Sometimes a letter and a few phone calls will do the trick.
Patricia L. (Toys-R-Us / Self-funded plan administered by Mediplan)
Patricia L. was admitted to a treatment facility with a diagnosis of bulimia with major depression. She was placed on a routine protocol program, including medication and psychotherapy and discharged 20 days later. A claim for benefits was timely submitted to Mediplan, which was ultimately denied, a year and a half later on the stated ground that, “pre-existing conditions are not covered under the plan”.
I reviewed the plan documents and found that a “pre-existing a condition” was defined as one for which the patient/insured received treatment during the 90 day period prior to the effective date of coverage. I found no evidence that Patricia was treated for bulimia or depression during that period.
Based on my review of the file, according to the facility’s phone log there were several contacts between the treatment facility and Mediplan, none of which shed any light on the claim denial. It appeared that there was no activity on the claim for approximately 6 months. Then there were phone contacts between the facility and a Mediplan case manager, who advised that 16 days treatment were approved and that a decision regarding the remaining 7 days would be made within a week. But then there was an entry dated 10 days later, indicating that a Mediplan representative advised that: “pre-existing condition is being reviewed”. Over the succeeding year, there were several phone contacts between the facility and Mediplan. Finally, a letter was received from Mediplan denying the claim on the ground that “pre-existing conditions are not covered under the plan”. No further explanation was given. So Mediplan took approximately 6 months to raise the issue and then it another year to resolve it.
ERISA requires that a plan provide written notice of a claim denial in a timely manner, specifically stating the reasons why it was denied. The notice must also identify the provisions of the plan on which the denial is based; describe any additional material or information necessary for the claimant to complete the claim; and provide information as to the steps to take to appeal the denial.
I sent a letter to Mediplan requesting a detailed clarification as to why the claim was denied on “pre-ex” grounds. I received no response so 30 days later, I sent another letter. I finally received a phone call from a Mediplan representative, advising me that all of the information on their system had been purged because claim was “so old”. After a series of phone calls over the next month the matter was resolved and the claim was paid in full.