The Phia Group – the legal counsel provider to BPA and many other organizations – is offering a new Plan Appointed Claim Evaluator (PACE) service that allows Plans to shift a portion of their fiduciary responsibilities away from themselves, thereby avoiding some legal and financial risks. This PACE service works by allowing The Phia Group to assume fiduciary duties relating to final post-service appeals of benefit denials, which helps the Plan avoid making binding determinations on final appeals. The service is available to all level-funded health plans.
Although a Plan can outsource all of its fiduciary responsibilities to another service, doing so wastes a good deal of the Plan’s money with unnecessary administration. By handling only final administrative appeals – often the riskiest fiduciary burdens – the PACE service is designed to provide only the assistance the Plan actually needs. Essentially, with PACE, level-funded groups can be given peace of mind without the high premium normally associated with it.
In addition, with the United States Department of Labor and state agencies beginning to crack down on how level-funded plans are administered, this service will add a much-needed additional level of protection. Since the PACE has no incentive whatsoever to deny claims, a Plan that chooses to outsource a final administrative appeal to the PACE demonstrates a commitment to objectivity, something of vital importance to claims processing and government oversight.
How PACE Works
Under this service, The Phia Group acts in a limited fiduciary capacity upon a claimant filing a final administrative appeal, with authority only to make determinations on final appeals, where and when it really matters. While the Plan Administrator remains responsible for coming to a decision on benefit determinations, the PACE will be there to relieve the stress of final appeals. The Plan and Plan Administrator can thus avoid making the difficult determinations, in response to final appeals, that have the potential to be scrutinized by an IRO (for non-grandfathered plans) or court of law (for either grandfathered or non-grandfathered plans).
The decisions and procedures followed are already present within the Plan Document, and the PACE is tasked with ensuring that the Plan is administered strictly in accordance with its terms. Thus, if a court or IRO determines that a decision to deny a claim was arbitrary (i.e., not based on the Plan Document), such that additional damages are owed, the PACE will be responsible for those additional expenses, not you.
Utilizing the PACE service from The Phia Group will provide you with another layer of protection and ease the burden of final appeals without adding undue costs. For more information on PACE, including how to sign up for this service, contact your BPA representative.