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    Reimbursement Q&A

    Getting Reimbursed by Self-Funded ERISA Plans



 Q: A business in my community refuses to pay for services performed by a nurse practitioner. The company's health plan is serviced through Health Smart. I have applied to and have received from Health Smart a provider number and I am listed on their provider panel. However, the business states that since they are governed by the Employee Retirement Income Security Act, they do not have to follow state insurance laws. Therefore, the company does not authorize reimbursement for services provided by NPs and are not required by law to do so. Is this correct?

A:  Yes, unfortunately this is correct. The Employee Retirement Income Security Act (ERISA) is a 1974 federal statute. It permits companies and unions to maintain benefit plans for their employees or members, and largely exempts those plans from conforming to state law.
The purpose of this ERISA preemption is twofold. In 1974, many states did not have adequate laws addressing the fiduciary responsibility of companies offering retirement plans. The preemption also allows multi-state companies to avoid a patchwork of state regulation and administer their benefit plans more uniformly and efficiently. Court rulings on ERISA clarify the preemption. Not all ERISA plans are exempt from state insurance and banking laws. However, self-funded ERISA benefit plans are exempt. Those plans in which the company and employee contributions pay the benefits provided under the plan are exempt from state banking and insurance laws, as long as the company’s primary business is not banking or insurance.
ERISA does not require a company to offer health insurance as one of its benefits. However, because of tax and recruiting advantages, many companies do so. Obviously, most companies do not know much about health care. Therefore, most companies contract with an insurance company or managed care organization to administer the health benefit plan. That is what happened in this case. The company pays Health Smart to administer its plan and those covered under the plan utilize Health Smart’s network of providers.
This creates two points at which a nurse practitioner, or any other health care provider, may have reimbursement problems. As in this case, the PPO or HMO must follow state law (HB 2846, Acts of the 75th Texas Legislature) and credential you to be a provider on the plan if your collaborating physician is already on the plan and requests that you also be credentialed. However, the self-funded company may establish coverage limitations such as limiting coverage to medical services provided only by physicians.
However, just because the company is technically correct does not mean you should not take any action in this matter. This is usually an education issue. You need to educate your patients that they should discuss the issue with their human resources department and find where to write to request a change in policy. NPs can also educate the human resources department. Companies’ decisions are usually based on economics. Many companies assume, by limiting reimbursement to physicians, they are saving money and ensuring their employees the best health care. NPs must counter this belief with the facts.
These are the facts. 1) NPs provide the same services provided by physicians. A company will not cover additional services just because their insurance plan includes services provided by NPs. The company will provide their employees greater choice at no additional cost. 2. Research shows the quality of NP services is at least equal to that of physicians, and often includes patient education that can lead to healthier employees, again, at no extra cost to the company. 3. NPs’ patients, as compared to the same type of patients seen by physicians, tend to have lower costs for laboratory tests, emergency room visits, hospitalizations and prescriptions. (Be sure to keep statistics in your own practice so you can show hard evidence of your economic advantage.) 4. Managed care companies in Texas should not charge higher credentialing fees for including NPs and other APNs as providers because PPOs and HMOs are already required to credential NPs under the Texas Insurance Code.
Obviously, it is most effective if you and your patients communicate directly with company decision-makers that negotiate benefit packages. Company employees should state clearly that they are asking for a change in the health benefit plan to cover NP services and why it is important for their family’s health. Companies do consider such requests because they have a vested interest in maintaining a qualified and satisfied workforce. Obviously, multiple requests from multiple sources have the greatest impact, so persistence pays. 
It is not always easy or cheap to resolve problems with self-funded ERISA plans, but it is important that all NPs address these problems in a direct and business-like fashion. So the next time a company says, “We don’t have to cover NPs because we are governed by ERISA.” you can say, “You are absolutely right, but let me tell you why your company should cover services provided by NPs.” 

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