Protect The Plan - Plan Appointed Claim Evaluator (PACE) - Case Studies
Case Study #1: Plan’s Denial Upheld by PACE

Executive Summary: The Phia Group Interprets a Complex Exclusion Saving the Plan Over $3,000.00 in Review Fees and $60,000.00 in Claims


A Plan Administrator denied out-of-network claims related to self-inflicted injuries under the Plan’s “self-inflicted” exclusion. The claims were in excess of $60,000.00. The member appealed, citing his own history of alcoholism as the medical condition which caused the injuries (and therefore requiring the claims be paid under federal law). The Plan did not find any evidence of alcoholism in the related medical records or in the member’s claim history. The original denial was upheld. The member appealed again, and the final, internal appeal was referred to the PACE. The PACE performed a legal and medical review as part of the PACE service, which reviews would have cost the Plan over $3,000.00 in legal and medical review costs. The PACE found no medical evidence to suggest the member was an alcoholic or that alcoholism caused the self-inflicted injuries then issued a directive that confirmed the Plan Administrator’s interpretation of the exclusion.

Case Study #2: PACE Reverses Plan’s Denial; Helped Plan Save Network Discount

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 $46,8000.00 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.  

 Case Study #3: Plan’s Denial Overturned by PACE, Stop-Loss Denies Reimbursement, PACE Appeals & Secures Reimbursement

Executive Summary: The Phia Group Identifies a Processing Error, Overturning an Adverse Benefit Determination, and Preventing a Fiduciary Breach – Subsequently Negotiates the Billed Charges to Save The Plan $82,000.00 – as well as Handles a Stop-Loss Denial to Prevent More Than $100,000.00 in Plan Losses

A Plan’s out-of-network allowable rate was defined as the usual and customary rate for the geographical area. The stop-loss policy had a matching definition and a specific deductible of $75,000.00. A member incurred $205,000.00 in out-of-network claims, which the Plan Administrator sent to a clinical auditor. Based on the audit the allowable was reduced to a Medicare like rate and specific coding errors were removed and denied, based on coding guidelines. The initial appeal was received and the partial claim denial was upheld. Another appeal was filed and referred to the PACE as the final, internal appeal.

The PACE performed a legal review of the matter, as part of the PACE service, saving the Plan over $3,000.00 in legal costs, and discovered that the plan document did not allow for the Medicare like rate reductions to be taken. The denial of the coding errors was upheld but the Plan Administrator’s application of the Medicare like rate was found to be inappropriate. The Phia Group assisted the Plan in negotiating the claims through its Claim Negotiation & Signoff service, resulting in the provider accepting payment of approximately $123,000 (60% of billed charges).

When the amounts over the stop-loss $20,000 specific deductible were submitted to stop-loss for reimbursement, the carrier denied the reimbursement, citing the payment amount as excessive. The Phia Group, as the PACE, immediately spearheaded the stop-loss appeal and worked with the carrier until the carrier realized that their denial was improper, resulting in the carrier overturning the stop-loss denial, and preventing a loss to the Plan of approximately $103,000.00.

Case Study #4: Plan’s Denial of Experimental Claim Upheld by PACE

Executive Summary: The Phia Group Handles a Complex, Appeal Regarding Experimental Claim(s) – Saves The Plan Over $100,000.00 – Provides Network Guidance

A network provider billed a Plan for services which the Plan denied as being “Experimental” as defined by the plan document. The services would have been recurring, bi-weekly, and billed at the rate of $15,000.00 per service. The member and provider appealed the denial, and in response the Plan provided its plan document language and a simple non-clinical explanation. A second and final, internal appeal was filed by the member, providing additional documentation from the medical provider, and demanding clinical data to support the denial while also noting the denial was incorrect based on the provider’s contract with the network.

The final appeal was referred to the PACE, where, as part of its service, a thorough legal and medical analysis was performed, saving the Plan in excess of $4,000.00 in outsourced legal and medical review fees. In its findings, the PACE provided a detailed description of the plan document’s language and its implications on the specific claims, including widely-accepted clinical guidelines to support the basis for denying the claims as Experimental, in line with the plan document’s language, while also thoroughly explaining why the network contract had no impact on the denials.

The PACE’s directive was shared with the member and the provider in the final adverse benefit determination. The provider submitted one more appeal, which the Plan Administrator properly denied as improper per the terms of the plan document.

Case Study #5: Medically Unnecessary Claim Denial Upheld by PACE; Patient’s Obligation Negotiated to Manageable Amount

Executive Summary: The Phia Group Handles a Confusing, Medical Necessity Appeal Regarding Genetic Testing – Facilitates and Pays For The External Review – Saves the Plan over $5,500.00 in Review Fees and Tens of Thousands in Claim Costs

A genetic specialty lab submitted claims for testing based on a Plan member’s family history and complaint of abdominal pain. The testing was billed at a rate over $6,500.00 per test, with the possibility that multiple tests would be required. The claims were denied, as the genetic testing provision in the plan document only covered genetic testing when proven to be medically necessary for the treatment of a member’s specific medical condition. The member appealed with the help of the provider, who provided case studies from the laboratory indicating the testing was considered medically necessary for various medical conditions. The Plan Administrator determined the specific genetic tests were not medically necessary for the member’s specific medical condition. A final, internal appeal was submitted and referred to the PACE.

The PACE performed medical and legal analysis, as part of its service, saving the Plan a minimum of $4,000.00 in outsourced review fees. The PACE came to the same conclusion as the Plan Administrator, finding the claims for genetic testing were not considered medically necessary under the Plan. The member sought redress via external review through an IRO. The external review notice was given to the Plan’s TPA, which notified the PACE, which submitted the claim to an appropriate IRO. As part of the PACE service, the PACE handled the entire IRO referral, including the IRO’s payment of $1,500.00. The IRO came to the same conclusion as the PACE and Plan, resulting in the provider having no choice but to accept the denial.

Case Study #6: Plan’s Internal Dispute Resolved by PACE; Balance-Billing Successfully Negotiated

Executive Summary: The Plan Administrator Interprets the Plan Document so that Claims are Denied, but Executive Level Member of the Plan Sponsor’s Organization Wants the Claims to be Paid; the PACE Removes Fiduciary Burden, Upholds the Plan Terms, and Negotiates to Avoid $25,000.00 in Balance Billing and Extreme Member Disruption

A Plan Administrator denied $25,000 in out-of-network claims related to injuries that were caused by dangerous, recreational activities. The Plan’s appointed Plan Administrator properly applied the “hazardous activity” exclusion; however the injured plan participant was the son of a high ranking executive level member of the Plan Sponsor’s organization. The executive was insistent that the claims should be paid, despite the fact that such payment may expose the Plan to claims of discrimination and breach of fiduciary duty, making it difficult for the Plan Administrator to uphold the terms of the Plan.

The member appealed and was denied. The member appealed again, and this time the final, internal appeal was referred to the PACE. The Plan Administrator thereby avoided a continued conflict with the executive, the PACE performed a review as part of the PACE service, (which would have cost the Plan over $3,000.00 in costs), and provided both justification for the denial as well as a concrete basis to uphold the Plan terms for the executive. As expected, the provider balance-billed the patient for the uncovered claims. On behalf of the Plan Sponsor and executive, The Phia Group negotiated with the provider on the patient’s behalf, and achieved closure of the account for a payment by the patient of 25% of billed charges (a payment of only $6,250).