Archives July 2014

On June 23, 2014, UnitedHealthcare was sued in a new provider class-action for its overpayment recoupment and offset practice, alleging ERISA violations and fraud. The new suit also alleges UHC engaged in withholding or offsetting new payments from providers while misinforming patients.

Overpayment offset and recoupments are Healthcare provider’s No. 1 denial; correspondingly, for self-insured health plans, the No. 1 hidden cost is overpayment recoupment and possible plan assets embezzlement. On June 23, 2014, UnitedHealthcare (UHC) was sued in a new provider class-action for its overpayment recoupment and offset practice for alleged ERISA violations and fiduciary fraud. The new ERISA class-action suit alleges:

• UHC has been withholding or offsetting new payments in part or in whole from providers from one patient to satisfy another alleged overpayment in the past from other unidentified patients in violation of ERISA;
• UHC then misleads patients and the plan sponsors as to payments made to the providers;
• UHC has never complied with ERISA claims regulation when requesting alleged overpayments and offsetting new payments from other patients.

The new putative class on behalf of all similarly situated providers is seeking for ERISA benefits payments due, injunctive and declaratory relief, and ERISA notice and appeal rights.

“The No. 1 health care claim denial in the nation is payer overpayment recoupment and offset practice that does not comply with ERISA rules.  These offsets can go as far back as several years and affect all types of claims, potentially resulting in inevitable provider bankruptcy and subsequent patient bankruptcy”, according to Dr. Jin Zhou, president of ERISAclaim.com, a national expert on ERISA compliance and appeals.

The court case info: Peterson, D. C, et al v. UnitedHealth Group. et al, U.S. District Court U.S. District of Minnesota (DMN), Civil Docket For Case #: 0:14-cv-02101-PAM-SER, Filed 06/23/14.

Significantly, this ERISA putative provider class-action for the “Offset Class” was filed in the wake of and in accordance with a similar provider class-action filed recently in New Jersey for the “Recoupment Class”: Case Info: Premier Health Center, P.C., et al. v. UnitedHealth Group, et al., Case#: 2:11-cv-00425-ES-SCM, Filed 08/01/13, United States District Court for The District of New Jersey.

In last year’s court decision the court ruled against UHC in its overpayment recoupment practice:  “To be sure, as previously discussed, United’s recoupment procedures violate three specific ERISA regulations across the class.” according to the court document. “In 2011, United recovered approximately $430 million in overpayments to providers. 58% of the $430 million was recovered as a result of providers’ voluntarily sending a check to United, while 42% was recovered through offsets”, according to the court document. “However, they all violate ERISA in three respects. First, they fail to provide “[a] description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring acivil action under section 502(a) of [ERISA] following an adverse benefit determination on review.” 29 C.F.R. § 2650.503-1(g)(1)(iv).25 Second, they fail to indicate that the provider, “upon request and free of charge, [will have] reasonable access to, and copies of, all documents, records, and other information relevant to the” overpayment determination. 29 C.F.R. §2650.503-1(h)(2)(ii). Third, they fail to “[p]rovide claimants at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination.” 29 C.F.R. § 2650.503-1(h)(3)(i).” according to the court document.

In the new UHC provider class-action, healthcare providers alleged additional ERISA violations by UnitedHhealthcare Group for withholding and offsetting newly adjudicated claim payments from one patient to satisfy another alleged overpayment in the past from other unidentified patients which in some cases are members of a completely separate plan, in violation of ERISA.

Additionally, the new lawsuit alleges that UHC misled patients and the plan sponsors on patient EOB’s that indicated “payment made to provider”, when in truth and in fact no such payment was ever made to the providers, according to the Court Complaint.

In particular, the plaintiff Lutz Surgical Partners alleged the following:

“For example, ……Instead, United identified a different United Insured covered by a different United Plan who had been treated by Lutz on December 16, 2012. According to the PEOB, United caused that United Plan to pay Lutz $19,460.00 for this treatment which was now characterized by United as the “ORIGINAL OVERPAYMENT AMOUNT.” The PEOB then explained that the entire amount owed to Lutz for the services provided to the June 12, 2013 patient ($2,700.00) was being unilaterally offset against the prior alleged overpayment relating to the December 16, 2012 patient ($19,460.00), with the added explanation that “THIS REPRESENTS PREVIOUS BENEFITS THAT WERE PAID IN ERROR.” United therefore reported that the “TOTAL PAID TO THE PROVIDER” for services rendered to the June 12, 2013 patient was $0.00. In the “REMARKS” section of the PEOB, United stated: “The amount payable for this Explanation of Benefits has been used to reduce an overpayment made on the given claim(s). Please adjust your patient account balance accordingly.” according to the court document.

As more and more of these cases make their way through the courts, it is clear that the questionable or “legal gray area” of overpayment recoupment practices engaged in by many of the nation’s biggest insurance carriers, effectively triggers ERISA appeal rights.  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 UHC or any payor recoupments or offsets would do well to understand the implications of these lawsuits as well as their rights under ERISA.

For more information click here.

Overpayment offset and recoupments are Healthcare provider’s No. 1 denial; correspondingly, for self-insured health plans, the No. 1 hidden cost is overpayment recoupment and possible plan assets embezzlement.

On May 14, 2014, a federal appeals court upheld a district court’s $6.1 million award for a self-insured ERISA plan against Blue Cross and Blue Shield of Michigan (BCBSM) for violating ERISA’s rules regarding prohibited transactions and fiduciary fraud.  The federal courts agreed that federal ERISA law prohibits BCBSM’s TPA self-dealing as an ERISA fiduciary by withholding all hidden fees or overpayment recovery, despite a prior state court decision upholding the enforceability of BCBSM’s TPA/ASO agreement.  This unprecedented decision will have tremendous repercussions for all self-insured health plan TPAs, as well as the Self-Insured Plans that employ them, in all overpayment recoupment actions.

In the first ruling of its kind, on behalf of all self-insured health plans, the federal courts ruled:

1. ERISA prohibits BCBSM TPA self-dealing by retaining or withholding from plan assets regardless of BCBSM TPA/ASO agreement;
2. ERISA prohibits BCBSM TPA fraudulent concealing or misrepresenting the plan claim hidden fees and TPA recoveries/savings,
3. ERISA mandates BCBSM to refund self-insured plan assets for $6.1 million, according to the Sixth Circuit Court document.

(The court case info: Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, NOS. 13-1773/1859. United States Court of Appeals, Sixth Circuit, Decided and Filed: May 14, 2014).

In compliance with new federal appeals court decision for self-insured plans, Avym Corporation announces timely and critical solutions to the nation’s No. 1 health care cost driver for all self-insured plans: health claim overpayment recoupment/offset and plan assets embezzlement under ERISA.   The groundbreaking TPA/ASO auditing programs are unique and unlike any other traditional self insured health plan overpayment auditing programs and are designed to identify and recover alleged overpayments that have been recouped by the TPAs —but have not been disclosed, restored or refunded to the ERISA self insured plan assets as required under ERISA statutes and fiduciary responsibilities.   These federal court decisions are critical for all self-insured health plans to understand, in view of the fact that almost every TPA for self-insured health plans has engaged in successful overpayment recoupment and offsetting from healthcare providers in today’s multibillion-dollar overpayment market.

In the healthcare provider arena the No. 1 health care claim denial in the country today is the overpayment recoupment and claims-offset.  Correspondingly, for self-insured health plans, the No. 1 hidden cost is overpayment recoupment and plan assets embezzlement.

“This is the first appellate court decision to protect self-insured health plans and millions of hard-working American workers and their families,” says Dr. Jin Zhou, president of ERISAclaim.com, a national expert in ERISA compliance and overpayment recoupment plan assets recovery.

The Six Circuit Opinion: “SILER, Circuit Judge. The Hi-Lex corporation, on behalf of itself and the Hi-Lex Health & Welfare Plan, filed suit in 2011 alleging that Blue Cross Blue Shield of Michigan (BCBSM) breached its fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA) by inflating hospital claims with hidden surcharges in order to retain additional administrative compensation. The district court granted summary judgment to Hi-Lex on the issue of whether BCBSM functioned as an ERISA fiduciary and whether BCBSM’s actions amounted to self-dealing. A bench trial followed in which the district court found that Hi-Lex’s claims were not time-barred and that BCBSM had violated ERISA’s general fiduciary obligations under 29 U.S.C. § 1104(a). The district court also awarded pre- and post-judgment interest. We AFFIRM.” according to the Sixth Circuit Court document

In particular, Sixth Circuit noted: “Furthermore, after a nine-day bench trial, the district court ruled that BCBSM had violated its general fiduciary duty under § 1104(a) and that Hi-Lex’s claims were not time-barred. The court awarded Hi-Lex $5,111,431 in damages and prejudgment interest in the amount of $914,241.” according to the Sixth Circuit Court document.

In finding against BCBSM for fiduciary fraud, the Sixth Circuit states: “BCBSM committed fraud by knowingly misrepresenting and omitting information about the Disputed Fees in contract documents. Specifically, the ASC, the Schedule As, the monthly claims reports, and the quarterly and annual settlements all misled Hi-Lex into believing that the disclosed administrative fees and charges were the only form of compensation that BCBSM retained for itself. BCBSM also “engaged in a course of conduct designed to conceal evidence of [its] alleged wrong-doing…… Finally, according to BCBSM’s own survey of its self-insured customers, a substantial majority – 83% – did not know the Disputed Fees were being charged.”, according to the Sixth Circuit Court document.

In concluding against BCBSM’s self-dealing and withholding, the Sixth Circuit concluded: “A fiduciary with respect to an ERISA plan “shall not deal with the assets of the plan in his own interest or for his own account.” 29 U.S.C. § 1106(b)(1). As interpreted by this court, that statute contains an “absolute bar against self dealing.” Brock v. Hendershott, 840 F.2d 339, 341 (6th Cir. 1988). Because this case involves the same ASC, same defendant, and same allegations, our decision in Pipefitters IV controls with respect to the § 1106(b)(1) claim. See Pipefitters IV, 722 F.3d at 868 (holding that BCBSM’s use of fees it discretionarily charged “for its own account” is “exactly the sort of self-dealing that ERISA prohibits fiduciaries from engaging in”).” according to the Sixth Circuit Court document.

To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs click here.