Self-insured health plans should seek to recover significant share from the billions of dollars in successful TPA’s anti-fraud recoveries according to recent federal court orders and public records from health insurance industry anti-fraud strategies.
Despite the fact the U.S. Healthcare Insurance industry is moving to re-classify premium dollars spent on anti-fraud expenses as medical care under PPACA MLR laws, any successful anti-fraud recoveries on behalf of self-insured plans nevertheless remain ERISA plan assets and must be disclosed and returned to the self-insured plans.
Industry anti-fraud recovery reports and federal court documents reveal successful antifraud recoveries are estimated to be in the billions of dollars. Approximately 82.5% of large health plans are self-insured per DOL statistics. Recent federal court rulings have confirmed that TPAs are prohibited under ERISA from concealing and retaining any hidden fees on behalf of the self-insured plan. In addition to hidden fees any overpayment recoupments made from providers on behalf of self-insured plans are likewise plan assets and should be disclosed and returned to the self-insured plan.
On July 29, 2013, a federal court in Detroit, Michigan ordered a TPA to pay back a self-insured plan “$5,111,431, together with $914,241 in pre-judgment interest, and costs, post-judgment interest, and attorney fees”, after the court found the TPA engaged in ERISA prohibited transactions in violation of ERISA fiduciary duties, by concealment, fraudulent conducts and failing to return “hidden fees” or “PPO saving”. The court documents further reveal the critical challenge in identifying “hidden fees”, especially in this case where, in spite of a “financially savvy” CFO, the TPA changed contract terminology numerous times. Court Case Info: Hi-Lex Controls Inc v. Blue Cross and Blue Shield of Michigan, case #: 2:11-cv-12557-VAR-PJK, filed on 05/23/13 and 07/29/13, United States District Court Eastern District of Michigan.
Auditors, executives and fiduciaries of large self-insured health plans should look to educate themselves on the nuances of this national epidemic. Hidden fees, anti-fraud overpayment recoveries or any other prohibited transactions with plan assets should be identified and returned to the plan.
Responsible parties must look to create clear policies and courses of action to ensure plan asset recovery practices. “Monitoring a service provider” and safeguarding plan assets are essential fiduciary duties according to the DOL Fiduciary Guidance: “Understanding Your Fiduciary Responsibilities Under A Group Health Plan”- http://www.dol.gov/ebsa/pdf/ghpfiduciaryresponsibilities.pdf. Self-insured health plans that have changed service providers over the last two years should be particularly diligent in auditing for any of these prohibited transactions and should look for disclosures and their fair share of TPA’s successful anti-fraud recoveries.
In response to the immediate need for action Avym Corporation has created a series of seminars designed to assist self-insured plans identify and recover potential plan assets. The seminars will review and examine the following issues:
To find out more about Self Insured Plan Tools and Services from AVYM please click here