Healthcare Operating Margins Are Thin So Utilize the Federal ERISA Process to Collect on Those Unpaid Claims

According to the experts, the expense growth rate for hospitals is steadily declining as time goes by. Some are predicting that by 2025, the expense growth rate will actually be a negative percentage. What does this mean for hospitals and health care clinics? It means that you need to take the necessary steps now in order to boost your bottom line and improve your financial situation. The future of your clinic or hospital depends on it! Thankfully, you can utilize the Federal ERISA process in order to collect on unpaid claims, thereby getting the money that you need in order to both continue operating and save some for those predicted lean years. Here’s what you need to know about ERISA.

Some Background on the Federal ERISA Act

ERISA stands for Employee Retirement Income Security Act. The full name of this law is the Employee Retirement Income Security Act of 1974. It’s no wonder that most people shorten it to ERISA. Despite having the year “1974” in its name, this law actually started on January 1, 1975. It was initially designed for employee retirement plan. ERISA set a number of minimum standards in place, including minimums for vesting and how long an employee has to be working for a company in order to be eligible to qualify for a retirement plan. There’s a certain amount of transparency required as well. Although the act doesn’t force a company to offer retirement plans and health insurance, it does regulate them.

This brings us to the health insurance portion of ERISA. Yes, despite its name, it provides federal guidelines and standards for employee health insurance, particularly self-funded plans. This is where the ERISA appeals that we’re discussing come into play. We’ll explain them in a bit more depth later. For now, let’s focus on the act itself. If a person works for a private company (as in, not a church or a state or federal government office), and they pay into your health insurance plan every month, then that plan most likely falls under Federal ERISA laws.

So, how did ERISA end up as a law? Well, the main idea for it was started in the early 1960s when the Studebaker Corporation closed its plant and couldn’t afford to pay its employees their pensions. The need for transparency in these plans turned into a number of bills that wound up becoming the final ERISA law that then-president Gerald Ford signed on September 2, 1974. Fittingly, it was Labor Day.  

Federal ERISA Appeals

Health Insurance and ERISA

Over the year, many amendments have been made to the Federal ERISA Act. It protects individuals in self-funded commercial healthcare plans, while at the same time, it ensures that hospitals and clinics get paid. This latter part is conducted through the ERISA appeals process.

Two of the main (and most well-known) amendments to ERISA are COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) which allows terminated employees to remain covered under their former employers health care plans for a set period of time and as long as they pay the full amount, and HIPAA (Health Insurance Portability and Accountability Act of 1996) which is best known for setting health privacy laws into place. Although both of these amendments are well known, what some people don’t realize is that ERISA appeals are a part of the law.

Does the ACA Have Anything to do with ERISA?

One common misconception is that when the ACA (Affordable Care Act) went into place, it negated the health insurance portion of ERISA. This isn’t true at all. In fact, the ACA adopted every single part of ERISA – ERISA appeals and all. The ACA changed a lot of things about health care, including the time frame required for state-level appeals. It didn’t do anything to get rid of the federal level ones – ERISA appeals. As a result, hospitals can still use this law to get money owed to them by commercial insurance companies, as long as they know how.

Federal ERISA Appeals

What You Need to Know About Federal ERISA Appeals

Hospitals usually go through a lengthy appeals process on the state level. Here’s how it works: Patients have procedures done. Some of these are outpatient procedures; others require a hospital stay of some sort. The hospital billing staff go through and give everything an appropriate code and amount. These codes depend on the procedures, the care involved, the medications prescribed, and so on. Those coded bills are sent out the commercial insurance companies. Which company they go to depends on who that patient’s insurer is. The commercial insurance company has a process that they go through to get those bills paid. In some cases, they’ll pay a portion of it or reject it outright. The hospital’s billing staff can appeal this at the state level up to three times. That’s a lot of paperwork to have to deal with in a tight time frame. If your hospital is lucky, then some of those claims will get paid. Others will go back and forth without getting paid at all. The reasons for this can vary and depend on many different things, including billing codes, pre-approvals, and what the commercial insurance company thinks should be covered or paid for.

After those three state-level appeals are exhausted, your hospital could file Federal ERISA appeals on all of those unpaid or underpaid claims. The problem with this is that you don’t know how. The process is complex, and most billing departments are busy either with sending out current bills or wading through state-level appeals. In most cases, those unpaid and underpaid claims end up getting written off.

ERISA And Your Bottom Line

The Federal ERISA appeals process is designed to get your hospital the money that it’s owed from those commercial insurance company. How does this process work? Well, you can start by not writing off those amounts. Instead, organize them into a file and then contact a company that handles these types of appeals. ERISA Recovery is one such company. All that we need from you – to begin with anyway – is a list of those claims. We can take it from there, although we might need more information in the future, so make sure that your chargemaster rates and codes are up to date. ERISA Recovery guarantees that we’ll recover at least one million dollars in denied claims within 12 months.

Instead of ending up on the wrong side of your hospital’s balance sheet where it directly affects the financial stability of your institution, that money will end up in your bank account. We know how tricky it can be to recover these claims, which is why we don’t require you to pay for our services up front. Yes, you read that right – we operate on a contingency basis.

We Can Help

Now that you understand the Federal ERISA appeals process and everything that it entails, you need a company that can help you get that money. You don’t want your hospital to end up going bankrupt or shutting down – not when there’s money out there that you can still collect. This is why you need to contact ERISA Recovery today. You can reach us at (972) 331-4140 or by filling out the contact form on our website. It’s time for you to move forward and take control of your hospital’s financial future!