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The Myth Behind Medical Necessity Denials

Lea Fowler

Manager, ERISA Recovery

Titan Health Management Solutions

Learn more about our ERISA Recovery Solutions here

Did you know that if you are receiving denials for medical necessity on commercial/ERISA (employer sponsored) plans that it may not be all your fault? Many providers think medical necessity denials are a result of poor medical record keeping when in reality, the payers and in some cases plan administrators do not follow the rules laid out in ERISA that constitute a valid medical review.

Under ERISA, when a denial/adverse benefit determination is issued that involved medical necessity or experimental/investigational reasons there are specific rules that must be followed by the payer for a valid medical review. Failure by the payer and/or plan administrator at the employer to follow these rules constitutes a violation of ERISA full and fair review requirements (h).


Upon request by the appellant the payer or plan administrator (self-funded plans) must supply the appellant with a physical document which is based on the applicable sections of the plan and outlines the basis for the denial/adverse benefit determination and the reviewer’s credentials including name and medical licensure in the same specialty as the specialty involved in the denial reason. Also, the reviewer cannot be an employee of or affiliated with the original reviewer that determined the original denial.


The following is an example I personally resolved involving an inappropriate denial for medical necessity:

The patient coded twice in the ambulance on the way to the hospital. The patient subsequently had a pacemaker implanted. The insurance company denied the medical necessity of the procedure stating the pacemaker was a “temporary” treatment and the patient could have received services from an after hours clinic, the ER was not necessary. The initial denial was appealed using ERISA. The first response from the payer was that the initial decision was upheld and signed by an anonymous OB/GYN RN. The only information in the signature line was that they were an OB/GYN RN, no name, no credentials and no physical medical review citing the applicable sections of the plan justifying their decision.

The second ERISA appeal pointed out the fact that an OB/GYN was not qualified under ERISA to conduct a review because they were not a board-certified and licensed physician in cardiology. The appeal also pointed out no medical review document signed and dated by the reviewer was received. The lack of credentials of the reviewer was also cited.

After the second appeal was filed with the payer and plan administrator listing the ERISA discrepancies the original decision was overturned and the claim paid in accordance with the contract. This is a prime example of noncompliance by the payer and plan administrator to follow ERISA rules.

To learn more about ERISA, join our Webinar on April 19th hosted by HFMA. FREE for HFMA Members!

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