Category Employer Health Reform

Avym, along with the State of New Jersey, acting through the New Jersey Attorney General Matthew J. Platkin, announced today that Horizon Healthcare Services, Inc. has agreed to pay $100 million to settle a lawsuit McKool Smith filed in 2021 on behalf of several whistleblowers, including Avym principals and founders Mark Flores, and Vince Flores.

The suit, brought under the qui tam provisions of the Federal False Claims Act (FCA) and the New Jersey False Claims Act, alleges that Horizon defrauded the New Jersey State Health Benefits Program and the State Employee Health Benefit Plan (“State Benefit Plans”).

The allegations relate to Horizon’s role administering the medical benefits of hundreds of thousands of New Jersey government employees. Horizon submitted false funding claims to the State for years, costing taxpayers hundreds of millions of dollars. 

This case involved allegations of a multi-year scheme by Horizon to take New Jersey taxpayer money from State employee and school health benefit plans.

Mark Flores, a nationally recognized health benefits consultant, expressed his thanks to the Office of the Attorney General.  “We would like to thank Attorney General Platkin and the devoted lawyers in the Government and Healthcare Fraud Unit for paying attention to this important issue, for investigating our allegations, and pursuing the claims to protect State Health Plan members and New Jersey taxpayers.”  Vince Flores, a health benefits consultant, followed, “We hope this settlement will cause Horizon and other health insurers to examine how they administer self-funded plans.”

All “Relators” include Mark Flores, Vince Flores, Chris Deacon, Kevin Lyons, Pat Colligan & Marc Kovar

Link to Complaint: https://www.njoag.gov/wp-content/uploads/2025/11/2025-1114_NJ-US-ex-rel-Lyon-v-Horizon_Complaint-in-Intervention.pdf

Link to Settlement Agreement: https://www.njoag.gov/wp-content/uploads/2025/11/2025-1114_NJ-ex-rel-Lyons-v-Horizon_Executed-Settlement-Agreement.pdf

Uncovering the Contract Clauses, Repricing Rules, and Shared-Savings Schemes That Inflate Costs and Hide True Liability

In its 2025 report to Congress, the Department of Labor (DOL) revealed a staggering fact: self-insured group health plans, as reported through 2022 Form 5500 filings, cover nearly 39 million Americans and hold close to $120 billion in assets. That’s not just an accounting statistic, it’s a reminder that employers shoulder enormous fiduciary responsibilities, and employees’ health and financial security depend on how well those obligations are met. Employer surveys and national benefits data show broader employer‑sponsored coverage trends that put the total population affected by self‑funding arrangements, when accounting for plans that do not file Form 5500, large public‑sector plans, in a higher range.

Two primary reasons employers shift to self-funding plans are to reduce administrative fees and increase transparency. However recent court cases have shown that is not always the case. Unfortunately, self‑insured employer health plans shift financial risk from insurers to employers and place contract language at the center of cost, control, and liability. Plan documents and vendor agreements determine how claims are priced, how administrative fees are calculated, and who ultimately bears disputed costs. What looks like routine boilerplate often contains repricing rules, benchmark definitions, and shared‑savings formulas that can drastically inflate employer costs.

This article explains a particular process that matters for plan sponsors and highlights the common clauses that may create hidden liabilities, and offers practical steps employers can take to identify, negotiate, and remediate costly terms before they become real expenses.

to identify, negotiate, and remediate costly terms before they become real expenses.

The Blue Cross Blue Shield Association (BCBSA) offers one such program. Blue Cross Blue Shield Inter-Plan Programs (IPP), including the BlueCard Program, govern how claims are processed when a member receives services outside their home BCBS licensee’s network. These rules apply to private and public employers whose coverage is administered by any independently owned Blue Cross Blue Shield licensee.

The BlueCard Program is the primary IPP for accessing care outside of a member’s local plan area. It establishes consistent rules for providers and members, making it easier for people to get health services while traveling.

Key aspects include Host and Home Plans.

The Home Plan is the member’s BCBS plan, which issued their policy or contracts with the member’s employer sponsored group. Local Home Plan service areas can overlap in some states, which can affect network determinations and claim handling.

Conversely, the Host Plan, acts as the local BCBS plan in the geographic area where the member is receiving care (e.g., a traveler or out-of-area enrollee gets treatment in the Host’s region). The Host Plan is responsible for contracting with local providers, that are outside the area of the Home Plan and must validate the provider information and applies its own Host Plan pricing (confused yet?).

When a Home Plan member receives care in a Host Plan’s territory, the local provider submits the claim to the Host Plan, which processes it using its own contracts and rates only for in-network providers. The claim is then electronically routed to the Home Plan via the national BCBS Inter-Plan Programs, where it is adjudicated based on the member’s eligibility, coverage, and benefit terms.

A key illustration is the case Tiara Yachts v. BCBS Michigan. While much has been written about this decision, it is important to note that the dispute involves “out-of-state” claims, precisely the type of claims processed through the IPP/BlueCard framework.

Under program rules, it appears that out-of-network claims processed through the IPP/BlueCard framework were allegedly priced at, no less than, the provider’s billed charges.

In practice, this means:

Even if no negotiated discount applies, the claim cannot be repriced below the provider’s full billed amount. This requirement can also result in higher plan costs, as employers are effectively locked into paying the provider’s billed charges for out-of-network services processed through the program.

There is also an important risk consideration. Employers should be aware that this policy may not only limit their ability to control or negotiate down out-of-network costs, but may also create conflicts with plan terms, since reimbursing claims at the billed charge rate could violate stated plan provisions on out-of-network benefits and reimbursement methodologies;

Key Takeaway

While this article examines Blue Card programs, all national carrier TPAs employ similar national pricing programs and cost containment services. For employer-sponsored and self-funded health plans, it’s critical to understand how your third-party administrator handles out-of-network claims pricing and shared savings provisions, especially for out-of-area services. These claims, often triggered when members receive care outside their home region, can expose plans to inconsistent pricing practices and opaque savings arrangements, as highlighted in the Tiara Yachts case.

These rules can significantly affect plan spend and expose plans to inflated billed charges without room for repricing or discounting, and may also place plan administrators at risk of being out of compliance with their own plan terms.

Knowing how your TPA adjudicates and negotiates these claims is essential for fiduciary oversight and cost control.

Action Checklist for Employers

1. Review Plan Documents – Confirm that Plan document out-of-network reimbursement terms are being followed by IPP/BlueCard pricing rules.
2. Examine Out-of-State Claims – Identify where billed charges were applied and quantify the cost impact.
3. Engage Your TPA – Clarify how IPP/BlueCard claims are repriced and challenge any practices inconsistent with plan terms.
4. Monitor Legal Developments – Stay alert to cases like Tiara Yachts, which could signal broader enforcement or litigation risks.
5. Hire Independent Non-Conflicted Partners – Don’t rely on the TPA’s reports, commission outside claim assessments with independent, non-conflicted vendors;

Whether you’re preparing for regulatory review, onboarding vendors, or rebuilding stakeholder trust, we’re ready to help you lead with precision, transparency, and strategic control.

Let’s talk. Your next move sets the standard.

When Dummy Codes Cost Real Money: Lessons from the Peters v. Aetna Settlement

In September 2025, the long-running ERISA class action Sandra Peters et al. v. Aetna and Optum reached a settlement, which was approved for over $8 million, closing a case that began in 2015. The lawsuit, which we wrote about before, revealed how fee-shifting and opaque subcontractor arrangements can quietly erode fiduciary trust. For employer plan sponsors, the case is more than a headline, it’s a blueprint for strengthening oversight and restoring confidence.

⚖️ The Allegations

Aetna allegedly disguised administrative fees as medical expenses, misrepresenting costs on member Explanation of Benefits (EOBs) and inflating member cost-sharing. Optum, (a subsidiary of UnitedHealth Group) acting as Aetna’s subcontractor, facilitated the practice. The result? Systemic overcharges and fiduciary breaches.

Mislabeling Fees: Aetna allegedly disguised administrative charges as medical expenses on member EOBs. Optum (a UnitedHealth subsidiary) facilitated the practice. Ultimately, Members faced inflated cost-sharing, and fiduciary duties were compromised.

According to court records, after treating a patient, the health care provider submitted its claim to Optum for the services rendered. Optum then added a “dummy” CPT code to the claim to reflect a bundled rate fee, consisting of Optum’s administrative fee and the cost of the health care provider’s services. Optum would then forward the bundled rate fee claim to Aetna for its approval. In turn, this bundled rate fee would be paid based on the Plan’s responsibility framework.

In other words, Aetna and Optum allegedly colluded to hide administrative fees by disguising them as Medical Services fees

The Peters v. Aetna case delivered a sharp reminder that fiduciary accountability doesn’t hinge on contractual language, it hinges on control, conduct, and candor. Below are key takeaways from the court’s findings and the broader implications for executives overseeing health plan operations:

• Functional Fiduciary Status – Aetna was held to ERISA fiduciary standards based on its control over claims and appeals, even without explicit contractual language;
• Fee Shifting and Misrepresentation – Labeling administrative fees as clinical costs violated duties of loyalty and transparency;
• Equitable Remedies Apply – The court affirmed that surcharge and disgorgement are valid remedies, even without individualized proof of financial harm.

🚨 Fiduciary Risks for Executives

Even well-intentioned executives can face fiduciary exposure when oversight mechanisms lag behind operational complexity. As recent cases have shown, relying solely on contractual language or vendor assurances isn’t enough.

• Hidden Fee Structures – Subcontractor charges disguised as clinical costs can inflate member liability.
• Passive Oversight Exposure – Sponsors who rely on contracts alone face reputational, financial, and legal risk.
• Documentation Gaps – Weak delegation protocols and oversight records undermine fiduciary defenses.

📊 Strategic Takeaways for Plan Sponsors

Fiduciary risk isn’t just about what’s written in the contract, it’s about what sponsors can prove they actively oversaw. As recent litigation has shown, passive reliance and thin documentation can leave even well-structured plans exposed.

1. Audit Subcontractor Relationships – Confirm fees aren’t disguised as clinical claims charges.
2. Scrutinize EOB Language – Misleading formats can trigger fiduciary liability.
3. Clarify Delegation Boundaries – Contracts must reflect actual decision-making authority.
4. Document Oversight Protocols – Courts expect proof of active monitoring.

💼 Why It Matters

This case reaffirms that fiduciary duty isn’t just a legal checkbox, it’s about leadership. Executives who act decisively can: Prevent litigation and regulatory scrutiny; Reinforce member and stakeholder trust; Position their organization as a fiduciary standard-bearer

💡 Lead with Fiduciary Clarity

Your health plan deserves more than compliance, it deserves confidence. In the wake of Peters v. Aetna, fiduciary oversight isn’t optional. It’s strategic. Our team partners with executive leadership to transform risk into resilience and ambiguity into alignment.

Here’s how we help sponsors lead from the front:

• Validate Claims & Find Hidden Fee Flows – Trace every dollar to ensure accuracy and defensibility
• Review Delegation Protocols – Align contracts and operations with fiduciary accountability
• Reinforce Governance Frameworks – Build systems that document oversight, escalation, and board visibility

💼 Let’s Make Fiduciary Leadership Your Competitive Advantage

Whether you’re preparing for regulatory review, onboarding vendors, or rebuilding stakeholder trust, we’re ready to help you lead with precision, transparency, and strategic control.

Let’s talk. Your next move sets the standard.

Class Action alleging that a “Dummy Code” is used to “Bury” fees may result in BURIED TREA$URE for Self-insured employer sponsored group health plan clients of Aetna & OptumHealth.

On June 22, 2021, the 4th U.S. Circuit Court of Appeals reversed a ruling for Aetna and OptumHealth Care Solutions, resuscitating a potential class-action lawsuit alleging that they agreed to use a “dummy code” to bury unbillable administrative fees as billable medical treatment.

This case should serve as an alarm to all Self-insured group health plans, particularly those that give their TPA or carrier authority to pay claims benefits on their behalf because the alleged outrageous behavior by Aetna and OptumHealth raise questions as to whether all their self-insured plan clients may have unknowingly overpaid for certain claims and thus be entitled to significant recovery of Plan Assets.

According to court records:

The record on summary judgment is sufficient to sustain a finding that Aetna circumvented the Plan terms by “burying” the administrative fee it owed Optum in the dummy CPT code claims process.

Allegedly, after treating a patient, the health care provider submitted its claim to Optum for the services rendered. Optum then added a “dummy” CPT code to the claim to reflect a bundled rate fee, consisting of Optum’s administrative fee and the cost of the health care provider’s services. Optum would then forward the bundled rate fee claim to Aetna for its approval. In turn, this bundled rate fee would be paid based on the Plan’s responsibility framework.

In other words, Aetna and Optum allegedly colluded to hide administration fees by disguising them as Medical Service fees.

The court laid the groundwork for employer plan sponsors by opining, “Peters therefore withstood summary judgment on her claims for surcharge, disgorgement, and declaratory and injunctive relief under § 502(a)(1) and (3),

and for her claims on behalf of the Plan for surcharge, disgorgement, and declaratory and injunctive relief—as well as possibly restitution—under § 502(a)(2).”

Case info: Sandra M. Peters v. Aetna Inc., et al Case No.19-2085, US District Court of Appeals Fourth Circuit

The court goes on to say, “A reasonable factfinder could conclude that such action contradicted the obligations Aetna had contracted to fulfill under the terms of the Plan and the MSA,  effectively changing the terms of both without formal amendment of either….[and] that Optum was acting as a party in interest engaged in prohibited transactions” 

The judge went on to determine that “a reasonable factfinder could conclude that Aetna breached its duties based on the following four actions regarding the EOBs: (1) referring to Optum, and not the actual health care provider, as the “provider” of the medical services; (2) using “dummy codes” that did not represent actual medical services; (3)  misrepresenting the “amount billed” as including Optum’s administrative fee; and (4) describing the Optum rate, which included its administrative fee, as the amount that the Plan and its participants…owed for their claim.”

For over a decade, Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. Now with this case and the Supreme Court’s guidance on ERISA anti-fraud protection, we are ready to assist all medical providers and self-insured plans recover billions of dollars on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs click here.

Medical Providers Fire Back At Cigna’s Motion, Telling The Judge That “Cigna Does Not Follow The Law, And It Misrepresents How It Actually Administers The Plans.”

In the Reply Brief of Plaintiffs Advanced Gynecology and Laparoscopy of North Jersey, et al v. Cigna Health and Life Insurance, Medical Providers allege that Cigna appears to not only ignore Plan and legal requirements of the Self-Insured Health Plans which it administers but also employs multiple schemes to pay substantially less for covered charges already acknowledged as accepted and processed under the Plan terms, ultimately improperly shifting the financial burden to the patients, according to court records.

“Cigna shifts financial responsibility for covered expenses onto the backs of patients, their employers, and Plaintiffs, while Cigna’s profits grow.”

In this case, which we have written about before, a group of out-of-network Medical Providers sued Cigna for RICO and ERISA violations, alleging CIGNA accepts the out-of-network provider claims at the full billed charges and requests the same amount from the corresponding Self-Insured Health Plans. However, instead of paying the Provider or member, CIGNA hires a Repricing Company to try and negotiate a reduction.

The Providers further allege that if they refuse to negotiate, CIGNA pays the claim at an exorbitantly low level but appears to keep the difference between what was removed from the Self-Insured Health Plan and what was paid to the Providers. In an attempt to conceal this from both patients and Self-Insured Health Plans, CIGNA issues Electronic Remittance Advice (ERA) or paper Explanation of Benefits forms (EOB) misrepresenting the claim balance, or the difference between what was removed from the Plan and paid to the Providers, as a “Discount” to the members. The Subscriber EOBs certify the member is not responsible for the claim balance, simultaneously; the Provider ERAs represent the claim balance to the Providers, as a member liability or “Amount Not Covered”. The suit also alleges that CIGNA’s claims process for out-of-network claims, including the Cigna Claims, violates the “HIPAA standard transaction rules under 45 C.F.R. § 164”, by using incorrect “45” coding combinations”.

Case info: Advanced Gynecology and Laparoscopy of North Jersey.et. al. v. Cigna Health and Life Insurance; Case Number: 2:19-cv-22234 in the United States District Court for the District of New Jersey, Filed December 31, 2019.

Cigna filed a Motion to Dismiss on May 06, 2020. The Medical Providers filed this reply to Cigna’s motion on July, 24, 2020: Reply brief of Plaintiffs Advanced Gynecology and Laparoscopy of North Jersey, et al v. Cigna Health and Life Insurance; 2:19-cv-22234; Doc 54, filed 7/24/2020.

The “Fictitious Contracting Scheme”: According to the Providers, Cigna Administered Health Plans and Subscribers are misled into believing that Cigna’s underpayments of out-of-network claims are legitimate because of an in-network contract or negotiated agreement with a third-party “Repricing Company”. The Providers allege Cigna falsely represents to patients that Cigna negotiated “discounts” with the out-of-network Medical Providers and that “Cigna negotiates discounts with health care professionals and facilities to help you save money.” Moreover, on the Provider ERA forms for the same transactions, Cigna uses the so-called “CO-45” code combination, with “CO” signifying “Contractual Obligation” and “-45” signifying “Charge exceeds fee schedule/maximum allowable or contracted legislated fee arrangement.” Cigna argues that this code combination is properly used when the medical provider’s “charge exceeds either the contracted in-network rate or the out-of-network maximum allowable rate like the MRC or R&C.”

“But when Cigna applies the “CO-45” coding combinations to amounts described as “discounts” on the patient EOBs, Cigna is falsely representing that Cigna “contracted” for the reduction.“

The “Repricing Reduction Scheme”: The Providers also allege that Cigna misleads its own clients (Cigna Administered Self-Insured Health Plans) into paying “cost-containment” fees to Cigna and Repricing Companies calculated as a percentage of the underpayment in relation to the value of the Providers’ claims. Yet, while Cigna represents that “applying these discounts avoids balance billing and substantially reduces the patient’s out-of-pocket cost,” Cigna pays itself and the Repricing Companies cost-containment fees whether or not the cost-containment process saves the Self-Insured Health Plan money. Ironically, Cigna has been at the forefront of initiating litigation against out-of-network providers for not collecting patient liabilities in full. Interestingly, this case alleges that Cigna misrepresents the balance of unpaid claims as “Discounts” to its members.

The “Contradictory EOB Scheme”: Here the Providers allege that Cigna has tried to confuse and mislead them as well as patients, through false and inconsistent statements on Cigna-issued EOB forms issued to patients and ERA forms issued to the Providers. Cigna tells the Providers on the ERA forms that the amounts Cigna has held back are “not covered” by the Plans or are subject to “adjustments,” and the patient owes the balance. However, Cigna’s EOB forms issued to the patients for the same claim, report that Providers agreed to a “discount” and the patient has “saved” the rest.

According to court records, “it is impossible to reconcile Cigna’s statements on the patient EOBs—that a “discount” was applied to their claim and the patient “saved” the amount of the discount—with Cigna’s statements on the provider ERAs for the same claims, that make clear that the patient has not “saved” anything because they show that the patient owes a huge balance bill.”

The “Forced Negotiations Scheme”: The fourth Scheme alleges that Cigna forces out-of-network Medical Providers to enter into negotiations for payment of valid claims, with the goal of either coercing or wearing down the Providers to accept drastic underpayments. Allegedly, Cigna conspires with repricing companies to misrepresent deep discounts, saying in some instances that the services are not covered. According to the Providers, Cigna’s processing system is set up to automatically send all out-of-network claims to the Repricing Companies. The repricing companies, in turn, send the Providers letters threatening that the services will not be covered at all, or that the Providers will be reimbursed at a percentage of the Medicare rate. Even worse, if the settlement offers are rejected, Cigna falsely declares large portions of the claim “not covered.”

All ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases.

For years large insurers’ controversial processes have been an issue for out-of-network providers across the nation. Now, self-insured plans are starting to feel the pain of these same, potentially illegal practices.

Health plans must be proactive in validating that plan assets are used to pay for their member’s medical expenses or otherwise get returned to their plan.

Avym has helped Self-Insured Health Plans recover millions from TPAs that engage in questionable practices. Avym advocates for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets on behalf of hard-working Americans. To find out more about Avym’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.

Self-insured health plans nationwide should look to recover $30 to $45 billion in Plan Asset refunds from the past 10 years of successful plan assets TPA/ASO anti-fraud recoupments and managed care savings in both the public and private sector

As we have written before, ERISA as well as other federal and state regulations have continued to pave the way for providers and patients, however, these same regulations can also pave the way for self-insured employer plans as well.

As more and more industry experts and watchdogs begin to see the light, it is extremely critical for all self-insured health plans and TPAs to understand the multi-billion dollar impact TPA/ASO recoveries can have on all self-insured health plans, including state health plans.

Plans should seek to identify and recover any plan assets that have been removed from the plan trust account to pay benefits, but instead have been retained by the TPA as “hidden fees”

This includes alleged overpayments that have been recouped by the TPAs –and have not been disclosed, restored or refunded to the self-insured plan assets as required under federal statutes and fiduciary responsibilities.

On February 20, 2020, Highmark Inc. announced its Financial Investigations and Provider Review (FIPR) Department realized over $260 million in savings and recoveries related to fraud, waste and abuse in 2019. Additionally, Highmark has saved and recovered over $850 million over the past five years. Highmark Health, the parent company of Highmark Inc., recently reported $629 million in consolidated earnings through just the first two quarters of 2019.

The Highmark announcement comes a little over a month after the United States Department of Justice issued a press release announcing it had recovered $2.6 Billion from fraud and false claims in matters related to healthcare for fiscal year 2019.

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. 

The immediate impact of the recent Highmark and Department of Justice announcements, coupled with a 2016 Supreme Court decision could be billions of dollars for self-insured health plans nationwide, as a result of the TPA industry’s potential recovery of billions of dollars in overpayment recoupments and anti-fraud campaigns over the past 10 years.

All self-insured health plans and TPAs should monitor claims data in light of these recent announcements, 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 recovery and offset industry.

Failure to safeguard plan assets is definitely a fiduciary breach under ERISA, and now the Supreme Court, the United States Department of Justice and Highmark Inc. have given us a legal and practical formula for plan assets recovery, an accessible and legitimate resolution to today’s U.S. healthcare crisis.

As the DOL ramps up audits and enforcement actions in health plan claims and appeals, every 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-dealing

all self-insured plan administrators are liable for fiduciary breach in failing to safeguard or recover plan assets

The 2016 Supreme Court Montanile decision makes it perfectly clear, any alleged overpayment/lien for a claim in a fully-insured plan cannot attach to a different, self-insured plan fund or claims payment. It’s a basic principle of ERISA that a TPA for a self-insured plan is absolutely barred from converting claims payment/plan assets from the self-insured plan to pay for an alleged overpayment/lien and retain all recovery, for the TPAs own fully-insured account. As alleged in other federal courts, this can be viewed as self-dealing/embezzlement.

The only question now is whether self-insured plan fiduciaries will take immediate corrective actions to safeguard plan assets or wait till the DOL knocks on their door with an audit alert.

In combination with Highmark’s announcement, Avym Corporation offers advanced ERISA Embezzlement Recovery Programs in preparation of the forth-coming multi-billion dollar impact on self-insured health plans nationwide.  Specifically the advanced programs will examine the following issues: (1) determine if any TPA overpayment recoupments and offsets, which are in the billions of dollars nationwide, are ERISA plan assets, (2) ensure all TPA’s properly refunded ERISA plan assets as ERISA prohibits all self-dealings, (3) communicate and clarify self-insured plan administrator’s potential liability for fiduciary breach in failing to safeguard or recover plan assets.

These 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 any plan assets that have been removed from the plan trust account to pay benefits, but instead have been retained by the TPA as “hidden fees”, including alleged overpayments that have been recouped by the TPAs –and have not been disclosed, restored or refunded to the ERISA self-insured plan assets as required under federal statutes and fiduciary responsibilities.

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

Self-Insured Employer Health Plan Administrators, Plan Sponsors, and key decision-makers would do well to heed the old adage: if it sounds too good to be true, it probably is.

In the ever-changing employer healthcare landscape, there has been an increasing group of professionals espousing “new solutions” that purport to offer substantial savings to self-insured employer health plans, particularly with out-of-network claims. One of the issues with many of these “new solutions” is that very few vendors/entities agree to accept fiduciary responsibility and the accompanying liabilities.

One of those “solutions” involves reference-based pricing (RPB). While relatively few employer plans have adopted RBP, some employers are considering this “new solution” under the impression that there are no other alternatives.

Employer health plans considering any of these “new solutions” should factor in the substantial risks before implementing any of these provisions plan wide, lest they are left facing lawsuits from their own members as well as medical providers.

This case offers a cautionary tale to self-funded employer health plans, where a self-insured employer health plan implemented a reference-based pricing mechanism. The case is Central Valley Ag Cooperative v. Leonard, No. 8:17CV379, 2019 WL 4141061, D. Neb. The plaintiffs, a self-insured health plan, Central Valley AG Cooperative Healthcare Plan and its plan sponsor and fiduciary, Central Valley, (collectively the “Plan”) filed the lawsuit against their own third party administrator and medical claim reviewers, asserting claims for breach of fiduciary duty under ERISA as well as self-dealing.

The Plan alleged that the vendors created a systematic reimbursement scheme that financially benefitted themselves at the expense of the members.

In summary, the Plan accused the vendors of cutting claims payments so low, substantially lower than contracted rates, that Plan members were hit with extremely high balance bills from medical providers that did not accept the RBP rates. This led to lawsuits against the Plan by medical providers and possible lawsuits against the plan by its own members.

Although the self-insured employer plan and plan sponsor agreed to the new pricing structure, according to court records, “claims payments to health care providers under the Plan virtually ceased. Providers complained the Plan was not paying them for services rendered to Plan participants”. The plan also alleged their own plan members were harmed and “subjected to collection efforts by physicians and other providers.” The complaint also alleged that “Several providers refused to render further services to Plan participants, their spouses, and their dependents.” Amazingly the Plan also alleged that it had “lost benefits from its stop-loss insurance carrier due to the extended claim disputes.”

Ultimately, the court ruled against the Plan, leaving the Plan on the hook for costly litigation fees.

This case serves as a very important warning to self-insured health plans regarding “new solutions” where unscrupulous vendors will promise monumental savings with no adverse effects or balance billing to Plan members.

While there are many legitimate vendors providing valuable services, RBP at its core represents a zero-sum game, in that savings to employers have to come from somewhere, in this case, either the hospital, through negotiated reductions or the employees, through balanced billing.

Consequently, key decision makers should also be aware of overreaching promises such as “universally accepted fee schedules” and “total compliance” with state and federal laws.

Ultimately, legitimate vendors should be willing to accept fiduciary responsibility and all the liability that comes with it. Self-Insured Employer Health Plan Administrators, Plan Sponsors, and key decision-makers would do well to heed the old adage: if it sounds too good to be true, it probably is.

Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.

This extraordinary lawsuit comes on the heels of a massive settlement, where CIGNA and American Specialty Health agreed to pay $20M after they were accused of misrepresenting medical expenses by concealing material information.

CIGNA Health and Life Insurance Company is one of the “big five” which represents the five largest health insurers in the United States. Prior to acquiring Express Scripts in 2018, Cigna relied heavily on its Third Party Administrator platform, providing services to health plans of all sizes for private commercial health plans as well as state and local government plans.

Among CIGNA’s customers are many large, well known, national companies that reach across different sectors of the economy, from banking to manufacturing to retailers.

According to the 150 page complaint: “Plaintiffs bring this lawsuit to expose Cigna’s brazen embezzlement and conversion schemes, through which it maximizes profits by defrauding patients, healthcare providers, and health plans of insurance out of tens of millions of dollars every year… The result is that Cigna succeeds in shifting financial responsibility for covered expenses onto the backs of patients, their employers, and Plaintiffs, while Cigna gets rich.”

This latest case seems to be the culmination of a spate of recent cases alleging similar violations. This troubling pattern may be an indication that no employer sector is immune to possibly fraudulent claims processing practices. All of this seems to provide more evidence of increased scrutiny for self-insured health benefits that has long been commonplace for retirement benefits.

Case info: Advanced Gynecology and Laparoscopy of North Jersey.et. al. v. Cigna Health and Life Insurance; Case Number: 2:19-cv-22234 in the United States District Court for the District of New Jersey, Filed December 31, 2019.

In summary, the lawsuit alleges that CIGNA accepts the out-of-network provider’s claims at the full billed charges and requests the same amount from the self-insured health plan. However, instead of paying the medical provider or member, CIGNA hires a Repricing Company to try and negotiate a reduction. If the provider refuses to negotiate, CIGNA pays the claim at an exorbitantly low level but appears to keep the difference between what was removed from the self-insured health plan and what was paid to the medical providers. In an attempt to conceal this from the patient and self-insured health plan, CIGNA issued Electronic Remittance Advice or paper Explanation of Benefits forms (collectively, the “EOB”) misrepresent the balance as “Discount” to the members, certifying the member is not responsible for the balance, while simultaneously representing the balance to the Plaintiffs as member liability or “Amount Not Covered”.

Astonishingly, the complaint alleges that CIGNA, after being advised of these anomalies, not only refused to correct the issues but instructed the medical provider plaintiffs to sue to rectify the situation! According to the court documents:

“After numerous detailed communications with Cigna management in which Plaintiffs protested Cigna’s unlawful processes and procedures, Cigna informed Plaintiffs that it has no compliance department capable of addressing these issues, and encouraged Plaintiffs to initiate legal action in order to prompt Cigna to act. Plaintiffs have decided to follow Cigna’s suggestion.”

The complaint further alleges that CIGNA has violated the Racketeer Influenced and Corrupt Organizations Act, (RICO) through four distinct schemes:

1. misrepresenting that a contract or agreement exists between the Plaintiffs and CIGNA or its vendor “Repricing Company”;
2. conspiring with its vendor “Repricing Companies” to submit fraudulent “Savings Fees” to the self-insured health plan;
3. attempting to conceal the scheme by altering the Explanation of Benefits (EOB), sent to the medical provider and to the patient for the same claims, where the patient’s EOB represents the outstanding balance as a negotiated “Discount”, however the medical provider’s EOB shows the outstanding balance as the “Amount Not Covered”;
4. again conspiring with its vendor “Repricing Company” by coercing the Plaintiffs to accept exorbitantly low reimbursements;

Ironically, CIGNA has been at the forefront of initiating litigation against out-of-network providers for not collecting patient liabilities in full. Yet, this suit alleges CIGNA misrepresents the balance of unpaid claims as “Discounts” to its members.

This case also alleges that CIGNA’s claims process for out-of-network claims, including the Cigna Claims, violates the “HIPAA standard transaction rules under 45 C.F.R. § 164”, by using incorrect “45” coding combinations”. The complaint also alleges CIGNA has violated the “uniform operating rules for the exchange of Automated Clearing House (“ACH”) electronic fund transfer payments among financial institutions that are used in accordance with Federal Reserve regulations and maintained by the Federal Reserve and the Electronic Payments Associations, known as the National Automated Clearing House Association or “NACHA.”

The first scheme allegedly involves CIGNA’s use of the “mails or wires to misrepresent to Plaintiffs, Cigna Subscribers, and the Cigna Plans, that Cigna underpaid Plaintiffs’ claims either because of a contract between an individual Plaintiff and Cigna as an in-network provider or with a third-party leasing contractor or negotiator couched as a repricing company (“Repricing Company”) to accept discounted rates (the “Fictitious Contracting Scheme”).”

The Plaintiffs allege they are not in-network nor have they agreed to any reductions with the “Repricing Company”. According to court records, “While repricing of in-network claims is permissible when there is an existing contract between a provider and Cigna, Plaintiffs are out-of-network providers who have not contracted with Cigna or any Repricing Company. Cigna profits from improperly withholding these payments from Plaintiffs by transferring ERISA Cigna Plan trust assets to a Cigna controlled bank account (which it otherwise is entitled to do under contracts between the ERISA Cigna Plans and Cigna) and earning interest off of funds that are rightfully Plaintiffs’ under the ERISA Cigna Plans. Cigna also embezzles or converts ERISA Cigna Plan trust assets by charging the ERISA Cigna Plans improper “cost-containment” fees.”

The complaint goes on to allege that CIGNA’s second scheme to defraud involves its conspiring with the Repricing Companies to “underpay Plaintiffs’ Cigna Claims via a euphemistically named “cost-containment process” that it misrepresents to the Cigna ERISA Plans as a cost-savings mechanism to save the Cigna ERISA Plans money on out-of-network claims administration (the “Repricing Reduction Scheme”).”

Plaintiffs allege that through this scheme, every out-of-network claim is sent through the wires to a Repricing Company where the Repricing Company recommends to CIGNA that CIGNA pay a deeply slashed reimbursement rate. CIGNA invariably adopts that recommendation and processes the claim for (under)payment. Additionally, the complaint alleges that “Cigna’s contracts with the Cigna ERISA Plans falsely state that this process is only applied to claims for which the Repricing Company has an existing contract with an out-of-network provider. Cigna uses these gross misrepresentations as cover for its embezzlement or conversion of ERISA Cigna Plan trust assets in the guise of cost-containment fees based on a percentage of the “savings.” Cigna then pays a commission to the Repricing Companies that is similarly based on a percentage of “savings.”

According to Plaintiff’s allegations, CIGNA’s third scheme to defraud involves its false and inconsistent statements on CIGNA-issued EOBs and is referred to as the “Contradictory EOB Scheme”. When processing a claim by an out-of-network provider, the suit alleges, “Cigna will state on an ERA or EOB issued to a healthcare provider (a “Provider EOB”) that the amounts wrongfully retained by Cigna are not covered under the terms of the pertinent Cigna ERISA Plan or are subject to certain “adjustments” that are inconsistent with the terms of the Cigna ERISA Plans. But on the EOBs issued to the Cigna Subscribers for the same claims (the “Patient EOB”), Cigna will report completely different information. Cigna may falsely state that Plaintiffs are either contracted with Cigna to accept certain rates, or have agreed with Cigna or a Repricing Company to accept a “discount;” both complete fabrications.”

By way of the example provided in the complaint, it appears CIGNA has told the provider:

“the unlucky Cigna Subscriber owes it $60,316.07 as the amount not covered under the Subscriber’s Plan, but has told the Subscriber that he/she owes the provider only $895.25 because Cigna negotiated a 98% discount with the provider. In doing this, Cigna misrepresents to Cigna Subscribers that the amounts improperly adjusted by Cigna are “discounts.” This misrepresentation appears on most Cigna Claim Patient EOBs.”

The suit alleges CIGNA’s fourth scheme to defraud involves its conspiracy with the Repricing Companies to force out-of-network providers like Plaintiffs to enter into negotiations for payment of valid claims, with the goal of either coercing or wearing down the providers so they accept drastic underpayments for the claims (the “Forced Negotiations Scheme”). In conspiracy with CIGNA, the Repricing Companies, such as Zelis or Medical Audit & Review Solutions (MARS), send offer letters through the mails designed to intimidate and coerce out-of-network providers such as Plaintiffs to accept the settlement offers. In some instances, the Repricing Companies will threaten that the services provided to the Cigna Subscriber will not be covered at all, or that they will be reimbursed at a percentage of the Medicare rate. And, as expected, the Pricing Companies will reimburse the providers even grossly insufficient amounts only if the provider waives all rights to additional payment.

According to the complaint, “the following is an example of Cigna’s Forced Negotiations Scheme, “whereby a provider Plaintiff rejected an offer of payment for $30,550 of total incurred charges of $41,680 from MARS, a Repricing Company contracted by Cigna. Once the provider refused the settlement offer, Cigna processed the claim, improperly misstated that the Cigna Plan covering the Cigna Subscriber only paid a percentage of Medicare, and reimbursed only $1,858.55, or 4.5% of the total incurred charges for the services rendered by the provider Plaintiff.”

“Through these four schemes, Cigna improperly deprives Plaintiffs and the Cigna ERISA Plans of funds and profits by engaging in any or all of the following conduct, among others: (1) embezzling and/or converting the amount characterized as a “discount” on the Patient EOB that is rightfully due and owing to the Plaintiffs under the terms of the Cigna ERISA Plans; (2) earning interest on these amounts, and (3) wrongfully profiting through embezzlement and/or conversion of ERISA Cigna Plan trust assets based on cost containment fees calculated as a percentage of the “discounted” amount.”

-According to court records

All ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases. For years, Cigna’s processes have been a thorny issue for out-of-network providers across the nation and now, self-insured plans are starting to feel the pain of these potentially illegal practices.

Medical providers must be proactive and adopt compliant practices and policies. Health plans must also be proactive in validating that plan assets are used to pay for their member’s medical expenses or otherwise get returned to their plan, and not applied to cover shortfalls in another plan.

Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.

On January 15, 2019, in what turned out to be a belated Christmas gift for patients, out-of-network medical providers and self-insured health plans, the 8^th Circuit Federal Appeals Court stood with out-of-network medical providers, ruling they have standing to sue opposing UnitedHealth’s “cross-plan offsets”- by affirming the district court and opining:

“Because United’s interpretation of the plan documents is not reasonable, we affirm the district court’s grant of partial summary judgment to the plaintiffs.”

This bellwether appellate court decision undisputedly strikes a death blow to the collective, industry standard, practice of “cross-plan offsetting” and has national implications for patients, medical providers and self-insured health plans.  As we have written about before, the No. 1 health care claims denial in the country is “overpayment” recoupments through “Cross-Plan Offsets”; correspondingly, the No.1 hidden cost for Self-Insured health plans, is “Overpayment” recoupment through “Cross-Plan Offsets” and subsequent embezzlement of plan assets as UnitedHealth Group continues to see record revenues and earnings year after year.

With the new legal guidance this landmark case provides, self-insured plan sponsors, like AT&T and Gap Inc. may be held accountable for allowing United to engage in likely ERISA violations such as embezzlement, conversion, self-dealing and breach of fiduciary duty.

According to industry estimates, the total dollar amount at issue nationwide could be as high as 1/3 of total claim expenditures annually. Successful industry overpayment recoveries have reached into the trillions of dollars nationwide over the past decade and involve many large carriers as well as many of the nation’s biggest self-insured health plans such as Apple, JP Morgan Chase and Amazon.  Thus recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for many of the nation’s largest insurers. While there is a need for anti-fraud initiatives in healthcare today, it is critical that every health plan and claims administrator comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties.

This 8^th Circuit Court of Appeals decision, along with the recent Supreme Court decision in Montanile, should act as a wake-up call to all self-insured health plans for potential rewards in the trillions of dollars in plan assets recovery for all self-insured ERISA plans nationwide, from cross plan overpayment recoupments and offsets done by all plan TPAs.

Insurers and Health Plans must comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar.

In affirming the district court’s ruling, the 8^th Circuit rejected United’s argument that Dr Peterson lacked authority to sue as an authorized representative of his patients.  The appellate court also affirmed the district court’s ruling regarding offsets, where all of the plan documents that United cited explicitly authorized same-plan offsetting; and not one of those plans authorized cross-plan offsetting.

The appeals court further posited:

“To adopt United’s argument that the plan language granting it broad authority to administer the plan is sufficient to authorize cross-plan offsetting would be akin to adopting a rule that anything not forbidden by the plan is permissible.”

According to court records, “United’s assertion that it has the authority to engage in cross-plan offsetting can hardly be called an interpretation because it has virtually no basis in the text of the plan documents.”

The appeals court also maintained, that regardless of whether cross plan offsetting violates ERISA, it is at the very least, a questionable practice. Taking into consideration the fact that there is no plan language authorizing cross-plan offsetting, the appeals curt ultimately concluded that United’s interpretation is not reasonable.

As we have mentioned many times before, all ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases. Health plans must be proactive in ensuring benefits are adjudicated and ultimately paid solely based on the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Medical providers must be also proactive and adopt compliant practices and policies. Patients must understand their benefits plans and their rights as allowed under ERISA.

Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.

In a  Significant Ruling for All Plan Sponsors, Insurers and Medical Providers, the Seventh Circuit Court of Appeals Sides With Medical Provider; Rules Plan Must Provide Third Party Repricing Documents & Methodologies Relied Upon by Plan to Determine “Usual, Reasonable and Customary Rates” and Medical Provider is Eligible for Statutory Damages; “Must be a Beneficiary”

The case is based on very common fact patterns where an out-of-network medical provider verified benefits for the patient of an ERISA governed plan, confirming benefits would be paid at the “usual, reasonable and customary rate”. Before performing services the patient assigned the provider rights under the plan to “pursue claims for benefits, statutory penalties, [and] breach of fiduciary duty ….” The provider then performed services expecting a certain level of reimbursement. When the Plan failed/refused to pay the expected amount, the medical provider appealed for, among other things, the SPD and documents, rate tables and methodologies used to support her payment.

After 6 months, the Plan responded that a third party vendor, data iSight, priced the claim and the provider should reach out to them to try and negotiate a higher amount. The provider decided she had exhausted the administrative remedy, under the premise that 6 months was “unreasonable” and sued for: Damages for Unpaid Benefits, 29 U.S.C. § 1132(a)(1)(B); Breach of Fiduciary Duty, 29 U.S.C. § 1132(a)(3) and Statutory Penalties, 29 U.S.C. § 1132(c)(1). The district court dismissed her complaint. However, the 7th Circuit court disagreed, holding that: “Dr. Griffin adequately alleged that she is eligible for additional benefits and statutory damages, we affirm the judgment only as to Count 2, vacate the judgment as to Counts 1 and 3, and remand Counts 1 and 3 for further proceedings.”

Case info: W.A. Griffin v. TEAMCARE, Central States Health Plan 7th Cir., and TRUSTEES OF THE CENTRAL STATES Case No. 182374 US District Court of Appeals Seventh Circuit

On the first count, Damages for Unpaid Benefits, 29 U.S.C.§ 1132(a)(1)(B) the court held:

“Dr. Griffin challenges the district court’s ruling that she did not state a claim for unpaid benefits. She argues that she adequately plead that the plan covered the medical treatment she provided T.R. and that she did not need to cite in her complaint a plan provision establishing coverage at the amount she billed. We agree. “[P]laintiffs alleging claims under 29 U.S.C.§ 1132(a)(1)(B) for plan benefits need not necessarily identify the specific language of every plan provision at issue to survive a motion to dismiss under Rule 12(b)(6).” Innova Hosp. San Antonio, Ltd. P’ship v. Blue Cross & Blue Shield of Ga, Inc., 892 F.3d 719, 729 (5th Cir. 2018).

The court goes on to explain, that the Plan’s argument, “Requiring that Dr. Griffin to allege provisions to support something that was undisputed, -the existence of coverage-was error.” The court further noted that because Dr. Griffin was paid “something“, it was plausible the services were covered. 

Additionally, the court reasoned that requiring Dr. Griffin to name a specific plan provision entitling her to higher reimbursement, was not necessary, since she clearly alleged she was not paid the usual, reasonable and customary amounts, consistent with section 1109 of the plan. According to the court:

To require her to be more specific is to turn notice pleading on its head. Indeed, as discussed later, Dr. Griffin did not have the information necessary to allege with more detail where the plan’s calculation of the usual and customary rate went astray.”

On count 3, Statutory Penalties, 29 U.S.C. § 1132(c)(1), the court explains why Dr. Griffin could be entitled to statutory penalties :

“Finally, Dr. Griffin argues that as T.R.’s assignee, she is a beneficiary of the plan, eligible for statutory penalties based on Central States’s failure to provide the documents she requested within 30 days. See 29 U.S.C. §§ 1024(b)(4), 1132(c)(1). Central States takes the position, supported by one citation to a district-court decision, that an assignee does not step into a beneficiary’s shoes for the purpose of enforcing statutory penalties. See Elite Ctr. for Minimally Invasive Surgery, LLC v. Health Care Serv. Corp., 221 F. Supp. 3d 853, 860 (S.D. Tex. 2016). Thus, Central States concludes, it could not be liable for not timely providing documents to Dr. Griffin.

But in Neuma, Inc. v. AMP, Inc., we remanded to the district court for a determination of whether penalties should be awarded to an assignee under section 1132(c)(1), thus assuming that assignees could seek penalties. 259 F.3d 864, 878–79 (7th Cir. 2001). Central States’s position is inconsistent with our prior precedent and is contrary to the purposes of a plenary assignment of rights under the plan. ERISA defines “beneficiary” as “a person designated by a participant … who is or may become entitled to a benefit [under an employee benefit plan].” 29 U.S.C. § 1002(8). An assignee designated to receive benefits is considered a beneficiary and can sue for unpaid benefits under section 1132(a)(1)(B)—something the plan does not dispute. See Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991). Bringing that suit (or an administrative appeal) requires access to information about the plan and its payment calculations— here, how Central States determined the usual, reasonable, and customary rate. Mondry, 557 F.3d at 808; see also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 118 (1989) (disclosure ensures that “the individual participant knows exactly where he stands with respect to the plan” (citing H.R.Rep. No. 93–533, p. 11 (1973), U.S.Code Cong. & Admin. News 1978, p. 4649)).

It follows that Dr. Griffin also must be a beneficiary able to sue when she is denied requested information.

Central States argued that even if Dr. Griffin is a beneficiary, she still did not state a claim for statutory damages because it sent her the summary plan description, and ERISA did not require it to provide either Data iSight’s fee schedules and rate tables or its contract with Blue Cross Blue Shield. The court shot down the Plans arguments regarding the disclosure of documents as  “meritless“, based on the fact the Plan ultimately provided Dr. Griffin the SPD, albeit 6 months late, and because the Plan readily admitted that it used Data iSight’s figures to calculate the payment which constituted, in part, the Plan’s “pricing methodology” and the basis for the payment. 

This case illustrates the importance of ERISA compliance and properly disclosing all relevant materials used to determine benefits payments. It is clear that Plan Administrators and Fiduciaries should respond to any appeals and document requests in accordance with section 104 (b) (2) and 104 (b) (4) of ERISA, and pursuant to the interpretation of “plan document” from DOL Advisory Opinions, 96-14A, which states:

“it is the view of the Department of Labor that, for purposes of section 104 (b) (2) and 104 (b) (4), any document or instrument that specifies procedures, formulas, methodologies, or schedules to be applied in determining or calculating a participant’s or beneficiary’s benefit entitlement under an employee benefit plan would constitute an instrument under which the plan is established or operated, regardless of whether such information is contained in a document designated as the “plan document”. Accordingly, studies, schedules or similar documents that contain information and data, such as information and data relating to standard charges or calculating a participant’s or beneficiary’s benefit entitlements under an employee benefit plan would constitute “instrument under which the plan is… operated.“

Plan Administrators, fiduciaries, TPAs and medical providers all should also look to the DOL for guidance on the matter, specifically, DOL FAQs About The Benefit Claims Procedure Regulation:

FAQ B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

What documents will be required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decision making. See 65 FR at 70252… the department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant’s claim.

For nearly a decade, Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. Now with the Supreme Court’s guidance on ERISA anti-fraud protection, we are ready to assist all medical providers and self-insured plans recover billions of dollars on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs click here.