By: Kevin Brady, Esq.
The first time I read a Plan Document at The Phia Group, I saw a word that I am ashamed to admit, I did not quite understand. A short word, an odd word, but an important one nonetheless. The term “Incurred” can be found over and over in most Plan Documents and stop-loss policies. Little did I know, this term would come up, over and over again as I continued to review these documents.
With some variation in the language, the typical definition of the term establishes that claims are incurred on the date with which a service, supply, or treatment is rendered to a participant. Although this seems to be the standard, some Plans and policies provide that a claim is not incurred until it is submitted to the Plan or sometimes a claim may not be considered incurred until the Plan has issued payment on the claim.
An important consideration for Plan Administrators is that the Plan’s definition of this term should not conflict with the stop loss policy. When the Plan and the policy have conflicting definitions, it may give rise to a number of reimbursement issues. For example, a conflicting definition could implicate issues with stop loss notice requirements; if the Plan is confused about when the clock starts for timely notice of a claim, the Plan may inadvertently fail to provide notice of an otherwise reimbursable claim. Further, confusion on the date with which a claim was incurred could cause a claim to fall completely outside of the policy period unbeknownst to the Plan Administrator.
Another common issue arises when the definition fails to describe how the Plan will treat ongoing courses of treatment. Will the claim be considered incurred on the date when the participant initially sought treatment? Or will each individual treatment or service be considered separately? The Plan should clearly outline these issues to avoid confusion when administering claims. Even if a Plan does describe the impact of ongoing treatment, it must also consult with the carrier to determine if their application is consistent with the carrier’s and make the necessary modifications to ensure there are no gaps between the two documents.
While it may seem very simple, failing to recognize this language gap could ultimately be the difference between reimbursement and denial on an otherwise reimbursable claim.
Plan Administrators should review the definitions in both the Plan and their policy to ensure that a gap such as this one does not preclude the Plan from reimbursement. Even better, send your Plan Document and stop-loss policy to PgcReferral@phiagroup.com and we will perform a detailed analysis of the gaps between the Plan and the Policy.
By: Jon Jablon, Esq.
You may have heard about our new Phia Certification program, through which The Phia Group requires all employees to be “certified” to the company’s satisfaction. Certification is obtained by watching, reading, and listening to a series of training materials and then taking a series of tests to confirm the employee’s understanding of our industry and all aspects of The Phia Group’s operations.
One particularly noteworthy question is:
Which of the following is the most accurate?
As you may have surmised, the answer is option B, which is essentially an “all of the above” type of answer. This is especially noteworthy because we find that folks in our industry often think of “gaps” as occurring only between the plan document and stop-loss policy, while in practice there are lots of other gaps that can cause lots of unforeseen problems for health plans.
A perfect example – and one that we deal with quite frequently – is when there is a gap between the plan document and a network contract. This can be one the most problematic of all gaps, since it can come out of nowhere. The issue arises like this:
A plan incurs an in-network claim, billed at $50,000. The SPD provides the plan the responsibility to audit all claims, and an audit reveals that the appropriate payable rate (the plan’s U&C rate) for this claim is $30,000. Meanwhile, the network contract provides a 10% discount off billed charges for this particular claim – resulting in the plan paying $30,000 based on the SPD, but owing $45,000 as the network rate. This is a very common scenario and not one that can be solved quite so easily; even if the plan says “oh right – the network contract! We’ll pay the network rate to avoid a fight with the network,” the dilemma may not be over, since stop-loss presumably has underwritten coverage based on the assumption that the plan’s U&C rate will be paid, resulting in stop-loss possibly denying the $15,000 paid in excess of the plan’s U&C rate. Even though there’s a network contract and the plan may have no choice but to pay it, there’s always the chance that the stop-loss policy will define its payment on other terms.
Moral of the story? Gaps in coverage can arise between the plan document and any other document – including network contracts, ASAs, stop-loss policies, employee handbooks, PBM agreements, vendor agreements, and more. Check your contracts, and make sure your SPD aligns with all of them! (Email PGCReferral@phiagroup.com to learn more.)
By: Jen McCormick, Esq.We frequently talk about the various types of gaps in coverage – gaps between the plan document and the stop loss policy, the network agreement and even the employer handbook. The mission for gap-less coverage should not stop there however. Recently, we have seen situations where employers have gaps in between their documented practices and their payroll practices. For example, an employer may allow continuation of coverage after a leave of absence for up to 3 months. The problem, however, is that the employer’s payroll system does not allow for manual adjustments and coverage must end after a specified (i.e. two week period). This creates an issue as an employee is paying for coverage but is not eligible for that coverage under any plan materials. As a result, employers should not only double check that their plan materials are in sync but that their plan practices (i.e. payroll and otherwise) are aligned with those materials.
By: Jen McCormick, Esq.
As many states (and cities) are starting to beginning to enact paid sick and/or leave time regulations, employers will need to understand the impact and implications. The regulations vary by state (and city), but require eligible employers to grant certain employees paid sick time. Various regulations are in effect already, and some are yet to become effect. Regardless of the effective date of these regulations, it’s clear that employers will need to make changes and consider how the regulations will impact their employer handbooks, plan documents (i.e. continuation of coverage) and stop loss. Now is the time to get the ball rolling in reviewing these materials so employers can be prepared.