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A New Day For ERISA Claimants?

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  • A New Day For ERISA Claimants?

    There is a lot to work with for ERISA plan claimants under the PPACA. The new internal review requirements (more on that later) and the external review requirements are monumental changes in the law. For those new to ERISA and seeking to establish a practice, this could be the time since we will all have some work to do to keep current.

    Below appears a post I put up on tonight. I don't usually just cross post an entire article, but I feel that the developing issues about the proper standard of review under the new external review requirements merit careful consideration.

    I would greatly appreciate anyone sharing with me, either through reply or private message or e-mail, their experiences with external review under previous state law requirements. I am preparing for a symposium at the Charleston School of Law this month and your experiences would help me.

    Here's the post:

    The NAIRO released a white paper covering a number of points on the new external review requirements. A press release on the white paper appears here.

    Under the DOL’s point of view, the decision of the external review organization is binding. In other words, if Sue Smith requests external review of a benefit denial, the external review organization’s decision will be the final word, absent further judicial review to the extent available.

    The drafters of the interim guidance show a woeful lack of perspective on the existing state of the law under Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) and ancillary legal concerns over fiduciary status and deference in judicial review.

    The external review organization, if rendering a binding decision is a fiduciary is it not? Further, the plan likely affords the IRO no discretion, so is judicial review de novo? And what are the plan’s options, should the IRO find in favor of the claimant, i.e., rule that the benefit denial was in error? Unlike the claimant, the plan has no matching option under ERISA to the claimant’s right to file a claim for benefits, so what is the form of the plan’s challenge, if any, to an IRO decision in favor of the claimant?

    Many questions, few answers. After multiple calls to the “joint agencies” that issued the interim guidance, I have failed to receive a single call from any of the individuals named as contact persons in said guidance.

    Under the NAIRO white paper, the IRO would only offer “recommendations” not final decisions. (Apparently, the IRO’s errors and omissions carriers do not cover ERISA fiduciary claims.) Unfortunately, this position does not square with the regulatory guidance.

    In short, the present situation reflects regulatory guidance far ahead of any Congressional guidance, and a Congress negligent in providing clear statutory mandate. In short, the problem is a Progressivist investiture of authority in agencies with vague statutory standards and a lack of practical insight by the agencies -- and for good measure , a usurpation of judicial authority implicit in the attempt to confer final, “binding” authority on extra-judicial agencies (”IRO’s”).

    Self-funded plans should be cautious in relying on the NAIRO white paper which is fundamentally flawed in its assessment of the role of the IRO under health care reform regulations. For those curious, you may have better luck than I in finding a telephone number the that organization.
    Harmon & Major, P.A.
    Greenville, SC
    Health Plan Law