Archives November 2014

On November 5, 2014, only 15 days after the high court’s denial of BCBSM’s appeal, a federal district court in Michigan lifted a previous stay order for one of the more than 50 similar pending cases. The federal district court in Michigan reopened a separate but identical case after the U.S. Supreme Court, on Oct. 20, 2014, rejected BCBSM appeal of a $6.1 million fraud judgment in favor of a self-insured plan.

Pursuant to the HHS, OIG and the National Health Care Anti-Fraud Association’s conservative estimate, at least 3 percent—or more than $60 billion each year—is lost to fraud, in the current $3 trillion annual healthcare expenditure.

Additionally, in accordance with the Supreme Court Hi-Lex decision and the reopening of pending cases, all self-insured health plans nationwide should look to recover at least $30 to $45 billion in refunds from the past 10 years of successful plan assets TPA/ASO anti-fraud recoupments and managed care savings in the private sector.

“Failure to safeguard plan assets is definitely a fiduciary breach under ERISA, and now the Supreme Court has given us a legal formula for plan assets recovery, a timely and true resolution to today’s U.S. healthcare crisis,” says Dr. Jin Zhou, president of ERISAclaim.com, a national expert and the “ERISA Godfather” in ERISA healthcare compliance and medical claim appeals.

As the DOL ramps up audits and enforcement actions in health plan claims and appeals, every ERISA self-insured health plan sponsor or fiduciary should keep in mind that they are required to monitor TPA/ASOs successful overpayment recoveries and managed care savings, in order to determine whether:

• any of the billions of dollars of successful TPA/ASO overpayment recoupments and offsets nationwide each year are ERISA plan assets;
• all TPA/ASOs must refund all ERISA plan assets as ERISA prohibits all self-dealings;
• all self-insured plan administrators are liable for fiduciary breach in failing to safeguard or recover plan assets.

As illustrated by the Supreme Court decisions and the reopening of similar cases, it is extremely critical for all self-insured health plans and TPAs to understand the implications of the Supreme Court decision rejecting BCBSM’s $6.1 million appeals. Moreover, the high court’s decision will likely have a multi-billion dollar impact on all self-insured plans.

Avym Corporation demystifies this high court decision with new 2015 ERISA Fiduciary TPA Auditing & Plan Assets Recovery Programs designed to enable self-insured health plans in the recovery of potentially billions of dollars in similar TPA/ASO hidden fees. These advanced Recovery Programs can assist all self-insured plans recover all hidden fees in TPA/ASO overpayment recoupments and managed care savings and are based on the Supreme Court’s new interpretation of ERISA plan assets, fiduciary and ERISA prohibited transactions and self-dealings with respect to the managed care industry and ASO contracting practices.

On Oct. 20, 2014, the U.S. Supreme Court announced: “Petition DENIED”, and ultimately declined all appeals of BCBSM’s $6.1 million fraud judgment in favor of a self-insured ERISA plan by the U.S. Court Of Appeals for the Six Circuit, upholding the decision by the District Court for the Eastern District of Michigan. (http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/14-168.htm.)

Supreme Court Case Info: Blue Cross Blue Shield of Michigan, Petitioner v. Hi-Lex Controls, Inc., et al., Case No. 14-168, Docketed: August 14, 2014, Lower Ct: United States Court of Appeals for the Sixth Circuit, Case Nos.: (13-1773, 13-1859), Decision Date: May 14, 2014

The high court announced its decision, without comments, on October 20, 2014 that it will not review a ruling by the U.S. Court of Appeals for the Sixth Circuit in Cincinnati, concluding:

“BCBSM committed fraud by knowingly misrepresenting and omitting information about the Disputed Fees in contract documents”,

after it affirmed a District Court decision, in May 2013, concluding that Michigan’s largest health insurer violated the Employee Retirement Income Security Act (ERISA) in ERISA prohibited transactions and ERISA fraud by concealing BCBSM’s hospital claims markup as much as 20% and pocketed the overcharge for over 20 years, according to the Supreme Court website: (http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/14-168.htm.)

On November 5, 2014, only 15 days after the high court decision on October 20, 2014, the federal district court in Michigan lifted a previous stay order for one of the more than 50 similar cases pending in the same court. (Fisher & Company, Inc. et al v. Blue Cross and Blue Shield Michigan, U.S. District Court, Eastern District of Michigan (Detroit), CIVIL DOCKET FOR CASE #: 2:13-cv-13221-GER-MAR.)

On November 5, 2014, the district court explained its decision to reopen the pending case:

“On May 14, 2014, the U.S. Court of Appeals for the Sixth Circuit issued its opinion in the Hi-Lex Conrols matter, affirming the district court’s judgment. Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Mich., 751 F.3d 740 (6th Cir. 2014). BCBSM timely filed a petition for a writ of certiorari to the United States Supreme Court on August 12, 2014, and the Supreme Court denied the petition on October 20, 2014. Blue Cross Blue Shield of Mich. v. Hi-Lex Controls, Inc., cert. denied, 83 U.S.L.W. 3109, 2014 WL 3965217 (U.S. Oct. 20, 2014) (No. 14-168)….Accordingly, IT IS HEREBY ORDERED that Plaintiffs’ Motion to Lift Stay (Dkt. # 19) is GRANTED and that this matter is REOPENED.”,

according to court documents.

To find out more about Avym’s 2015 ERISA Fiduciary TPA Auditing & Plan Assets Recovery Programs or to contact us about educational programs please click here.

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On Nov. 5, 2014, federal Court of Appeals ruled for out-of-network provider’s ERISA right to sue UnitedHealth on behalf of patients for out-of-network deductible waiver claim denials. In a much anticipated case, the 9th Circuit sided with Spinedex Physical Therapy USA Inc., saying the clinic had standing to sue because the plan beneficiaries had assigned them their rights.

This case represents the first shot over the bow at insurer’s attempts to limit payments to providers and discourage patient out-of-network utilization based on patient deductibles and co-pays.

The court rejected defendant UnitedHealth’s argument, and explained that an out-of-network provider has ERISA rights for payment and to sue–and whether a provider balance bills a patient, after the assignment when seeking payment from the health plan, is irrelevant. This is a clear court victory for all out-of-network patients and providers.

The federal Court of Appeals for the Ninth Circuit in California ruled for the plaintiff out-of-network provider’s ERISA right to sue UnitedHealth on behalf of patients for out-of-network deductible waiver claim denials, because

“Defendants point out that Spinedex has not sought payment from its patients for claims, or portions thereof, that United and the Plans have refused to pay.”

All out-of-network providers must understand this court decision as it affects both patients and providers, with an increasing number of out-of-network deductible waiver claim denials.

Avym Corp. announces new ERISA out-of-network claims specialist special training programs in accordance with this federal appellate court decision:

“It also included a statement in which patients acknowledged that they were liable for all costs of the services rendered…….But the patients’ injury in fact after the assignment is irrelevant. As assignee, Spinedex took from its assignors what they had at the time of the assignment. At the time of the assignment, Plan beneficiaries had the legal right to seek payment directly from the Plans for charges by non-network health care providers.”

according to court documents.

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, filed on Nov. 5, 2014.

Regardless of upfront deductible or co-pay collection after the assignment, an out-of-network provider has ERISA rights to sue for payment from an ERISA health plan, as long as the provider has a valid patient ERISA assignment and establishes the patient’s legal obligation to pay. Deductible and Co-Pay waiver claim denial has been the No. 1 out-of-network claim denial reason, with an increasing number of out-of-network patient bankruptcies as a result of the national epidemic and disastrous three-invoice patient collections practice. 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.

This historical out-of-network case is a classic example of the most pressing issue facing out-of-network patient and providers across the nation.  The scenario plays out every day: the health plan will usually deny all out-of-network claims for alleged out-of-network deductible and coinsurance waivers by a provider, and allegedly the patient “has not suffered injury in fact”, then the health plan is not liable for any payment to the provider. This is usually followed by alleged overpayment requests and unauthorized offsets.

In Spinedex, United Healthcare denied all out-of-network claims:

“Defendants point out that Spinedex has not sought payment from its patients for claims, or portions thereof, that United and the Plans have refused to pay. Defendants argue that because Spinedex has not sought payment from its assigning patients for any shortfall, those patients do not have the “injury in fact” necessary for Article III standing. Defendants argue that since Spinedex stands in the shoes of, and can have no greater injury than, its assignors, Spinedex has not suffered injury in fact.”

The court rejected defendant Unitedhealthcare’s argument, and explained that an out-of-network provider has ERISA rights for payment and to sue and whether a provider balance bills a patient, after the assignment when seeking payment from the health plan, is irrelevant. The court explained why:

“We are aware of no circuit court that has accepted defendants’ argument. …… The flaw in Defendants’ argument is that they would treat as determinative Spinedex’s patients’ injury in fact as it existed after they assigned their rights to Spinedex. We agree with Defendants that Spinedex has not sought to recover from its patients any shortfall in Spinedex’s recovery from the Plans, and that the patients have not suffered injury in fact after assigning their claims. But the patients’ injury in fact after the assignment is irrelevant. As assignee, Spinedex took from its assignors what they had at the time of the assignment. At the time of the assignment, Plan beneficiaries had the legal right to seek payment directly from the Plans for charges by non-network health care providers. If the beneficiaries had sought payment directly from their Plans for treatment provided by Spinedex, and if payment had been refused, they would have had an unquestioned right to bring suit for benefits.”

While Defendant United Healthcare prevailed in certain other claims, the Ninth Circuit concluded:

“We hold that Spinedex had Article III standing to bring benefit claims against Defendants as assignee of its patients. Its injury in fact is the same injury its assignees had at the time of the assignment.”

The best explanation for out-of-network ERISA patient protections is from DOL, Obama administration’s Amicus brief and oral arguments in this case:

“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 assigned healthcare claims or participants who are able to first to pay for the care, or the provider can recognize as creditworthy.”

according to court audio records.

DOL oral argument recording can be heard HERE

For a case summary click HERE

Avym is dedicated to providing plaintiff providers with ERISA appeal compliance and ERISA litigation support in all cases as well as ERISA class actions.  All medical providers and Plans should understand several critical issues regarding the profound impact of this final court decision on the nation’s No. 1 health care claim denial – overpayment demand recoupment and offsetting; including how to correctly appeal every wrongful overpayment demand and subsequent claims offsetting with valid ERISA assignment and the first ERISA permanent injunction.  In addition, when faced with pending litigation and or offsets or recoupments, providers should look for proper litigation support against all wrongful overpayment recoupment and offsetting, to seek for enforcement and compliance with ERISA & PPACA claim regulations.

For more information or to contact AVYM, click HERE