Trust us, of course we’re going to pay you. But we’re not going to guarantee it.

Wayne S. (Blue Cross of California)

Wayne S. was admitted to a residential treatment facility for chemical dependency. At the time, he was covered under his wife’s health insurance plan. Prior to admission, the facility contacted Blue Cross of California (BCC) to verify the availability of inpatient benefits for treatment. A BCC representative verified that inpatient benefits would be payable at a specified daily rate, subject to a modest deductible and a calendar-year maximum. The availability of outpatient benefits was also verified. The facility was told that it must first obtain pre-certification for treatment by calling an 800 number. The facility called the number and spoke with a second BCC representative, “Doug”, who advised that pre-certification wasn’t necessary. The Executive Director of the facility then called BCC back to re-verify this information. She was told that the facility was an “approved facility” and thus no pre-cert. was needed. The Executive Director then faxed a letter to that same BCC representative, confirming the phone conversation and requesting that the BCC representative verify the information in writing. The letter said, “Please verify info. with a supervisor, sign and fax to me as soon as possible. An admission is pending.”

A copy of the letter was signed by a BCC representative and faxed back to the facility that same day, signed by “John B., Supervisor”. There was a handwritten notation on the document, which stated, “Verification of coverage and not a promise to pay.” However, the letter did verify the benefits payable and further verified that the facility “shows on the (BCC) system a recognized facility”. Therefore, the Executive Director faxed a second letter to “BCC Managed Care Services”, asking that BCC verify in writing that no pre-authorization was required. BCC refused to confirm it and advised in a letter that it was not “not BCC’s policy to confirm in writing information given over the phone”.

The Executive Director made yet another attempt with BCC’s Utilization Review Supervisor; however, there was no response for more than two and a half weeks. By this time, Wayne S. had been admitted and was undergoing treatment that would consist of 30 days inpatient and 10 days outpatient treatment. The BCC response stated that in fact “pre-authorization is required for inpatient stays.”

Since Wayne S. was half-way through his inpatient treatment at that time, it was a little late to get “pre-authorization”.

A claim for all services was submitted. BCC paid less than 10% of the outpatient charges and none of the inpatient charges. Approximately six months after submission of the claim, the remainder of charges was denied because BCC stated they “exceed the benefit limit”. Subsequently, Wayne S. and the facility received a letter from BCC, which stated, “We have received the claim indicated above for hospital services rendered in a facility which is not contracting with (BCC). Your Blue Cross Agreement does not provide benefits for hospital care in a non-contracting hospital in an area serviced by (BCC). As a result we regret that we will not be able to provide any benefits.” BCC afforded no opportunity for any kind of internal administrative review of the denial; thus, the applicable time limits and the internal review standards of ERISA were breached.

I submitted an administrative appeal on behalf of Wayne S. and the facility. The denial was overturned and the claim was paid.

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