PACE Second Quarter Success Stories

By: The Phia Group

Fiduciary liability tied to final level appeals has never posed a more significant risk for the stewards of self-funded health plans. As we speak, self-funded plans across the nation are staring down medical claims for hundreds of thousands of dollars winding their way through the appeals process. But The Phia Group’s well-established Plan Appointed Claim Evaluator (PACE) program continues to help plans navigate complex appeal processes and regulatory requirements by ensuring that all pertinent materials, including plan documents and stop-loss policies, seamlessly align.

In the second quarter of 2026, PACE once again ensured plans were in compliance with federal law and avoid potential liability across a wide spectrum of cases, including the following scenarios:

• Recently, The Phia Group’s PACE team received an appeal of a denial of a very expensive claim for Emergency Services, one that relied on a plan exclusion. Upon comprehensive review of the appeal, PACE determined that the initial denial was inconsistent with federal requirements applicable to emergency services. More specifically, the PACE directive concluded that this particular denial of emergency services should be partially overturned because federal regulations prohibit applying a general plan exclusion to services that qualify as Emergency Services under the No Surprises Act (NSA). Ultimately, the appeal outcome changed from denial to partial overturn as PACE helped this plan work through complex appeals matters and regulatory requirements to ultimately avoid a potentially devastating compliance issue.
• There are many cases in which PACE, upon conducting comprehensive plan document reviews, flags compliance concerns about Mental Health Parity and Addiction Equity Act (MHPAEA) parity requirements, often ones including therapy visit limit structures, potential disparities between mental health/substance use disorder and medical/surgical facility definitions, medical necessity criteria, and licensing requirements and plan language grounded in ambiguous eligibility criteria or external clinical policies. In this past quarter especially, PACE has identified many plans having therapy visit and residential treatment limitations that could trigger parity concerns, as well as eligibility provisions based on undefined or ambiguous terms. In many such cases, these issues did not necessarily represent intentional compliance failures, but rather drafting inconsistencies that developed over time as plans were amended.

By highlighting these issues prior to them resulting in participant disputes, regulatory scrutiny, or litigation hassles, PACE was able to help clients enhance the clarity and consistency of their plan documents while reducing potential for compliance and fiduciary risk down the road. These PACE reviews also instilled confidence in employers that their written plans accurately reflected the benefits they intended to offer and provided participants with clearer expectations regarding coverage.

As the second half of 2026 unfolds, PACE will continue providing expert appeals management to ensure compliance and shield plans against painful fiduciary liability arising from these very scenarios and so many others.