Carol Tekavec, RDH
A little known federal Labor Department "advisory opinion" was set into place in July 1996. It states that "usual and customary" fee schedules used to determine insurance benefits for companies falling under the ERISA act are "instruments under which the plan(s) (are) established or operated," and must be given to participants of the plans when requested in writing. The Labor Department`s rationale is that, under ERISA, participants have the right to information used in settling benefits that directly affect them.
In plain English, this means that the Labor Department thinks that patients, who are covered by insurance plans that fall under ERISA guidelines, are entitled to copies of usual and customary fee schedules used to determine their benefits. (This does not mean that dentists may request usual and customary fee schedules; only their patients covered under these plans may do so.)
ERISA stands for the Employ-ment Income Security Act of 1974. This act originally was put in place to protect employee pensions and company self-funded health plans. Congress wanted to encourage companies to provide both types of benefits, but did not want the states to be able to "overtax" the companies as insurance plans. Therefore, ERISA preempts any state legislation. (Self-funded plans are operated by employers who actually accept the financial responsibility for providing health care for their employees, even though a third party may administer the plan. Under a traditional plan, an employer contracts with an outside insurance carrier that bears the financial risk.)
When ERISA first came into being, few managed-care health plans existed. Most health benefits were fee-for-service plans, where the insurers paid the providers after treatment was rendered. Employees (patients) chose their providers "at will." The provider functioned completely separately from the insurer and was not influenced by the insurer. State laws protected patients from harm caused as a result of treatment from providers. There was no consideration about what kind of insurance plan patients had.
Today, managed-care programs are the most common plans offered to employees. Providers are associated with plans in a variety of ways, and payment for care is strictly regulated by the insurers. In some cases, patients and providers have wanted treatments that were denied payment. When the treatments were not provided, patients suffered. While insurers have pointed out that patients may have any treatment they want at their own expense, providers argue that removing payment typically removes access to the treatment, therefore interfering with patient care. While not the original intent of ERISA, the act protects the self-insured plans from many types of lawsuits, especially those arising from treatment issues.
The Labor Department has been proposing ERISA reform for many years. While it remains to be seen what reforms will be made and when they will go into effect, ERISA likely will be undergoing many changes in the future. The previously mentioned 1996 Labor Depart-ment advisory opinion does not change the current ERISA legal format, but it does indicate that, even under the present ERISA, participants are entitled to certain types of information. This includes how "usual and customary" fee schedules are determined.
As reported in the March 8 issue of the ADA News, the U. S. Department of Labor, which sets standards for 2.6 million health plans under ERISA, reconfirmed this position at a public hearing held in Washington, D.C., in February .
New proposals for ERISA include, but are not limited to:
- a requirement that when benefits are denied, the basis for denial, including carrier guidelines and protocols, are available to subscribers
- including dental plans as "health plans" covered by any new rules made
- new standards for case review and appeals
While organized dentistry favors these changes, the National Association of Dental Plans holds that these changes are restrictive and of more benefit to dentists than patients. The Labor Department is in the process of determining what, if any, changes will be made to ERISA. So far , it has not indicated when new rules will be officially released.
Carol Tekavec, RDH, is the author of two insurance-coding manuals, co-designer of a dental chart, and a national lecturer with the ADA Seminar Series. Contact her at (800) 548-2164 or at www.steppingstonetosuccess.com.
