Self-funded plans are sometimes harder to deal with than insurance companies.
“Janet K.” (Self-Funded Plan administered by I.E. Shaffer & Co.)
Janet K was admitted to the hospital for treatment of major depression. At the time of admission, she was a 45-year-old widow, whose husband had just died one month before, of cancer. She reported that since his death she felt she was "having a nervous breakdown". She was experiencing anxiety attacks, isolating behavior, suicidal ideation with a plan and a history of attempts. She also suffered Diabetes Mellitus; high blood pressure and severe osteoporosis. She reported vomiting; binging; restricting; as well as alcohol and drug abuse. She indicated that she had been diagnosed as diabetic a year and a half prior, but said she hid this from everyone, including her husband, because she feared others would start to watch what she ate.
Upon admission, she presented as suicidal, stating, "I don't want to be here anymore. I am totally fed up with my life." She had tried to commit suicide by overdosing on Phenobarbital. The admission assessment summary indicates that she expressed a loss of interest in all pleasure activities. She avoided leaving home and social events. She was isolated, withdrawn, and reported difficulties with activities of daily living. She was taking numerous medications, including sedatives and anti-depressants. She had also seen several therapists, without success.
Psychiatric symptoms noted for severe depression were as follows: anhedonia; insomnia; hypersomnia; psychomotor agitation; fatigue / loss of energy; inability to concentrate; indecisiveness; feelings of worthlessness; feelings of guilt; self-deprecation; despair; helplessness; sense of foreshortened future; restrictive range of affect; Isolation; anxiety; difficulties with ADL; and thoughts of death. She also reported a lack of control over her eating behavior and an obsession with body shape and weight.
She also related trauma symptoms, and recurrent, intrusive recollections of trauma, in that her mother hit her and verbally abused her as a child. She reported flashbacks and distress at exposure to events that symbolize or resemble aspects of abuse and trauma; a conscious effort to avoid thoughts and feelings about the abuse; efforts to avoid activities or situations that arouse recollection of the abuse; feeling detached from mental process; irritability; outbursts of anger; and hypervigilance.
She was hospitalized for a period of 28 days. Charges exceeded $44,000 for her treatment.
Janet K.’s health benefits were provided by a self-funded ERISA plan. Prior to her admission, the hospital was told by a plan that inpatient benefits for psychiatric treatment were payable at 80% of “usual, reasonable and customary” (URC) charges, subject to a 30-day annual maximum. However, this information appeared to be incorrect, as the Summary Plan Description (SPD) stated that such benefits were payable at 100% URC. The hospital was informed that pre-certification was required for impatient treatment, which the hospital obtained.
A claim for benefits was submitted to the plan for $44,130. The hospital then received a letter from I. E. Shaffer advising that the plan had retained “Hackensack EAP” to manage all treatment for mental and nervous treatment. The letter further stated that benefits would be payable for mental health at "100% of the Hackensack EAP negotiated rates. No benefits will be payable for the treatment of . . . mental health on either an inpatient or outpatient basis unless it is supervised by Hackensack EAP." The letter further stated: "The Trustees have authorized payment of $570 per day . . . Such payment allowance of $570 represents the normal Hackensack negotiated rate and is 'all-inclusive' covering all services including room, board, physician and nursing services. Your billings should be forwarded to this office for payment." The letter also alluded to a lack of medical necessity and a lack of certification, as grounds for non-payment of any amount; however, the letter did not specifically state that payment was being withheld for either of those reasons.
The hospital responded with a letter of its own, which stated that its daily rate was $1,550 per day, exclusive of physician fees and that was the amount it expected in payment. This precipitated a letter from plan’s attorney, which reiterated that covered benefits were “$570 per day”, that “Any fees for those services in excess of $570 per day . . . are not covered . . ." and "Any further correspondence with respect to this matter should be directed to the undersigned and not to I.E. Shaffer & Co."
The hospital then received an Explanation of Benefits (EOB) form from I.E. Shaffer & Co., which referenced the total charges of $44,130.00, then stated that "covered charges" were only $15,960.00 and that $28,170.00 of the hospital’s charges were “excluded” from coverage.
The hospital appealed, pointing out that the plain language of the plan clearly provided that for inpatient hospital services were to be paid at 100% of “reasonable and customary” charges and that there was no limits inpatient mental health benefits at a non-PPO provider to $570 per day. There was no response to the hospital’s appeal.
At that point, I was hired. I submitted a further administrative appeal to the Board of Trustees of the self-funded plan. After lengthy correspondence back and forth with the plan’s attorney, the matter was resolved satisfactorily.