Archives April 2012

Court Dismisses Aetna’s Landmark “$99,750 Ear Wax Fraud” Lawsuit Against Out Of Network (OON) Hospital And Two Surgeons In Hospital’s Patient Discount Practice. Avym Corporation Offers Webinars To Examine Impact On Patient’s Right To Choose And New Wave Of Litigation By Payors.

On 04-13-2012, a Texas Court dismissed Aetna’s landmark “$99,750 Ear Wax Fraud” case against an out of network (OON) hospital and two surgeons, Aetna’s lawsuit alleged that the hospital charged $99,750 for ear wax removal.  Aetna was seeking temporary injunction to stop the hospital’s patient discount practice of not collecting full deductible and co-insurance from all patients. The Court dismissed the entire Aetna lawsuit after Aetna voluntarily filed a Notice of “Plaintiff’s non-suit without prejudice”. As a result of the dramatic court proceedings for the defendant hospital and two surgeons Avym announces new Webinars to examine this breaking development.

According to the Court document filed on 04-13-2012, Aetna “announced to the Court that they no longer wish to pursue any of the claims asserted by them against Defendants Ifeolumipo O. Sofola, M.D., Navin Subramanian, M.D. and Humble Surgical Hospital, LLC. This non-suit terminates the case upon filing”.

The Court Case info: AETNA HEALTH INC vs. SOFOLA, IFEOLUMIPO O (MD) (Case #: 2011-73949 / Court 152)

Avym Corporation offers webinars to examine the impact of this landmark 2012 healthcare case.  The core issue of these lawsuits is the patient’s rights to choose.  Recently there has been a wave of payor litigation nationwide over provider’s patient discount practice.  According to Govt. statistics more than 77% of insured Americans in the private sector pay for the right to receive care from out-of-network providers and facilities.  This Court decision, along with all other pending Aetna cases across the nation, is very important for the 77% of insured Americans in the private sector with out-of-network coverage.

On Dec 7, 2011, Aetna filed this lawsuit in the District Court, Harris County, Texas. Aetna lawsuit seeks for temporary injunction to stop the hospital’s patient discount practice and PPO surgeon’s OON referrals, alleging breach of contract, conspiracy to overcharge, tortious interference, and common law fraud, including “a bill for $99,750 for the removal of ear wax”.

On Feb. 02, 2012, Aetna filed a “$66,100 bunion surgery” lawsuit in California against seven California surgery centers, seeking to stop the alleged UCR billing without collecting full deductible and co-insurance from all patients. The court case info: Aetna Life Insurance Co. v. Bay Area Surgical Management LLC, File 02/02/2012, Case #: 112CV217943, The Superior Court of California, County of Santa Clara.

According to the Crain’s New York Business on Feb. 07, 2012, Aetna also quietly filed similar lawsuits last year in the State of New Jersey and New York against several out-of-network doctors for allegedly aggressive collections from out of network patients.(http://www.crainsnewyork.com/article/20120207/HEALTH_CARE/120209916)

According to a Bloomberg Businessweek article: “Harvard researchers say 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems—and 78% of those filers had insurance”.
(http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db2009064_666715.htm)

In addition, on March 7, 2012, NY State Governor Andrew M. Cuomo announced that the Department of Financial Services (DFS) is investigating unexpected out-of-network medical costs affecting New Yorkers across the state, many of whom cannot afford to pay out-of-pocket expenses. DFS released a report finding that insurance companies share the burden of responsibility with healthcare providers for unexpected out-of-pocket expenses driving so many patients into bankruptcy. “The report finds an overwhelming need for increased transparency from insurers and medical service providers, and improved consumer protection measures to ensure that New Yorkers stop receiving unexpected bills.” (http://www.dfs.ny.gov/about/press/pr1203071.htm)

According to the Press release on 03/07/2012 from NY State Governor Andrew M. Cuomo:

“Insurers are paying less of the cost of out-of-network care: The investigation found that insurers are moving to a system that greatly increases how much it costs consumers when they are treated out-of-network. To determine what they would pay for out-of-network care, most insurers used to use what is known as the usual and customary rate (UCR), which is supposed to be an average of actual bills for a procedure in that region. But now most are using the Medicare rate, which decreases how much insurers pay by as much as half or more in some cases. Insurers make this change hard for consumers to understand, because some are told they are going from 80% of the usual and customary rate to 140% of Medicare, which sounds like an improvement, but is not.”

Avym Corporation Webinars will cover Aetna’s legal arguments of fraud allegations and compliant patient discount practices.  Avym will also discuss out of network referral practices in relation to patient’s ability to exercise informed choices.

To find out more about PPACA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.

“The U.S. Department of Justice has announced Tampa, Fla.-based WellCare Health Plan will pay $137.5 million to the federal government and nine states to settle four lawsuits alleging the payor violated the False Claims Act.

The suits claim WellCare committed a number of schemes to submit false claims to Medicare and Medicaid programs. Allegations include WellCare inflating the amount it claimed to spend on medical care, knowingly retaining overpayments it received from Florida Medicaid for infant care and falsifying data to misrepresent patient conditions and treatments.

The $137.5 million settlement will be divided among the federal government and nine states: Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio. Sean Hellein, a financial analyst formerly employed by WellCare whose qui tam complaint initiated the federal investigation, will receive approximately $20.75 million.

Recently, in a separate ongoing case:

United States District Court of New Jersey denied UnitedHealth’s (UHC) motion, in its entirety as to all claims, to dismiss the providers’ ERISA class action alleging that UHC’s wrongful overpayment recoupment is in violation of federal law.  The insurance practice of overpayment recoupment has been and is becoming a larger legal and financial challenge for health plans, healthcare providers and patients to overcome. Almost all health care providers have been affected by an overpayment dispute over the past few years and according to industry estimates, more than 50% of the $2.6 trillion in annual US healthcare expenditure is subject to overpayment dispute.

What does this mean to overpayment request by payors?

In accordance with recent developments, Avym Announces 2012 Free Webinars And Plan Assets Recovery Programs To Assist Self-Insured Health Plans Recover Hundreds Of Millions Of Dollars In Plan Assets From Successful TPA’s Overpayment Recovery.  More Than 60% Of TPA Recovered Money Originated From Self-Insured Plans And Should Be Returned To Self-Insured Health Plans Under New DOL Contributory Plans Criminal Project.

On March 30, 2012, Federal Court Denied UnitedHealth’s (UHC) Motion, In Its Entirety As To All Claims, To Dismiss Providers’ ERISA Class Action, Alleging UHC’s Wrongful Overpayment Recoupment In Violation Of ERISA. Avym Offers Webinars To Examine The Legal Impact Of This Decision for All Payers and Providers.

On March 30, 2012, United States District Court of New Jersey denied UnitedHealth’s (UHC) motion, in its entirety as to all claims, to dismiss the providers’ ERISA class action alleging that UHC’s wrongful overpayment recoupment is in violation of federal law, ERISA. Avym now offers executive webinars to examine the profound legal impact for all providers and payers.

The Court case info: Premier Health Center, PC, et al. v. Unitedhealth Group, et al., Case #: 2:11-cv-00425, United States District Court District of New Jersey, Filed 03/30/12.

The insurance practice of overpayment recoupment has been and is becoming a larger legal and financial challenge for health plans, healthcare providers and patients to overcome. Almost all health care providers have been affected by an overpayment dispute over the past few years and according to industry estimates, more than 50% of the $2.6 trillion in annual US healthcare expenditure is subject to overpayment dispute.  Additionally, more than 10% of any previous and future reimbursements are subject to overpayment recoupment by the payers in both private and public sectors.

According to the Court document, the healthcare provider and their association plaintiffs are challenging defendants’ practices of improperly recouping previously paid health care benefits from providers without complying with procedural protections under ERISA, “Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment.” The Defendants seek dismissal of Plaintiffs’ Amended Complaint for lack of standing to sue and for having failed to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). The Court “ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims”, but granted defendants’ motions to dismiss claims, without prejudice, against two subsidiary companies of UHC.

The case factual background was described in the Court document:

“After performing its services, pursuant to the assignment of benefits form, Premier submits a claim to United who will then make payment to Premier on the claim. Occasionally, United will engage in post-payment audits of benefit payments. Following the post-payment audit process, United determined that they had erroneously made overpayments to the Plaintiffs and demanded repayment. Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment”.

From the court document: “Plaintiffs further allege that many of the United Plans at issue are governed by ERISA, “which establishes strict rules and procedures that United or other entities that administer ERISA plans must comply with.” Furthermore, “ERISA sets forth specific steps that must be followed when an insurer such as United makes an ‘adverse benefit determination’ by denying or reducing benefits, including by providing a ‘full and fair review’ of the decision.” “By making a retroactive determination that a previously paid benefit was, in fact, paid improperly, an insurer makes an adverse benefit determination under ERISA.” Plaintiff avers that “United has violated ERISA by making its retroactive adverse benefit determinations without complying with ERISA[’s] requirements.”

On January 24, 2011, Plaintiffs filed a complaint in the United States District Court for the District of New Jersey.  On April 22, 2011, YF Corporation’s ambulatory surgical center (ASC) client, Beverly Hills Surgical Center (BHSC), as a Named Class Plaintiff, filed a class-action in federal court against UnitedHealth Group for alleged ERISA violations through its abusive overpayment recoupment practice.  With assistance from YF Corporation, BHSC, which represents all ambulatory surgical center facilities, is the first ASC facility provider in the nation to combat abusive overpayment recoupment practices by filing an ERISA class action against UnitedHealth Group, the largest health insurer in America.

“On April 22, 2011, Plaintiffs filed an Amended Complaint, which is the subject of Defendants’ United and Health Net motions to dismiss. The parties have submitted their respective briefs and the Defendants’ motions are now ripe for this Court’s adjudication.”

The Court denied the Motion to Dismiss filed by United in its entirety, including denying UHC’s anti-assignment argument and upholding the standing of all providers’ national and state association plaintiffs: “In light of the above, the Court finds that based upon Defendants’ course of conduct with Plaintiffs, Defendants have waived any right to enforce the anti-assignment provision. Therefore, Plaintiffs have met their burden to establish standing to sue under ERISA.”

“Accordingly, the Court finds that the Associations have standing to bring ERISA claims on behalf of their individual members.”

“ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims.”

If the Court denied each and every legal argument by UHC in this class action for overpayment recoupment, what does this mean to every overpayment request by every payer?

To find out more about PPACA/ERISA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.