CNN's Wayne Drash reported that in a recent deposition, Aetna's former medical director for Southern California, Dr. Jay Ken Iinuma, admitted that he did not review medical records before denying requests to pre-authorize medical procedures. The case involves Aetna's coverage denial for an infusion of intravenous immunoglobin. Rather than actually reviewing the records, CNN said the medical director testified that he relied upon the materials and suggestions provided to him by Aetna's nurses when making coverage decisions.

Such irresponsible practices would not come as a surprise to us. The purpose of this article is to provide health care provider counsel with lessons and techniques to properly defend coverage and payment disputes with insurers.

Our firm regularly represents health care providers, from hospitals to clinical laboratories to medical groups, involved in coverage and billing disputes with health insurers. Based on our experience and the country's judicial record, many health insurers throughout the country do not appear to follow proper claims procedures when making decisions concerning medical services. Errors may occur not only in the authorization process and during pre- and post-payment record reviews, but also during overpayment demands, fraud investigations and other audits. Once initiated, the medical record review process can often seem like a self-fulfilling prophecy to providers—that is, some denial of coverage and/or overpayment recoupment is inevitable.

There are of course legitimate reasons for medical record reviews. Insurers monitor for fraudulent or medically unnecessary claims, including duplicate claims, overstated services (through “upcoding”) and the like. The testimony reported by CNN, however, provides a glimpse into how insurance coverage determinations are often actually made. Deficient claims practices often violate the Employee Retirement Income Security Act of 1974 (ERISA), which governs those health plans that are established or maintained by an employer, subject to certain exemptions. (29 U.S.C. § 1003(b)). Such practices may also expose insurers to liability under Georgia's insurance code. (O.C.G.A. § 33-24-59.5).

ERISA regulations require group health plans to maintain certain claims procedures. (29 U.S.C. § 1133, 29 C.F.R. § 2560.503-1). Pursuant to ERISA, a health insurer's decision to deny coverage for medical procedures is considered an “adverse benefit determination.” (29 C.F.R. § 2560.503-1). The plans and their administrators must provide beneficiaries a “full and fair review” of adverse benefit determinations upon request. For example, when an adverse benefit determination is based on a medical judgment, the insurer must consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment.

Frequently in our practice we have seen insurers that demand providers repay thousands or even millions of dollars based on record reviews that did not appear to meet the full and fair review requirements of ERISA. For example, one insurer provided spreadsheets where (inferentially) a data entry worker simply copied and pasted the same denial reasoning uniformly for hundreds of separate claims concerning different patients and different procedures. Their denial remarks directly contradicted what the records actually portrayed.

There are numerous techniques attorneys can use to combat poor or opportunistic medical record review procedures. Attorneys for providers, particularly those “out of network” with insurers, should begin by ensuring that their clients receive valid and enforceable assignments of benefits (AOB) from their patients. (O.C.G.A. § 33-24-54). The provider's rights to pursue health plan benefits is significantly greater where the right to pursue claims is assigned, so that the provider “stands in the shoes” of the patient. Valid and properly executed AOBs—evaluated under state contractual law for Georgia providers—can permit a provider the ability to pursue legal action based on state contract law and the insurers' obligations under member health plans.

Encourage your clients to be proficient with each insurer's appeal procedures. Health insurers maintain different appeals procedures for authorization denials, post-payment reviews and other benefit determinations. Providers should always exhaust these appeal procedures before pursuing civil action, if possible; otherwise, a future lawsuit against the insurer may be dismissed for failure to exhaust administrative remedies. Civil claims for violations of claims procedures, such as inadequate record reviews, may be brought in federal court under ERISA. (29 U.S.C. § 1132). Providers assigned benefits, and patients, can request that the court enforce claim payment coverage, pursue plan benefits and obtain various other forms of relief.

Beat the insurers with their own policies. Attorneys must know the ins and outs of insurers' reimbursement, medical and other policies applicable to their client better than the health insurers themselves. Counsel should also be able to identify when changes or revisions to a policy occur, because they change frequently. We have observed auditors citing current policies to deny claims, even though the policy did not exist when the claim was submitted by the provider. Quite often, insurers will reverse a determination simply because they misapplied their own policies. Many of these policies are maintained on the insurers' websites, and copies can be obtained from the insurers' provider relations representatives. If the amount in controversy is large enough, attorneys should also consider soliciting expert testimony.

It is important that lawyers representing health care providers in disputes with health insurance companies appropriately assist their clients both preemptively before disputes arise, and during such disputes. Ensure that your client is following billing protocols and appropriately represents the services performed in their claims. During a dispute, understand the provider's appeal rights with the health insurer and exhaust them prior to initiating civil action. Know each ERISA claim procedure that the health insurer violates. Health insurance companies often nickel-and-dime providers in an effort to avoid certain claims. Make sure your clients fight their penny-pinching attitudes.

Yussuf Aleem is a graduate of Harvard Law School and is a partner at Joseph, Aleem & Slowik, where he and Senior Associate Ryan Morris focus on fraud and abuse defense, compliance and regulatory matters.