To paraphrase Humpty Dumpty, “Words mean whatever I want them to mean.”

Dan S. (Travelers Insurance Co.)

Dan S. had a 14 year long history of alcohol dependence. His drinking escalated to heavy use in the 5 years before he sought treatment. He and his wife had separated as a result of his drinking.” Dan S. was admitted to a alcohol treatment facility for 6 days inpatient, followed by 30 days of day treatment and then two weeks outpatient care.

Prior to admission, the facility contacted Travelers and verified that inpatient chemical dependency coverage was payable at 50% of “usual, reasonable & customary” charges (URC), subject to a deductible, a 30-day calendar year maximum and a $25,000 lifetime maximum. Outpatient coverage was verified at 70% URC, subject to a calendar year maximum. The facility was told that precertification was required for impatient care and that such should be obtained by calling the “Patient Advocate”. Later that day the facility contacted the “Patient Advocate” at a different telephone number and obtained pre-certification for inpatient treatment. Inpatient treatment was provided in reliance upon that precertification.

Travelers paid the outpatient and day treatment, but denied all inpatient charges. Precertification for those inpatient days had been given, but when the claim was submitted it was taken away. After the conclusion of the impatient stay, the facility received a “precertification letter” from the “patient advocate”, which stated:

“This letter confirms that a Patient Advocate has been notified of a proposed treatment plan and has discussed the matter with a staff member of the treating physician’s office. Patient Advocate reviews the proposed treatment plan for medical appropriateness. For a determination of benefits and coverages, please call the claim office number on your health insurance ID card. This letter alone does not confirm benefits and coverage.”

“The information obtained concerning the treatment plan indicates that a confinement of 7 overnights including no preoperative days is initially recommended. As Patient Advocate, I will contact the treating physician a regularly scheduled intervals to review whether the proposed length of stay is appropriate or should be modified.”

In other words, what The Travelers was doing was tantamount to “pre-certification” and “concurrent review” with a new twist. That new twist is to allow it to not certify anything. The letter stayed well clear of using any typical certification language. This was not the first time that I encountered this tactic by The Travelers. Oasis Treatment Center, Inc. vs. The Travelers Insurance Co. (Related Cases) Case Nos: SACV 97-799 AHS and SACV 97-800 AHS (9th Cir. Case Nos: 99-55225 and 99-55226) was a case that I had handled previously, involving two health insurance claims by two separate patients. In both case, Travelers had sent letters to the claimants stating that certain treatments would not be covered despite the prior authorizations. One the letters said point blank, “Based on information obtained, the proposed hospitalization is appropriate. . . . A review of the medical information may be conducted after submission of the claim. If this review indicates that hospitalization is not medically appropriate, payment for expenses may not occur.”

This was of course absurd. The Merriam-Webster Dictionary defines the word “certify” as follows: “1. to attest authoritatively . . . 2. to inform with certainty: assure. 3. to guarantee . . .. 4. to recognize as having met special qualifications . . .” It appeared to me that Travelers was using the “Patient Advocate” program as nothing more than an elaborate ruse, so that Travelers could conduct a managed care program without doing any case-management or true pre-certification, without obligating itself on any claim, even as to the issue of medical necessity. The whole purpose for the pre-certification process is to lay the issue of “medical necessity” to rest.

About halfway through Dan’s day treatment, the facility received a letter from Travelers, which said, “We are in receipt of a claim for a confinement of. . . Additional information will be required prior to assessing medical necessity of the care provided and correct benefit determination.” The letter requested that all medical records be submitted to Travelers and stated, “This information is required before consideration can be given to this claim . . .”

Approximately a month later, after a review of the medical records, Travelers sent the facility another letter, which stated, “This letter is to advise you that the clinical review of the confinement referenced above has been completed. The information reflected in the records . . . does not support the need for hospital confinement. Accordingly, any expenses associated with treatment during this confinement are not covered under the patient’s health care plan.”

The facility received a partial payment of its bill, with an Explanation of Benefits form, which denied the remaining inpatient charges for the stated reason, “(F4) A review of the medical records has determined that the documentation does not support this confinement. The plan does not cover expenses associated with treatment for days of the confinement determined inappropriate.”

Contrary to the requirements of the ERISA regulations, no indication was given as to what plan provision was being relied upon. There was no statement of specific reasons for the denial. There was no rationale set forth for why the treatment was determined inappropriate. Nor was there any indication as to what documentation would support the confinement and no description of the standards or criteria employed in making the adverse claim determination.

The facility administratively appealed the denial and was informed over the telephone that the denial had been overturned on appeal and that the claim would indeed be paid as agreed. However, no check ever followed and no written confirmation of the appeal decision was ever received. Apparently, a new insurer took over the plan and there was mysteriously “no record” of the claim in the “system”. The facility was told to send a letter to the new carrier advising of the claim and the status and that the new carrier would then pay the claim. However, that didn’t happen. Instead, the facility was told that Dan S’s coverage had “expired” by the time the denial was overturned on appeal; therefore no further benefits would be payable.

It took me about a dozen telephone calls to various departments at the new carrier, but eventually it agreed to pay the remainder of the claim.

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