Melissa T. (Aetna)
Melissa T. was admitted to the hospital with a diagnosis of Major Depression. One month before her admission, the hospital contacted Aetna, spoke to a person identified as Marsella G. and verified that plan benefits were payable at 80% "usual, reasonable & customary" (URC) charges, subject to a $400 deductible, up to a $2,000 out of pocket maximum, and then payable at 100% URC and a 45 day annual limit (lifetime max - $2,000,000). The type of coverage was verified to be a PPO. Daycare benefit, including “partial hospitalization” (PHP) were verified payable at the same rate.
Two days before admission, the hospital called Aetna again to re-verify benefits. A person identified as “Cy B.” informed the hospital that there had been some changes in the plan from the preceding month. The plan deductible had increased to $500; the out of pocket maximum had increased to $3,000; and daycare benefits (including PHP) were no longer covered. The hospital was informed that pre-authorization was required for inpatient care, and that such should be obtained by contacting “Focus Psyche. Review”, at 800-424-1601. The hospital was told that failure to do so would result in a penalty of $400". There were two Notification of Insurance Benefits forms by which the hospital communicated benefits as verified to the patient, at the time of admission.
A Notice Of Certification” rom Aetna / Magellan Behavioral Health to the hospital referenced a “Certification Decision” and a “Total Days Certified: 17”. However, Melissa T. was an inpatient for 25 days and she was treated for an additional 7 days at a PHP level of care.
A claim was submitted to Aetna for the full amount. It was initially denied in its entirety. The only reason that was stated on the two EOB forms was “Claim denied charges”. Interestingly, the second EOB acknowledged that the PHP charges were indeed covered under the Plan. But they were nevertheless denied without reason.
After I was retained in the matter, I sent a representation letter to Aetna, pointing out several things: (1) the processing of the claim was untimely under the federal ERISA regulations, and (2) the denials were insufficient under the regulations because they stated no specific reason for why the claims were denied, nor did they cite any specific plan provisions upon which the denials were based. My letter addressed the statutory, regulatory and common law requirements of ERISA, which Aetna’s denials failed to meet.
29 USC § 1133(1) requires adequate notice in writing of claim denial, setting forth the specific reasons for denial and written in a manner calculated to be understood by the participant. 29 CFR 2560.503-1(g)(1) provides that a notification of benefit determination “shall set forth, in a manner calculated to be understood by the claimant -- (i) The specific reason or reasons for the adverse determination; (ii) Reference to the specific plan provisions on which the determination is based . . . .”
Similarly, 29 CFR 2560.503-1(j)(1) provides that a notification of benefit determination on review shall set forth, in a manner calculated to be understood by the claimant-- (1) The specific reason or reasons for the adverse determination; (2) Reference to the specific plan provisions on which the benefit determination is based . . . .”). See: Booton v. Lockheed Medical Benefit Plan 110 F.3d 1461 (9th Cir., 1997) (“In simple English, what this (former) regulation calls for is a meaningful dialogue between ERISA plan administrators and their beneficiaries. If benefits are denied in whole or in part, the reason for the denial must be stated in reasonably clear language, with specific reference to the plan provisions that form the basis for the denial . . .” Id at 1465).
Magically, shortly after the date of my representation letter, two checks were received from Aetna in full payment of the claim.