What is recoupment?
Recoupment is the identification of insurance claims that were either denied or underpaid to the provider and overpaid and not reimbursed to the self funded employer. We help identify these claims and assist in the process of getting adjusted compensation back to the proper stakeholder.
Patient - The patient benefits because they have access to services that might otherwise be denied because their provider of chaoice may be out of network for example.
Provider - The provider is properly compensated for the services rendered regardless of network status which allows them to treat patients they might not otherwise treat.
Self funded employer - The Employer is sure to get reimbursed for claims volume they may be over paying the TPA/Insurance Plan for the claims they have adjudicated.
What rules apply to employer-sponsored benefits under ERISA?
ERISA rules cover administration of the plan, some protections for enrollees and a few coverage requirements. In addition to COBRA and the HIPAA protections that apply to group health plans ERISA rules include:
Unlike state benefit mandates, which can provide broad protections to consumers, ERISA sets few requirements for employer-sponsored health plans and only where the plan already covers the benefit. For example ERISA-governed health plans that pay for mastectomies must also pay for reconstructive breast surgery.
How does ERISA interact with state law?
In general, ERISA preempts (or trumps) state laws that regulate employer-sponsored health plans. If the ERISA-governed plan is fully insured, states laws may regulate the health plan the employer buys from an insurer, but states cannot directly regulate employers in the health benefits they offer. For example, ERISA restricts state laws' ability to mandate that employers offer health benefits and states cannot regulate self-funded employer-sponsored health plans.
However, ERISA does apply broad consumer protections to most group health plans.
How does the Affordable Care Act (ACA) affect ERISA?
The ACA amends ERISA by applying new protections to large group health plans and their insurers. These requirements include:
In addition, ERISA-governed self-insured plans must implement an external review process, consistent with the Department of Health and Human Services regulation; however, this new requirement does not apply to grandfathered plans.
The ACA does not affect ERISA's preemption provisions. In particular, ERISA plan enrollees are still limited to ERISA's remedies for lawsuits, which are generally less consumer-friendly than state rules, and states still do not have jurisdiction to regulate ERISA plans.
And this item:….
So you have an unwinnable lawsuit alleging wrongful denial of ERISA benefits. How do you stop the bleeding?
Paying the claim during the lawsuit may moot the claims and end it right there, even if plaintiff continues to seek attorney fees.
Here’s the decision of Templin v. Independence Blue Cross, (E. D. Pa. May 13, 2011) (no determination has been made as to publication). It shows what can happen when the ERISA plan decides to pay a claim during a pending lawsuit alleging wrongful denial of benefits.
Does payment of the claim render the lawsuit moot? Yes.
Does plaintiffs’ claim for attorney fees trump the mootness principle? Maybe not.
FACTS: Both plaintiffs were hemophiliacs covered under an ERISA health plan and they sought prescription benefits–payments for a blood medication. After defendants denied the benefit, plaintiffs sued and the Court ordered defendants to conduct an expedited administrative review. Following expedited review, defendants approved the claims. Defendants then moved to dismiss, contending the claims pending before the court were moot. Plaintiffs argued, however that mootness did not apply because plaintiffs’ attorney fees and costs had not been paid.
TRIAL COURT HELD: Defendants approved the claim during the pending lawsuit and therefore the claims are moot, even though plaintiffs’ continue to seek attorneys fees in the lawsuit.