A lot of the time, it is patients who pursue appeals and claims when managed care companies fail to pay for health care. Providers support patients and their families by providing general guidance materials on the managed care appeal process and by responding to appropriate requests for information. But these claims are often the family’s fight, not the provider’s.
This does not have to always be the case, though. Providers also have the ability to pursue legal claims against managed care companies.
One common foothold in court is provided by ERISA, a federal law that applies to most employer-sponsored health insurance. The law in this area is complex and evolving; a helpful overview of the current state of the law is found in Spine Surgery Associates v. INDECS Corp., 50 F.Supp.3d 647 (D.N.J. 2014). But the basic point is clear enough: if a provider’s assignment of benefits form is worded right (this is the form that virtually all patients sign when they receive treatment), then the provider has standing in federal court when a managed care company wrongfully refuses to pay for care. ERISA is in many ways a powerful litigation tool (it allows for class actions and attorneys’ fee awards in favor of the plaintiff), and every insurance policy covered by ERISA is required to comply with MHPAEA.
The prospect of a federal ERISA lawsuit (including a federal class action lawsuit) can be an important check on the behavior of managed care companies, even if the power to file such a claim is never actually used. Providers should make sure that their assignment of benefit forms are worded properly, and in a fashion that will support their ability to pursue an ERISA claim in court should the need arise.