Because most health insurance is an employer-sponsored benefit, most commercial payers are governed by the federal employee benefits law called ERISA. ERISA’s regulations require that any recoupment decision be clearly justified and explained. Payers must share with the provider all the documentation supporting the decision and give the provider an opportunity to appeal.
Here are some specifics providers should know about ERISA and commercial audits:
- ERISA applies to group health plans (insured or self-insured) where the employer is a private company, not a governmental entity.
- If a payer decides during an audit to reverse a prior claim decision and seek to obtain a refund of a previously paid service or test, then ERISA can pre-empt (take over) all other applicable law, including any terms regarding recoupment contained in a provider agreement with the payer.
- Once ERISA takes over, the payer needs to follow the ERISA claims regulations, which require, for example, that the payer explain its position in detail, turn over all emails and documents related to its position, on request, and allow for an appeals process.
- There is no provision in ERISA or the claims regulations that would permit a payer to offset ongoing claim payments with alleged recoupment debts, so under ERISA the payer may not have this option.
Richard Quadrino, founding partner of Quadrino Schwartz, New York City.
