PLEASE WRITE A 400 WORD PAPER AS A REBUTTAL TO THE BELOW DISCUSSION BOARD POST. APA FORMAT
1. What is the correct administrative law legal procedure for fighting insurance claims denials? What is the source of those rules? (Do not just list what some health plan has for rules. This must come from a source of law). What sort of cause of action might a patient pursue?
The correct administrative law legal procedure to fight insurance claim denials is first through an internal appeals process through which the patient requests that the insurer reconsider its decision (Espinosa, 2012). Should the insurer uphold their first decision, patients can go through an external appeal, during which a third party reviews the denial (Espinosa, 2012). It is best if these appeals are done in writing, but oral communication may be acceptable in urgent situations (Internal Claims and Appeals and the External Review Process Overview, 2022).
45 CFR 147.136 discusses internal claims and appeals and external review processes (Internal Claims and Appeals and External Review Processes, 2010). Internal appeals are usually done through the plan or insurer, whereas external appeals are conducted through an Independent Review Organization (IRO) (Internal Claims and Appeals and the External Review Process Overview, 2022). The external review process is handled at a state level in states with an applicable state review process that parallels the federal standards (Internal Claims and Appeals and the External Review Process Overview, 2022). Federal external reviews can be conducted via a Health and Human Services (HHS) administered process or through an accredited IRO process (Internal Claims and Appeals and the External Review Process Overview, 2022).
The source of these rules is the Administrative Procedure Act of 1946 which is codified in 5 U.S.C. §§ 551–559. This federal act “governs the procedures of administrative law” and addresses the “process for formulating, amending, and repealing a rule” (Administrative Procedure Act, n.d.). The Administrative Procedure Act essentially sets the standard for how administrative law procedures are created and how they are to be carried out.
A patient may pursue a breach of contract cause of action should the appeals process fail (Institute of Medicine (US) Committee on Utilization Management by Third Parties, 1989). Insurance often serves as a contract between the patient and a third-party payer where the third-party paper agrees to pay for medically necessary services; should the review process result in nonpayment, the patient may argue this is a breach of contract (Institute of Medicine (US) Committee on Utilization Management by Third Parties, 1989).
2. What laws regulate the jurisdictional bounds of insurance regulation?
15 U.S.C. § 6701, commonly referred to as the McCarran-Ferguson Act of 1945, is one law that regulates the jurisdictional bounds of insurance regulation. The McCarran-Ferguson Act is a federal act that entrusts states with the regulation of the business of insurance (Furrow et al., 2015). The McCarran-Ferguson Act was put into place under the ideal that state regulation and taxation of the insurance industry was in “the public interest” in order to encourage competition (Weller, 1978).
Though the law of current still assigns the responsibility of insurance regulation to the states, many federal mandates affect such regulation. One example is The Employee Retirement Income Security Act (ERISA) which “preserves state regulation of insurance, but it preempts state regulation of self-insured employer plans and of state claims and remedies against insurers” (Furrow et al., 2015). The Affordable Care Act is another example of a federal mandate that affects health insurance at a state level in many ways, one way being by expanding eligibility for Medicaid coverage (McIntyre & Song, 2019).
3. What issues present here, and what aspects of this case would be state based, and which might be federal? Research this carefully. Find relevant regulations, enumerate the elements, and apply the facts carefully to each element of law in this case, element by element.
This scenario presents several issues regarding the illegal conduct of the PA. Due to the prohibitive cost of obtaining Botox from an approved distributor, PA Jones decided to purchase vials from an unauthorized vendor, “somewhere overseas,” with the shipping manifest indicating “home goods.” 18 U.S.C. § 542 discusses the entry of goods through false statements (1955). 18 U.S.C. § 542 states:
Whoever enters or introduces, or attempts to enter or introduce, into the commerce of the United States any imported merchandise by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice or appliance, or makes any false statement in any declaration without reasonable cause to believe the truth of such statement, or procures the making of any such false statement as to any matter material thereto without reasonable cause to believe the truth of such statement, whether or not the United States shall or may be deprived of any lawful duties; or
Whoever is guilty of any willful act or omission whereby the United States shall or may be deprived of any lawful duties accruing upon merchandise embraced or referred to in such invoice, declaration, affidavit, letter, paper, or statement, or affected by such act or omission-
Shall be fined for each offense under this title or imprisoned not more than two years, or both.
The elements of 18 U.S.C. § 542 are as follows:
Element 1: This law applies to anyone who enters or introduces, or attempts to enter or introduce imported merchandise into the commerce of the United States.
PA Jones conspired with the unauthorized distributor to get vials of Botox at a favorable price from “somewhere overseas.” Thus, this element is met.
Element 2: How imported merchandise was attempted or introduced was via fraudulent or false invoice, declaration, affidavit, letter, paper, or through any false statement, written or verbal.
The scenario notes that the vials have a foreign NDC number and the shipping manifest indicated “home goods.” This is a false statement and thus this element is met.
Element 3: OR by means of any false or fraudulent practice
This element includes the disjunctive “or;” because the above elements were met, this element doesn’t need to be met to violate this law.
Element 4: OR makes any false statement in any declaration without reasonable cause to believe the truth of such statement
This element also includes the disjunctive “or;” because the above elements were met, this element doesn’t need to be met to violate this law. However, noting that the PA and this unauthorized distributor were conspiring to get this Botox to the PA at a lower price, this package purposefully stated it was “home goods.” This is a false statement declared without reasonable cause to believe the truth of such a statement.
Element 5: OR uses a false statement as a means to mislead without reasonable cause to believe the truth of such a statement.
This element also includes the disjunctive “or;” because the above elements were met, this element doesn’t need to be met to violate this law.
Element 6: The above elements apply whether or not the United States shall or may be deprived of any monetary amount.
The scenario does not provide whether the sending of the vials via “home goods” deprived the United States of any monetary amount, but that is irrelevant according to this element.
The next law discussed will consider the conduct of PA Jones regarding the submission of claims to insurance with false indications for the Botox injections (stating it was for migraines when it was used for back injections) and inaccurate NDC numbers.
The False Claims Act, 31 U.S.C. § 3729, “imposes civil liability on persons who knowingly submit a false or fraudulent claim or engage in various types of misconduct involving federal government money or property” (Trousdale, 2012).
The elements of the False Claims Act are as follows:
Element 1: A false claim was made.
PA Jones submitted a bill to the insurance company for Botox scalp injections for migraines, although the patients did not have a history of intractable migraines. Further, he did not inject Botox into the scalps; he injected it into their backs. Additionally, he included false NDC numbers. This constitutes a false claim and thus, this element is met.
Element 2: The false claim was made with the knowledge that it was false.
PA Jones injected Botox into the patients’ backs, not their scalps. This action shows that he had knowledge this claim was false. Additionally, he had made requests to the patients’ insurance companies prior and was denied. Instead of going through the appeals process correctly, he made a false claim with the knowledge it was false.
Element 3: The false claim is material to getting payment.
Material means “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property” (Legal Information Institute, 2020). This means the conduct had the intent to defraud.
PA Jones knew that the insurance company had denied his original requests for “investigational treatment.” He submitted under the indication for intractable migraines, which was a false claim, material to getting payment.
Element 4: The false claim caused the government to pay out money.
The scenario notes that the claims went through, but it does not specify whether these insurance plans were funded by the government. Assuming their insurance was Medicare, then these false claims caused the government to pay out money.
45 CFR § 147.136 –Internal claims and appeals and external review processes. (2010). LII / Legal Information Institute. https://www.law.cornell.edu/cfr/text/45/147.136
Administrative Procedure Act. (n.d.). LII / Legal Information Institute. https://www.law.cornell.edu/wex/administrative_procedure_act
Committee on Understanding the Global Public Health Implications of Substandard, Falsified, and Counterfeit Medical Products, Board on Global Health, & Institute of Medicine. (2013). Countering the Problem of Falsified and Substandard Drugs (G. J. Buckley & L. O. Gostin, Eds.). National Academies Press (US). http://www.ncbi.nlm.nih.gov/books/NBK202530/
Entry of goods by means of false statements, 18 U.S.C. § 542 (1955). https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section542&num=0&edition=prelim