Archives May 2014

BCBS IBC Ordered To Permanently Reform Its Overpayment Policies In Provider Class Action

In what is being seen as provider’s class action victory in the insurer-provider overpayment battle, an Illinois federal judge finalized a permanent injunction requiring BCBS Independence Blue Cross (IBC) to permanently reform its overpayment policies.  BCBS IBC is permanently restrained and enjoined from issuing or pursuing any demand for repayment, or offsetting any new claims unless IBC complies with ERISA.

This permanent injunction in federal class action court establishes the first complete set of case laws for overpayment recoupment and offsetting denials, the number one health claims denial in the country and is a huge victory not only for Pennsylvania Chiropractic Association (PCA) members but also for every patient and provider in the country.

This court case provides final and absolute clarity to the “legal gray area” of overpayment recoupment practices engaged in by many of the nation’s biggest insurance carriers.  The court has effectively answered the central question of whether insured’s overpayment demands trigger ERISA appeal rights with a resounding yes as insurers and Health Plans will be forced to comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar. Providers or patients that face BCBS or any payor recoupments or offsets would do well to understand the implications of this court ruling as well as their rights under ERISA.

In this landmark decision against a BCBS entity, Independence Blue Cross (IBC), “After a bench trial on December 2, 3, and 4, 2013, the Court found in favor of the Pennsylvania Chiropractic Association (PCA) on its ERISA claims against Independence Blue Cross (IBC). See Pa. Chiropractic Ass’n v. Blue Cross Blue Shield Ass’n, No. 09 C 5619, 2014 WL 1276585 (N.D. Ill. Mar. 28, 2014). The Court also concluded that PCA is entitled to an appropriate permanent injunction and directed the parties to brief “the question of the precise contours the injunction should take.” Id. at *18. PCA has now submitted a proposed permanent injunction, which requires IBC to provide ERISA-compliant notice and appeal when demanding that a health care provider repay previously issued health insurance benefits. For the reasons stated below, the Court approves PCA’s proposed injunction in part.” according to court document.

The injunction entered by U.S. District Judge Matthew F. Kennelly, forces IBC to comply with a “full and fair review” process, as established by ERISA, when denying any medical claims.  Although this specific injunction only covers members of the Pennsylvania Chiropractic Association (PCA), it can be used as a “roadmap” for all providers and patients when dealing with overpayment requests or offsets.

If a provider or patient receives any requests for overpayments, the provider or patient has the right to request an appeal of the decision BEFORE any monies are recouped or offset.  Also, the insurer must clearly explain why the money is being requested.  The insurer must also detail the specific plan provision that it used in making its determination.  Additionally, the insurer must let the provider or patient know exactly what material or documentation is needed to avoid repayment.  Finally, the insurer must notify the provider or patient of appeal and litigation rights.

If the insurer continues with the recoupment demands, once the provider or patient appeals, the insurer must allow extra time for the appeal, provide a new reviewer of the claim (cannot be reviewed again by the same person), provide, free of charge, access to any relevant material that was used in the decision process such as documents, formulas or methodologies.

Case Info: Pennsylvania Chiropractic Association, et al. vs Blue Cross Blue Shield Association, et al., Case: 1:09-cv-05619 Document #: 919 Filed: 05/19/14, in the United States District Court for the Northern District of Illinois Eastern Division

Lost in all the excitement is the fact that the new healthcare reform regulations have adopted ERISA Claims regulations in their entirety.  This means that these rules should apply across all health plans with very few exceptions.  “(i) Minimum internal claims and appeals standards. A group health plan and a health insurance issuer offering group health insurance coverage must comply with all the requirements applicable to group health plans under 29 CFR 2560.503–1 …. with respect to health insurance coverage offered in connection with a group health plan, the group health insurance issuer is subject to the requirements in 29 CFR 2560.503–1 to the same extent as the group health plan.” according to PPACA regulations for Internal Claims and Appeals and External Review. http://webapps.dol.gov/FederalRegister/PdfDisplay.aspx?DocId=24056

Avym Corporation offers new basic and comprehensive ERISA and PPACA overpayment appeals and litigation support programs, for all hospitals, providers and healthcare attorneys.

1. Get A Copy Of The Full Health Plan– The complete Plan usually will not be a SBC, SPD (benefit summary) or a print-out from a website. It will be, on average, at least 25-50 pages long. The insurance company or claims administrator will likely not have a copy of the full Health Plan. You can request a copy of the full Health Plan from your Human Resources department.  By law, they are required to give you a copy if requested. A customer service representative for a health insurance company or claims administrator may be able to verify to you what your benefits are over the telephone.  Unfortunately, you cannot rely on what a representative tells you over the phone.
2. Once You Get A Copy Of Your Full Plan-Read It!– The Plan document controls the benefits available, regardless of what anybody tells you over the phone. This document should contain all coverage levels, claims review procedures, policy exclusions, restrictions etc.. for any and all benefits of the Health Plan.  Read it.
3. Also Look At The Insurer’s Own Guidelines– Despite the fact that the Health Plan should include all terms of coverage, many times the insurer or claims administrator will apply their own criteria or guidelines to claims decisions. You can find many criteria or guidelines for claims administrators such as BCBS, UHC, Cigna, and Aetna on the internet.
4. Find Out If Your Health Plan Is Fully Insured Or Self-Insured– Many times ERISA law preempts State Department of Insurance Laws.   Frequently, plans that are funded by an employer must be in compliance with federal ERISA law. Large employers such as Bank of America, and Union Plans, are usually self-insured Plans.
5. Find Out Who The Plan Administrator Is– Look for a name and address of the Plan Administrator in the Health Plan. If your claim has been denied, send a written request to the Plan Administrator requesting a full and fair review of the denial as well as all plan documents. The Plan Administrator is required to provide the plan documents to you within 30 days. Federal regulations allow you to file a lawsuit to seek penalties from the Plan Administrator in the amount of $110 per day for each day the plan documents are not provided.
6. Find Out Who Has “Discretionary Authority” To Decide Your Claim– Discretionary Authority usually means that an entity, with “discretion” (claims administrator or insurer), has permission to make decisions about your claims.   An example of discretion in a Plan may be: “Aetna has discretionary authority to determine benefit eligibility and construe the terms of the Plan.” If an entity that has “discretion” is also the entity that pays the claim, then the entity may have a conflict of interest.
7. Understand the Claims Procedures Of Your Plan– You should be aware of how much time you have to submit a claim and to whom and where you have to submit the Claim.  You should also know the Appeals and Grievance procedures of your Plan.  If your claim is denied, read the appeals or grievance section to determine your appeal rights and deadlines. Generally, the first appeal must be submitted within 180 days of the denial pursuant to ERISA. However, a second level appeal can be a much shorter time period, as little as 30 or 45 days!  This link provides a good overview of ERISA claims procedures and rules: http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html
8. Know The Statute Of Limitations In Your Health Plan– The statute of limitations usually refers to the amount time you have to file a lawsuit to obtain denied benefits. In order to file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two).  This is also known as exhausting your administrative remedy. The statute of limitations may appear in a section titled “Legal Action.”
9. Know Your Out-Of-Pocket Costs– Annual deductibles, co-pays, and co-insurance can be quite confusing and many times they are applied incorrectly.  Keep track of how much of your own money you are spending.  Read the Explanation of Benefits (EOBs) that the claims administrators or insurers send you.  Compare and calculate the EOBs with your own calculations to ensure your claims are paid in full.
10. Above All Else, Always Remember To Keep It Simple– If all this seems overwhelming, remember, the law requires the Health Plan to act in YOUR BEST INTEREST.  The laws are clear: “The primary responsibility of the Health Plan is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers, or the plan sponsor”.  http://www.dol.gov/dol/topic/health-plans/fiduciaryresp.htm

On April 7, 2014 and April 28, 2014, the Obama administration’s Department of Labor (DOL), argued in the 9th and 5th Circuit Courts, on behalf of out-of-network providers and patients against health plans, on whether providers must balance bill patients before billing health plans.

On April 7, 2014 and April 28, 2014, the Department of Labor (DOL), argued in the 9th and 5th Circuit Courts, advocating for out-of-network providers and patient’s rights against health plans, on whether providers must first balance bill patients before billing health plans. All out of network providers and patients should understand the court impacts of the DOL amicus briefs and oral arguments.  Approximately 76% of Americans insured through their employer-sponsored health plans have paid for out-of-network coverage, according to the December 2013 National Composition Summary from DOL Bureau of Labor Statistics.

In arguing for out-of-network patients’ right to timely, vital healthcare and against having to pay full deductibles and coinsurance upfront, the DOL effectively argued against the current out-of-network claim denial practice by United and CIGNA:

“Thousands of healthcare claims are made in this country every day, and some are litigated, and yet no circuit court has ruled that providers must first bill their patients before they may enforce legitimately assigned benefits claims. …. Limiting physicians’ first recourse to their patients will have chilling effects both on providers and plan participants. Participants may forgo or delay vital healthcare because they cannot finance or they cannot pay for their care, and providers may limit their care to those participants whose health plans have previously paid properly signed healthcare claims or participants who are able to first to pay for the care, or the provider can recognize as creditworthy. Affirmance of the district court ruling can only benefit conflicted administrators, such as United, that both fund and administrator ERISA plans, by allowing them to forestall payments for substantially expensive medical care or maybe avoid that payment altogether”, according to the court audio records.

Avym Corporation closely monitors and demystifies the latest federal court developments for all out-of-network patient advocates and claims specialists, with new ERISA and PPACA reimbursement compliance seminars.

“The court rulings from both 9^th and 5^th Courts of Appeals will have a profound impact on the approximately 76% of Americans insured through employer-sponsored health plans, as they have paid for out-of-network coverage but may not be able to pay upfront for their full deductible and coinsurance before seeking timely, vital healthcare,” says Mark Flores, Vice President/Co-Founder of Avym Corporation and a national expert on ERISA and PPACA compliance appeals.

Case Info: Spinedex Physical Therapy USA, et al v. United Healthcare of Arizona, et al, Case No. 12-17604, in the United States Court of Appeals for the Ninth Circuit, on April 7, 2014.  Oral argument recording: http://cdn.ca9.uscourts.gov/datastore/media/2014/04/07/12-17604.wma

Spindex Physical Therapy USA, Inc. Amicus Brief, in support of plaintiffs-appellants and requesting reversal: http://www.dol.gov/sol/media/briefs/spindex(A)-06-05-2013.htm

Case Info: North Cypress Medical Center, et alv. Cigna Health, Case No. 12-20695, in the United States Court of Appeals for the Fifth Circuit, on April 28, 2014.  Oral argument recording: https://www.ca5.uscourts.gov/OralArgRecordings/12/12-20695_4-28-2014.wma

North Cypress Medical Center Operating Co. Amicus Brief, in support of plaintiffs-appellants, and requesting reversal: http://www.dol.gov/sol/media/briefs/north-cypress(A)-10-30-2013.htm

Among other things, the DOL added, “Assignee physicians with validly assigned benefits claims have standing to pursue those claims regardless of whether or not if they first billed their patients,” argued Marcia Elizabeth Bove, DOL attorney for the Secretary of Labor, according to the court audio records.

“By listening to the arguments from both sides of the healthcare matrix, out-of-network providers and patients may have much better understanding on the vital difference between patients, providers and health care plans. The federal Courts of Appeals are expected to make these landmark decisions in the next a few months for the market lifespan of the out-of-network and managed care business model,” says Dr. Jin Zhou, president of ERISAclaim.com, a national expert on ERISA and PPACA compliance appeals.

December 2013 National Composition Summary from DOL Bureau of Labor Statistics:

http://stats.bls.gov/ncs/ebs/detailedprovisions/2012/ownership/private/table02a.pdf