Executive Summary: The Phia Group Interprets a Confusing Exclusion Saving The Plan Over $3,000.00 in Legal Fees – Provides Network Guidance to The TPA – Saves a Plan From Losing $46,800.00 in Discounts and an Expensive Legal Battle
A Plan’s document excluded payment to treat injuries caused by or during the commission of a felony. A member committed three separate and unrelated DUI offenses, each one a misdemeanor under state law. During the third, injuries were sustained and the Plan Administrator denied the claims, as arising from an “illegal act.” The member and hospital appealed the denial, which charges totaled $156,000.00, with a discount of $46,800.00 (30%). The Plan denied the appeal and another appeal was submitted, this time being referred to the PACE for review.
The PACE performed an extensive legal review, including applicable state law research, as part of the PACE service, saving the Plan over $3,000.00 in outsourced legal fees. The PACE found that the claims were not deniable under the exclusion cited by the Plan Administrator, since DUI was a misdemeanor pursuant to the applicable state law, whereas the plan document only allowed for the denial of injuries arising from felonies. The PACE also advised the TPA that due to the matter already extending beyond the network limit of 30 days, the discount had technically been lost. The PACE, however, offered to communicate with the provider and network, to obtain an extension, and thereby prevent the loss of the network discount. The PACE did so, and The Plan Administrator promptly, and properly, paid the claims, thus saving the Plan from a likely legal battle, attorney’s fees, loss of network discount and the potential loss of a network relationship, all of which would have easily cost the Plan well over $70,000.00.