Q: Very simply stated, what is ELAP?
A:
ELAP is an
Outsourced Claim Fiduciary. We make benefit determinations at the final
level of appeal, and we accept legal responsibility for each decision we
issue.
Q: Why would I be interested in an Outsourced Fiduciary to handle my
appeals?
A:
Under ERISA, the
self-funded Employer (or a Plan Administrator / Trustee) is responsible
for benefit decisions and ultimately responsible for handling any
dispute brought by a plan participant. Frequently, employers are in the
position of making difficult coverage decisions with serious legal and
medical implications.
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Q: What does ERISA demand of a Fiduciary?
A: Some
language frequently used by the Courts to describe the proper fiduciary
conduct: REASONABLE, INDEPENDENT, PRUDENT, UNBIASED, INFORMED, FAIR –
and acting with an UNDIVIDED LOYALTY TO BENEFICIARIES.
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Q: What does the Dept. of Labor require of the
decision-making process?
A: The
DOL’s latest Claim Regulation requires the following:
-
Time frames
in which plans must make decisions are compressed and very strict.
-
Hierarchy
– person who handled an E-O-B cannot handle the appeal(s),
nor can that person’s subordinate.
-
Decisions based
wholly or in part on a medical judgment require consultation with an
appropriate medical professional.
-
Failure by employer
to comply allows an employee to bypass the appeal process and go
directly to court.
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Q: Does ERISA allow for the transfer of Fiduciary Duty?
A: Yes, but
the allocation (or transfer) of the duty must be clearly stipulated in
the Plan Document.
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Q: Exactly how does the Transfer of Fiduciary Duty work?
A: Via the
following process:
-
The Plan must
establish either 1-appeal or 2-appeals – per DOL Regulations.
-
The EOB denial (and
the 1st appeal if you have two) are handled by
the TPA, per The Plan and DOL.
-
If a participant
makes a final appeal, the Plan and TPA refer it to
ELAP, Inc. These are “Referred Appeals,” which are defined in ELAP’s
contract.
-
You amend your Plan
Document to name ELAP as a co-Fiduciary (or “Designated Decision
Maker”), and you sign a contract to accept this service – the “DDM
Service Agreement.”
-
ELAP issues an
independent decision, acting in its appointed Fiduciary capacity.
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Q:
What are the advantages to OUTSOURCING the claim fiduciary
role?
A: ELAP decisions are professional and free of conflict of
interest. The nature of the appeal determines the type of reviewer:
·
For
medical appeals, ELAP uses a nationally recognized and URAC certified
Independent Review Organization. Our IRO panel consists of over 500
specialist physicians. ELAP will use a panel physician Board Certified
in the particular specialty.
·
For legal
appeals, ELAP utilizes law firms with expertise in employee benefit law.
·
For
billing and payment disputes, ELAP retains experts with extensive
backgrounds in health care finance, typically at the hospital level.
·
ELAP’s
benefit determinations will be reasonable, professional and unbiased.
Our objective is to provide a full and fair review process that complies
with ERISA and is defensible in a court of law.
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Q:
What happens if a plan participant is not satisfied with the
ELAP decision?
A: Once the appeal process is exhausted, the recourse for a plan
participant is to file suit in federal court:
-
If you have purchased ELAP, we will be the primary defendant, as we are
the Fiduciary that made the final decision, and our Duty to do so is
spelled out in the Plan Document.
-
ELAP pays for our legal defense.
-
ELAP also pays the Plan defense costs if you are named in the suit, as
long as you allow us to choose the attorney(s). The Plan is an
Additional Insured under the ELAP Professional Liability coverage.
-
ELAP also pays for resulting damages (as defined in the “DDM Service
Agreement”), including any restitutionary damages awarded to the plan
participant. Our limit is $1,000,000 per legal action.
-
ELAP does not pay the amount of the benefit if the benefit is awarded to
the participant.
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|
Hospital Name |
Angioplasty
/ Stent |
| Chester County |
$39,921 |
| Paoli
Hospital |
$87,785 |
|
Phoenixville Hospital |
$89,192 |
|
Brandywine Hospital |
$137,402 |
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-
Plan adopts ELAP’s
recommended language establishing Applicable Plan Limits.
-
When a claim over a
dollar threshold is filed, TPA sends to ELAP for audit
prior to payment.
-
TPA pays provider
the audited amount with EOB denial of the excess charges.
-
Excess charges are
those above the Applicable Plan Limit.
-
Provider is
notified of its Right to Appeal, as per an assignment of benefits.
-
If the Provider
sues, ELAP will defend the Plan and ELAP will defend the participant
from balance billing.
v
Our
objective is to stay within the boundaries and protections of ERISA and
away from the arbitrary, and frequently abusive, provider billing
practices.
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-
Economic – Plans
simply cannot continue to pay inflated bills (see Chester County
example).
-
Legal - ERISA
mandates that plan assets be spent in a prudent manner. Fiduciaries
that pay inflated bills are not acting as good stewards of the plan
assets and could be breaching their fiduciary obligation under
ERISA.
|
