ERISA: What Insurance Companies Don't Want You to Know

If you do not know what ERISA stands for, then you are probably not aware that it is directly related to your ability to get paid for services you provide in a timely manner. You may also be unaware that, thanks to these five little letters, some of the major insurance carriers are in the fight of their lives ... and they're losing.

ERISA stands for the Employee Retirement Income Security Act. The regulation was enacted on Sept. 2, 1974 and signed into law by then-President Gerald Ford. It established the minimum standards for pension plans in the private industry and provides for all-encompassing rules on the federal income tax effects of transactions associated with employee benefit plans. Basically, it assists in the proper funding and oversight of public pension plans.

ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan. It does this by establishing standards of conduct for plan fiduciaries (overseer), and by providing for appropriate compensation and access to the federal courts. ERISA bypasses state court.

Are you asleep yet? Well, my friends, here is where it gets interesting. Because of its placement in the private sector, ERISA also regulates company-sponsored health insurance plans and the benefits contained therein.

The Chiropractic Angle

Now, you may still be asking, "What has all this got to do with me or even with chiropractic?" Well, ERISA directly controls what is covered by an individual's insurance plan. It is the final word. The final word is contained in the individual's Summary Plan Document. The SPD is the key to utilizing ERISA for your benefit and protection.

Consider the following example: You have a patient who has insurance XYZ. You call to verify benefits. The polite person on the other end of the line tells you that the individual has 20 allowed chiropractic visits per calendar year. They do not cover PT when performed by a chiropractor and they will pay a maximum of $40/visit. Does any of this sound familiar? Either you or your biller accepts this information and writes or copies it into the patient file. This then becomes "gospel" for the patient's file.

When the 20 visits are up, you sit and talk with the patient about the continuing need for care, and how their insurance won't cover any more visits and that they will now need to assume financial responsibility for their care. The patient then either chooses to continue or withdraws from treatment.

If you're still with me, hold on, because here is where ERISA, if you understand how it works, can flex its muscle to get all your patient's medically necessary care paid for. Let's start the process over again so we can clarify the differences.

Discovery

Your biller, before calling the insurance company to check for benefits, either collects themselves, or asks the patient to collect, a copy of their SPD from their human-resources manager at work.

They bring the large document to you. You take it home or better yet, train your biller how to read this document. You scroll down to the coverage determination and discover that in the SPD, there are no visit limits in the benefit plan.

Visits are shown to be based on medical necessity only. Also of interest, nowhere in the whole of the document does it specify who can perform physical therapy unless otherwise limited by their state license. So, what began as an average case now takes on a whole new meaning.

Now, your medically necessary treatment plan, including physical therapy and modalities, is a covered service. The most important part of all this is that there are no smoke and mirrors. The summary plan document is simply what your patient's employer purchased for their employee. In our current economy, people demand to receive the goods and services for which they have paid. This law (ERISA) and the document it requires does this for your patients.

Too Good to Be True?

Does this sound too good to be true? This is the type of knowledge chiropractors need to know, understand and utilize. This document protects us even further. How many of you are familiar with the dreaded "post-payment audit"? The cold chill that creeps up your back when the fax comes over requesting files for a routine file review? You diligently prepare and send the files, only to find out that a portion of your care wasn't medically necessary.

Don't worry though; you don't have to come up with the 300K today. They (the insurance company) will advise you to continue to see its members and it will simply deduct from your reimbursements until the overpayment is recouped.