employer-sponsored programs. ERISA dictates that reimbursement must follow the guidelines outlined in employee benefit plans—even if the employee benefit plan conflicts with rate agreements that health plans have established with their in-network providers.
In other words, health plans are accustomed to rejecting claims or reducing reimbursements according to their own established rates and policies. However, most commercial and managed care health plans are actually subject to ERISA. If denials or underpayments conflict with coverages granted in an employer-sponsored benefits plan, the health plan is unknowingly triggering an opportunity for discovery and investigation of the employers’ benefit plan per ERISA.
The New Opportunity
The Joint Notice and the Disaster Relief Notice add another layer of protection on top of all that. From March 1, 2020, until 60 days after the official end of the pandemic, ERISA prohibits health plans from issuing several types of time-related denials in claims for employer-sponsored plan beneficiaries.
At this time, most health plans are still continuing to evaluate claims under their state-governed policies. The ERISA law is federal, of course, and as such these new COVID relief notices supersede the state-governed policies.
Deadline Extensions: Use Cases
The Joint Notice and Disaster Relief Notice were implemented in response to the havoc wreaked on employees and their families by the COVID-19 pandemic. An FAQ published by the U.S. Department of Labor demonstrates the depth of uncertainty created both by workplace closures and by the learning curve associated with managing a completely novel health threat. The following questions represent just a sample:
- If my place of employment temporarily closes because of the COVID-19 outbreak, am I still covered by my employer’s group health plan?
- My employer’s place of business is temporarily closed because of the COVID-19 outbreak. I cannot contact my plan administrator or the claims administrator. Who do I contact to file a claim for benefits or to obtain replacement documents?
- I’m enrolled in my spouse’s employer plan and my spouse died of COVID-19. My spouse’s employer has agreed to pay my health coverage premiums for a specified period of time. What effect will that have on my future eligibility for continuation of health coverage under COBRA?
In response, the two relief notices offer protective deadline extensions for the following circumstances:
- Enrollment Deadlines: Extends the dates during which participants and beneficiaries can enroll in group health plans.
- Timely Filing Deadlines: Extends the dates within which participants, beneficiaries, or providers are required to file benefit claims under plan claim procedures.
- COBRA Continuation of Coverage Deadlines: Extends the coverage deadlines for COBRA continuation.
- COBRA Premium Payment Deadlines: Extends the period in which participants can make premium payments.
- Appeal Deadlines: Extends the dates during which claimants may file an appeal for adverse benefit determinations under plan procedures.
- ERISA External Review Appeal Deadlines: Extends the dates that limit the time claimants have to file information to perfect a request for external review following an incomplete initial request.
Revenue Recovery under ERISA
The protections extended to health plan beneficiaries under the two federal ERISA relief notices belong to healthcare providers, too, as they have carried the financial burden of healthcare delivery under COVID.
An experienced ERISA recovery team is already equipped with the tools required to recover this revenue. Don’t miss what may be a once-in-a-lifetime opportunity to reverse deadline-based claim denials.
Learn More: We explain the untapped revenue recovery potential of the ERISA appeals process in our latest white paper.
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 or filling out our contact form.