The Phia Group was asked by a health plan’s third-party administrator to review a stop-loss claim denied due to a combination of insufficient disclosure and payments by the plan in excess of the maximum allowable amount. Specifically, the stop-loss carrier contended that the plan failed to disclose large claims incurred by this particular plan participant between the time of the policy’s initial disclosure and the date the carrier received the plan’s initial premium payment.
The plan sponsor contended that it fulfilled its disclosure obligations by notifying the carrier of the plan participant’s known risk at the time of initial disclosure, and that actual claims incurred based on that risk were not specifically required to be continually disclosed. This argument created an impasse, since the policy’s disclosure requirement language was fairly vague and either interpretation was potentially viable. From all angles, it looked like reimbursement would not be forthcoming, and a longstanding relationship was about to crumble.
The Phia Group was asked to provide its assessment of this matter; after reviewing the entire file in detail, The Phia Group recognized the impasse and the unlikelihood of a simple solution. The goal, then, became fostering meaningful communication between both parties. To that end, The Phia Group drafted a detailed letter to the stop-loss carrier outlining the plan’s position, legal arguments to bolster that position, a good faith appeal to the carrier explaining why our entire industry benefits when carriers and plans work together, and of course the business case for the carrier’s reconsideration.
As a result of our efforts, The Phia Group was able to open a dialogue with the carrier; after many hours of negotiation and discussion, the stop-loss carrier was willing to make the plan a generous settlement offer, representing the vast majority of the claims that would have otherwise been denied.
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