Eliott Dear on the Claims Assassins Intake Sort: Fully Insured vs. Self-Funded

Every claim that comes into Claims Assassins gets sorted at intake. That sort is the most important decision in the entire workflow, and it happens before anything else. Eliott Dear sorts each claim on one dimension: fully-insured or self-funded. The answer determines the venue, the benchmark, the enforcement mechanism, and the expected collection outcome. Getting the sort wrong costs the entire recovery.

Two Types of Plans

Every commercial health plan in the United States falls into one of two structural categories. Fully-insured plans are contracts between the employer and a commercial insurance carrier, where the carrier assumes the underwriting risk. Self-funded plans are where the employer assumes the underwriting risk directly and contracts with an insurance company only for administrative services.

That distinction, which sounds like a financial arrangement between an employer and a carrier, determines which legal regime applies to the plan. Fully-insured plans are regulated by the state Department of Insurance. Self-funded plans are regulated by the U.S. Department of Labor under ERISA.

Why It Changes Everything

The regulatory regime determines which surprise billing law applies. New York’s surprise billing framework, with FAIR Health 80th percentile benchmarks and DFS enforcement, applies to fully-insured plans covering New York residents. ERISA plans are not governed by state surprise billing law. They are governed by the federal No Surprises Act, which uses the QPA benchmark and CMS enforcement.

Eliott Dear files state IDR for fully-insured plans. He does not file federal IDR for ERISA plans. The state enforcement mechanism is structural and actually works. The federal enforcement mechanism is, at this point, not functional. If a claim is ERISA self-funded, the economics of federal IDR mean the filing is unlikely to produce a paid award, and Claims Assassins declines to file.

How Eliott Dear Classifies

Plan classification is not always visible on the EOB. Insurers do not print “fully-insured” or “self-funded” on the explanation of benefits. Eliott Dear uses a combination of signals: the patient’s employer name, the plan name, the member ID prefix pattern, the group number, the plan type code in the payer master data, and patient alerts inside the billing system that identify the funding structure.

The same carrier can administer both fully-insured and self-funded plans. The same carrier name on the EOB does not tell you what regime applies. Two claims from the same insurance company for the same CPT code can end up in entirely different venues based on which plan the patient is enrolled in.

The Point of Sorting

A non-par recovery service that does not sort at intake is going to file some percentage of its ERISA self-funded claims into state IDR, where the arbitrator will dismiss them for lack of jurisdiction. It is going to file some percentage of its fully-insured claims into federal IDR, where the collection math makes the filing economically irrational. Both errors cost the practice money.

Eliott Dear does the sort because doing it right is the entire reason the practice exists. The win rate and the collection rate at Claims Assassins are high because the routing is correct upstream, not because the filings are magical once they are submitted.