Presented at NEDA by
Stacey Brown and
David Christian,
Avalon Hills
Lisa S. Kantor, Esq.,
Kantor & Kantor LLP
October, 2011
www.AvalonHills.org
www.KantorLaw.net
• Stacey Brown
• Director of Nursing and Utilization Review at Avalon Hills Eating Disorder
Treatment Program in Logan, Utah
• Oversees all aspects of insurance pre-certifications, concurrent
authorizations, appeals, external reviews, and clinical collaboration with
legal counsel when insurance litigation becomes necessary
• David Christian
• Clinical Psychologist, Consultant, Avalon Hills Eating Disorders Treatment
Program.
• Trains therapists to document patient care in ways that maximize
insurance authorization.
• Lisa Kantor
• Partner and Founder, Kantor & Kantor LLP
• Litigates insurance coverage issues for eating disorders across the
country, addressing issues such as medical necessity and mental health
parity.
www.AvalonHills.org
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• For most clinicians, patients, and families, insurance
is a confusing and frustrating game for which they
receive little or no training.
• How you play the game can help or hurt you and
the outcome.
• The more you know about the game the more
effectively you can play.
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•Anyone who works in any area of patient
care, is involved.
•As a provider, are you treating to outcome or
do you treat to benefit? Ask yourself these
questions:
• Does my patient still need treatment even
though insurance has denied?
• Am I willing to fight for the coverage I believe this
patient deserves and needs?
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•Types of plan funding:
• Fully funded – the insurer has complete
governing power until it goes to an external
review.
• State funded – these often are governed by
different state laws; fighting often requires
litigation
• Self-funded (operate under ERISA – Employee
Retirement Income Security Act); very often does
not have an external appeal option.
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Insurance Authorization Depends On
How You Get Your Coverage
 Two
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ways to get coverage
Benefits obtained through an Employer (even
if you pay some or all of the premium) –
covered by the Employee Retirement Income
Security Act (ERISA) [Note: Does not apply
to government or “church” employees]
A policy purchased privately, through an
insurance agent.
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Employer Benefits – ERISA
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ERISA is a federal law that governs the insured’s rights
If a claim is denied, an appeal must be timely filed
before the insured can file a lawsuit
Insurers may be given great leeway
No jury trials
Federal judges make decisions if you have to file suit to
get your benefits
The judge will review the contents of the claim file and
very little else
Remedies are limited to benefits and attorney’s fees
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Individual Insurance
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Typically no appeals required before a
lawsuit can be filed
Juries (not lifetime appointee judges)
make the decision on your case
Evidence outside of the file may be
considered by the jury
Remedies may include benefits, emotional
distress, attorneys fees and punitive
damages
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Important Differences Between ERISA
and Individual Coverage
ERISA Plans:
Individual Coverage:
No individual underwriting
Individually medically
underwritten
Cheaper – and your
employer may pay
More expensive and you pay
all the premium
Remedies restricted
Bad faith remedies available
in many states
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How did you get your coverage?
through my, or my
spouse’s, or my parent’s
employment
private purchase
Who is your employer?
Government,
religious entity
All others
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WHAT YOUR INSURANCE COMPANY
DOES NOT WANT YOU TO KNOW

“. . .ERISA imposes higher-than-marketplace
quality standards on insurers. It sets forth a special
standard of care upon a plan administrator, namely, that
the administrator “discharge [its] duties” in respect to
discretionary claims processing “solely in the
interests of the participants and beneficiaries” of
the plan, . . . it simultaneously underscores the
particular importance of accurate claims processing
by insisting that administrators “provide a ‘full and fair
review’ of claim denials.”
Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 2350 (2008).
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HOW DO
YOU
KNOW
WHAT
YOUR
POLICY
SAYS…
IF YOU
DON’T
HAVE A
COPY?
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1.
2.
3.
4.
5.
6.
7.
8.
Verification of Benefits (be prepared for misquotes)
Intake – precertification
Ongoing concurrent reviews.
Constant collaboration with members of the treatment
team.
Doc to docs – if there is a question about criteria being
met, case managers will always defer to medical
directors; therapists or psychiatrists may do these
reviews, in spite of what the insurer may tell you.
The medical director will either recommend additional
authorization or deny.
If denied, consider appeal options.
If appeals fail, consider litigation.
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1.
Medical Necessity
 Parity Laws require that mental health coverage
be provided commensurate with medical health
coverage
 Medical stability will occur long before
psychological stability
 State definitions trump an insurer’s definition of
medical necessity;
 look for loopholes; the following link provides
comprehensive information regarding medical
necessity, including state definitions:
http://store.samhsa.gov/shin/content//SMA033790/SMA03-3790.pdf
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2. Exhaustion of benefits
Know the policy
They may deny benefits included in the policy
Know the state’s involvement with mental health parity laws:
They may or may not participate in parity.
3. Rigidity in what the insurer thinks treatment should look like,
e.g.,:
Telephonic family treatment
Partial with boarding (you can legally bill for a lower level of
care than what is being delivered
Some try to selectively exclude eating disorder patients
Therapeutic exposure home passes
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1.
2.
3.
4.
5.
6.
7.
Conflict of Interest
The Rubber Ruler
Straw Man Argument
False Authority
Red Herring
Non Sequitur
Post Hoc Fallacy
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Definition: They set things up so they can play
both prosecution and judge.
Example: 1. They write AND interpret the
policy. 2. They allow an external appeal that is
not truly independent.
Response: 1. Confront capricious
interpretations of the policy. 2. Make sure
external appeals are independent.
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Definition: They use poor measures of
recovery (Non-APA standards).
Example: “She does not meet our standards
for residential care so we are denying it.”
Response: Point out when their standards are
not inconsistent with best practice. (i.e., APA
standards).
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Definition: They emphasize an irrelevant
issue, ignoring more pertinent issues.
Example: “She is now in her ideal weight
range so she is ready for partial
hospitalization”
Response: Point out that they are ignoring the
larger psychological, social and environmental
factors
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Definition: They appeal to false authority.
Example: “Dr. Jones, the clinical director, says the
patient must be stepped down in care. So that’s
that.”
Response: Check credentials. Is Dr. Jones a true
authority in eating disorders (by training, experience,
credentials, etc.)? Does she have a bias given
previous decisions on this case? If so, request
someone with proper credentials.
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Definition: An irrelevant issue is raised to “take
you off the scent” of more important issues.
Example: They “make a stink” over something
clinically insignificant (e.g., authorization was not
obtained in a timely fashion) to distract attention
from their ethical and clinical obligations.
Response: Bring the attention back to the ethical
and clinical issues of patient care.
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Definition: Their Conclusions
don’t follow from the
premises.
Example: They say “She is not
improving much. Therefore
she needs to step down to
IOP.”
Response: Try a reversal. Is not
the opposite conclusion just as
valid? (i.e., She needs more
intensive residential treatment
or possibly hospitalization.)
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Definition: They apply one standard to you and
another to themselves.
Example: Their medical director denied residential
treatment because it involved telephonic family
therapy. He said phone therapy cannot be as good as
live therapy. Yet he based his denial completely on
telephonically-obtained data!
Response: Point out the inconsistency of their logic.
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Definition: The post hoc fallacy occurs when A is
said to be the cause of B, because B follows A.
Example: They claim that because relapse
followed treatment, treatment was inadequate or
the cause of relapse.
Response: Correlation does not mean causation.
Point out the other plausible causes of the event.
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To justify level of care: Use the APA Practice Guidelines for Treating
Eating Disorders in composing treatment notes. Address these
issues:
1. Motivation to Recover (e.g., cooperativeness, insight, ability to
manage obsessive thoughts).
2. Co-occurring Disorders (e.g., substance abuse, depression,
anxiety)
3. Structure Needed to for Eating/Weight Gain (e.g., supervision at
meals, snacks, etc.)
4. Ability to control compulsive exercising.
5. Ability to inhibit purging.
6. Environmental Stress (e.g., social/family support)
7. Geographic availability of treatment (in their home area).
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You should challenge a denial when:
•
•
•
•
•
You believe that the denial is clinically
inappropriate (see APA guidelines)
You have identified “structural conflicts” with
the insurer (Metropolitan Life Ins. Co. v. Glenn,
128 S. Ct. 2343 (2008)).
You detect logical fallacies in their reasoning.
They violate the policy or plan terms.
They violate the law.
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The obligation to communicate . . .
“Under federal law, an ERISA plan “shall provide to every claimant
who is denied a claim for benefits written notice setting forth in a
manner calculated to be understood by the claimant:
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(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent plan provisions on which the
denial is based;
(3) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(4) Appropriate information as to the steps to be taken if the
participant or beneficiary wishes to submit his or her claim for
review.” 29 C.F.R. § 2560.503-1(f).
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The obligation to communicate…

In simple English, what this regulation calls for is a
meaningful dialogue between ERISA plan
administrators and their beneficiaries. If benefits are
denied in whole or in part, the reason for the denial
must be stated in reasonably clear language, with
specific reference to the plan provisions that form
the basis for the denial; if the plan administrators
believe that more information is needed to make a
reasoned decision, they must ask for it. There is nothing
extraordinary about this; it's how civilized people
communicate with each other regarding important
matters.” Booton v. Lockheed Medical Benefit Plan, 110 F.3d 1461 (9 Cir. 1997).
th
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THE LAW OF ERISA APPEALS

There are two critical things to know
about ERISA appeals
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The insured is entitled to a copy of the claim file –
sometimes called the administrative record – before
the appeal is decided
The insurer or plan may be entitled to discretion in
deciding the appeal
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WHAT IS THE CLAIM FILE AND
HOW DO I GET IT?
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The claim file consists of any document, record or other
information that was relied upon in making the benefit
decision, was submitted, considered or generated in the
course of making the benefit decision, or is a statement
of policy or guidance with respect to the plan concerning
the denied treatment (29 C.F.R. Section 2560.5031(m)(8))
The insured is entitled, upon request and free of charge,
a copy of the claim file (29 C.F.R. Section 2560.5031(h)(2)(iii))
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PLAN DISCRETION:
THE FOX GUARDING THE HEN HOUSE
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Many plans/policies provide that the entity deciding whether
to pay claims has the “discretionary authority” to construe
and interpret the Plan and determine eligibility for benefits
This means that the court will give deference to the decision
of the Plan or insurer – the decision DOES NOT HAVE TO BE
RIGHT, IT ONLY HAS TO BE REASONABLE
BUT when the same entity is deciding whether to pay claims,
and is paying approved claims, the Supreme Court says there
is an “inherent” or “structural” conflict (Metropolitan Life Ins. Co. v.
Glenn, 128 S.Ct. 2343 (2008))
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The fox guarding the hen house (continued)
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A "structural" conflict of interest introduces an element of
skepticism into what would otherwise be deferential judicial
review.
The degree of skepticism depends on the extent of the
conflict. The types of evidence tending to show the influence
of a conflict include:
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inconsistent or insufficient reasons for the denial
determining a material fact without supporting evidence
failing to follow plan procedures
failing to provide a full and fair review of the denial
acting as an adversary bent on denying the claim
The more evidence of conflict, the less deference afforded to
the administrator, and the more "skeptical" the review
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WRITING THE APPEAL
LETTER
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This letter is submitted in support of Jennifer’s appeal of the
denial of continued treatment . We will explain the history of
Jennifer’s disease and treatment. We trust that, after reading
this letter, which carefully documents Jennifer’s need for
continued inpatient treatment, you will approve Jennifer’s
request to continue that treatment.
Summarize the prior letters and documents
Point out the inconsistencies
Point out the irregularities
Point out the omissions
Enclose any new documents: treatment records, letters of
support, journals, videos, independent medical examinations
Conclude with specific requests
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•
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Denial letters provide the most accurate
information for appeal options
Internal Appeals (most policies provide 2)
1st level can be done expedited (telephonically)
2nd level is much longer, requires submitting records
External Appeal
True external appeal reviewers should have NO
connection to the insurer and are appointed by the
State Insurance Commissioner
The determination of the external reviewer is binding
Litigation
Select attorneys who specialize in insurance litigation
(e.g., Lisa Kantor)
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• Know what your policy says!
• Be assertive and don’t give up!
• Document everything!
• Send everything to the insurance
company in writing, return receipt
requested!
• This is a marathon, not a sprint!
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Presented at NEDA by
Stacey Brown and David Christian,
Avalon Hills
Lisa S. Kantor, Esq.,
Kantor & Kantor LLP
October, 2011
www.AvalonHills.org
www.KantorLaw.net