UCR denials are often mired in mystery.
What does usual, reasonable and customary mean? How are the reimbursement rates calculated? Are payers using governmental entitlement program benefits as a basis for calculating UCR? What proof has the payer collected that actually demonstrates that the denied claim has been billed at a rate above the norm?
These are some of the most basic questions that not only deserve an answer, but may require an answer under an aggressive disclosure-seeking appeal.
State and federal disclosure laws require insurance carriers to unambiguously outline the coverage terms so that policy holders are aware of the benefits available for medical care. Many states have passed specific legislation directing insurance carriers and plan administrators to release information regarding how benefits are calculated or, in this case, reduced. Further, ERISA, which governs most group health benefit plans, has the most widely applicable disclosure requirements and stipulates that answers to questions like the ones listed above are to be provided upon request. In fact, the Department of Labor issued an advisory opinion specifically instructing a group health benefits plan to release the schedule of usual and customary fees even if that schedule is drawn from a proprietary database.
According to Advisory Opinion 96-14A, the legislative history of ERISA suggests that plan participants and beneficiaries should have access to documents that directly affect their benefit entitlements under an employee benefit plan, including “studies, schedules or similar documents that contain information and data, such as information and data relating to standard charges for specific medical or surgical procedures, that, in turn, serve as the basis for determining or calculating a participant’s or beneficiary’s benefit entitlements under an employee benefit plan.”
Despite clear mandates which encourage transparency in the rate calculation process, insurance carriers still routinely refuse to give such information to providers. Providers who file appeals for such information are routinely reassured that “benefits were calculated according to the UCR fee schedule” but are not provided with details regarding the data used to make the calculation or provided with the Usual, Customary and Reasonable applicable policy definition as it appears in the policy or plan booklet.
How can providers make a stronger case that they have the right to review such information? Providers must provide payers with documentation which indicates that the provider is a beneficiary under the policy or plan. Not all providers are able to successfully argue this point.
The assignment of benefits, a form routinely obtained by providers but rarely actually utilized, is the principal form which determines if you have the right to act as the beneficiary in making disclosure requests. Some assignment of benefits forms simply state that the provider of medical care is authorized to accept the insurance or plan benefits. Such authorization forms may not qualify you to act on behalf of the beneficiary in seeking denial disclosure. However, a well worded assignment of benefits can legally transfer all rights under a policy or plan to the provider, including the right to pursue appeals and, accordingly receive complete denial documentation regarding denials. This transfer of policy benefits from the patient to provider allows the provider to act as the beneficiary through the appeal process and even may allow the provider to pursue litigation and related penalties if such information is refused.
Carriers tend to routinely consider providers a third party creditor under the policy rather than beneficiary. This can only be corrected by providing payers with a copy of the assignment of benefits and pointing out that under the AOB, all rights under the policy, including appeal rights, disclosure access and litigation, have been transferred to the provider.
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