Rick R. (Plan administered and insured by Massachusetts Mutual Life Insurance Co.)
Rick R. was admitted to a residential treatment center, where he underwent 30 days inpatient care for treatment of alcohol dependence. Prior to admission the facility called Mass. Mutual and verified that inpatient benefits would be payable at 80% “usual, reasonable & customary” (URC) charges, subject to a deductible and a 30 day calendar year maximum. The next day, it called to obtain pre-certification to admit Rick to the facility. A pre-certification number was given to the facility. While treatment was in progress, the facility contacted Mass. Mutual to determine if any utilization or continued stay reviews were required for ongoing treatment. It was told that the insurer only conducted such reviews for acute-care treatment and that inpatient rehabilitative was not a “managed benefit”. Therefore, no further utilization review was done by any plan representative.
Following Rick’s discharge, charges for the 30 days treatment were submitted to Mass. Mutual. The facility thereafter received a minimal payment, accompanied by a letter, which simply said, “maximum benefit for this type of service has been met”. No further explanation of any kind was given for the denial of the remainder of the claim.
There were several phone conversations with various plan representatives after that, where the facility was given conflicting information. First it was told that the minimal payment was the calendar year maximum for outpatient treatment. When the insurer was advised that Rick was treated on an inpatient basis, not outpatient, it first said that it nevertheless refused to reprocess the claim; then it changed course and advised that it would “correct ASAP”. But then, in a separate conversation the insurer said that it would only make yet another minimal payment, leaving the overwhelming balance of the charges unpaid. Next the facility was advised that the plan only covered inpatient detoxification and not rehab.
The facility then received a small payment on the claim, accompanied by an Explanation of Benefits (EOB) form that said, “Please note: This is the final payment”. “This is an adjustment to a previously processed claim. The maximum benefit for this type of service has been met.”
The matter was referred to me. Based on a review of the file, it appeared that Mass Mutual switched claims administrators, while the claim was in process. All benefits beyond the two minimal payments were denied on grounds that benefits had been “maxed out”, with no explanation as to why this was true. I obtained a copy of the Summary Plan Description (SPD), which clearly showed coverage for the entire duration of treatment at 80% URC, just as had been initially verified. Although there was a 7 day limit applicable to detoxification, nothing excluded benefits for inpatient rehabilitative treatment of chemical dependency.
I sent an administrative appeal letter to Mass. Mutual, which summarized the facts and plan provisions, and requested that the insurer either pay the full amount of the claim or formally deny it, stating in writing its reasons for denial.
It was later ascertained that there was a separate contract between one of the claims administrators and the treatment facility, which did provide that a discount was applicable to the total charges. That confusion was eventually cleared up and Mass. Mutual paid the full amount of the adjusted claim in full.