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Linda Farina |
October 10, 1999 |
Ms. Farina:
We have been subjected to the egregious, bad-faith claims handling tactics utilized by First Health to delay payment of meritorious claims since April 1995.
Claims submitted by Dr. Hamid Moayad, Neurologist, from April 1995, when I first became diagnosed with Lyme Disease (a disabling illness) until February 1996, were illegally withheld based on requests for "pre-existing" information from all providers for the previous 2 years. (As secondary payor, this information was not required, as later admitted by First Health.)
This information was supplied multiple times, yet the same denial codes continued to appear. Information from doctors I had never seen, much less heard of, also appeared in the information requests. I spent months attempting to resolve these problems before requesting assistance form Lenora Balthrop. She was extremely helpful, but managed to achieve only partial success, and that took 3 additional months. She failed to follow up and ensure total compliance with Plan provisions.
In February 1996, I received a letter from Sonya Driggers stating that the information used to deny claims was never needed in the first place (the only true statement in her letter) and that all delayed claims would be released and reprocessed. This letter was dated February 1, 1996. (As it turned out, only 75% of the claims were, in fact, released and reprocessed.)
Of the claims released and reprocessed, all but one required reimbursement by First Health, according to the Coordination of Benefits clause, because the Plan Allowed amount by my primary carrier (Lab Corp) was less than the First Health Plan Allowed benefit.
The remaining claims are still listed (erroneously) as "pending." A copy has been previously provided to you.
I have matching EOBs of all the properly reprocessed claims. However, 25% of the claims incurred during that timeframe still have not been released and reprocessed. The total dollar amount exceeds $17,000.00.
I brought this oversight to the attention of Sherri Hancock for resolution in August 1998. I included copies of all documentation along with examples pertaining to the problem. You were provided a copy of this correspondence. She apparently was unable to comprehend the nature of the complaint, or deliberately chose to ignore it. (Her only response was "Karen, please state your issues.") I received no acknowledgment from you on this serious breach of contract or her lack of action. If Sherri was unsure on procedures, she should have consulted with higher company personnel.
In an effort to expedite payment, I took on the arduous task of simplifying the problem by auditing all of my claims from April 1995 through July 1998, listing claims by claim number, fraudulent reasons for denial, total dollar amount, and date of service for each claim that remained unreleased. I faxed this information to you as Plan Administrator and fiduciary of our health-benefit plan. You chose to ignore this complaint based on the incorrect information contained in Sonya Driggers’ letter instead of investigating the facts on your own. It appears that neither our Benefits Administrator nor our Plan Administrator understands how to properly process a claim under the Coordination of Benefits provision. Her information was inaccurate and your "explanation" of the coordination of benefits provision was totally erroneous.
This process is simple. If Lab Corp has a higher Plan Allowed benefit, then First Health is not obligated to reimburse. However, if the First Health Plan Allowed benefit is higher than Lab Corp, then First Health is obligated to reimburse 80% of the difference based on Lab Corp EOBs.
This problem should not have been delayed for 4+ years.
Problem 1: Since First Health was secondary payor, the information requested was not necessary (or legal) in the first place. Ms. Driggers admitted this in her letter, but tried to justify her actions by saying they were not aware of my primary coverage. That is a blatent lie. When James "enrolled," the information was provided, and my coverage with Lab Corp was listed on every claim. Additionally, my faxed correspondence to First Health (when trying to get them to realize that my name is Karen J. Rose, not Karen J. Martin) contained the Lab Corp information. Once they "realized" I had other coverage, the cancelled "pending information" status should have automatically triggered reprocessing, not taken months of intervention requests that remain unresolved.
Problem 2: Her statement that all claims would be "released and reprocessed" was untruthful. Only a portion (75%) of the claims were released and reprocessed.
Problem 3: Her statement that "no benefits would be forthcoming because Lab Corp’s Plan Allowed benefit was not greater than First Health’s" shows her lack of insurance/health benefits business knowledge. The fact that the First Health Plan Allowed benefit was higher is exactly why reimbursement was required on all but one of the claims that made it through the promised "release and reprocessing."
Problem 4: Until these pending claims are released and reprocessed (in comparison to Lab Corp EOBs), it cannot be determined which plan pays the greater amount. We were assured that this problem would be resolved in 1996. It has not. This problem has existed for over 4 years. These unconscionable delays are jeopardizing our (as well as many other patients) access to the appropriate medical services.
Your immediate attention to this unresolved problem is required. As Plan Administrator, you have the personal authority and fiduciary responsibility to ensure that First Health abides by the contract.
Karen J. Rose / R. James Martin
