Category Fraud

In a monumental decision for Out-Of-Network Providers nationwide, on June 1, 2016, U.S. District Judge Kenneth Hoyt of the Southern District of Texas ruled against Cigna and ordered the insurer to pay $11.4 million to cover underpaid claims and, an additional $2.3 million in ERISA penalties, in perhaps the first instance where a claims administrator was ordered to pay ERISA penalties to a medical provider.

U.S. District Judge Hoyt, after a nine day bench trial, ruled that Cigna’s claims of overpayment and fee forgiveness fraud failed, as did its arguments against Humble Surgical Hospital’s (Humble) ERISA claims. According to court records:

“Based on the analysis and reasoning set forth herein, the Court determines that Cigna’s claim(s) for reimbursement of overpayments made pursuant to ERISA and/or common law fail, as a matter of law;”.

The court goes on to say, “The Court further concludes that Cigna’s defenses to Humble’s ERISA claims fail and Humble is entitled to recover damages under § 502(a)(1)(B)¹ and penalties under § 502(c)(1)(B).”

Case info: Connecticut General Life Insurance Co. et al. v. Humble Surgical Hospital, LLC, (Cigna v. Humble) Case number 4:13-cv-03291, in the U.S. District Court for the Southern District of Texas. Entered June 01, 2016

This decision represents a major paradigm shift in Out-of-Network benefits and claim processing for all health care providers and health plans in the nation and establishes clear guidance on critical issues such as cross-plan offsetting, Cigna’s fee forgiveness protocol, SIU practices and ERISA disclosure requirements. The decision sheds light on the payor initiated “out-of-network fraud” enigma and is one of a series of critical court decisions which address the typical scenario for out-of-network providers: payors refusal to pay claims which leads to “catch-all” out-of-network lawsuits seeking total overpayment refunds of claims previously paid to providers , all based on broad and vague allegations of fraud.

At its core, this court decision provides the entire managed care and plan benefits industry with basic, yet comprehensive legal reasoning and essentially offers a roadmap to addressing modern-day healthcare litigation.

In his ruling, U.S. District Judge Kenneth Hoyt wrote that the health insurer initiated the litigation seeking $5.2 million in restitution and filed claims against the hospital, alleging it engaged in fraudulent out-of-network billing practices, which resulted in “overpayments”.  

Humble denied the allegations and countersued Cigna for (a) nonpayment of current member/patient’s claims, underpayment of certain claims, and delayed payment of all claims in violation of ERISA § 502(a)(1)(B); (b) failure to provide a full and fair review under ERISA; (c) breach of fiduciary duties of loyalty and care under ERISA; and (d) penalties pursuant to ERISA § 502(c,), according to the court documents.

This landmark decision has the potential to save millions of Americans from medical bankruptcy. Additionally, it illustrates one of the most pressing issues facing out-of-network patients and providers across the nation.  Payor initiated Deductible and Co-Pay waiver claim denials and overpayment recoupments or offsets is the No. 1 out-of-network claim denial, contributing to increases in the number of personal bankruptcies. According to many recent surveys, reports and case studies, one in five American adults will struggle to pay medical bills. In fact, medical bills are the leading cause of personal bankruptcy, affecting even those with health insurance. Subsequently, approximately 76% of Americans paid for out-of-network coverage through their employer-sponsored health plans, according to a December 2013 National Composition Summary from DOL Bureau of Labor Statistics. It’s clear that the epidemic of out-of-network deductible balance billing wrongly imposed by ERISA plans has inevitably contributed significantly to unexpected medical bills and personal bankruptcy.

According to the court records, the evidence clearly demonstrated that Cigna flagged Humble’s claims, for SIU processing, never told the hospital and “did not –and by its conduct—could not provide a reasonable meaningful opportunity for a full and fair review of its decision regarding Humble’s claims.”

“Cigna’s method for processing Humble’s claims was simply disingenuous and arbitrary, as it was focused more on accomplishing a predetermined purpose — denying Humble’s claims,”

Cigna argued that it could assert its claim based on the plans “overpayment” provisions, according to the court documents: “Here, Cigna relies on a provision within many of its plan documents entitled, “Recovery of overpayment,” which provides, “When an overpayment has been made by Cigna, Cigna will have the right at any time to: recover that overpayment from the person to whom or on whose behalf it was made; or offset the amount of that overpayment from a future claim payment.”

However, the court rejected that argument, “However, this provision, standing alone, is insufficient to create a lien or constructive trust as it does not: mention the words “lien” or “trust”; state that any overpayment shall constitute a charge against any particular proceeds; give rise to a security interest in such proceeds; even suggest that a trust is being sought for Cigna’s and/or the plan’s benefit on any particular provider payments; or advise of the need for any particular provider to preserve, segregate or otherwise hold such funds or proceeds in trust…Therefore, the Court determines that Cigna has failed to establish that the “Recovery of Overpayment” provision contained in its plan documents creates a constructive trust or equitable lien by agreement.”

Of critical importance is the court’s analysis and decision on Cigna’s “tracing” arguments as well. According to court records, “Cigna is not entitled to equitable restitution of any alleged overpayments based on the “tracing” method, as it cannot identify any specific res separate and apart from Humble’s general assets. See Health Special Risk, 756 F.3d at 366 (reasoning that “Sereboff did not move away from any tracing requirement; it distinguished between equitable liens by agreement—which do not require tracing—and equitable liens by restitution—which do.”). As the Court explained in Knudson, the basis for petitioners’ claim is “that petitioners are contractually entitled to some funds for benefits that they conferred. The kind of restitution that petitioners seek, therefore, is not equitable…but legal—the imposition of personal liability for the benefits that they conferred upon respondents.”Knudson, 534 U.S. at 214.”

The court also weighed in on Cigna’s “fee forgiving “argument, “The plan language does not support denying Humble’s claims based on waiver, due to Humble’s alleged fee-forgiving policy, or, in Cigna’s own novel view, pursuant to a proportionate share analysis.”

Next, the court weighed in on Cigna’s arguments that Humble’s claims were not covered by the plans based on Exclusionary language in the plan documents: “Cigna has not offered evidence that any of the services billed by Humble were not covered by the plans or that they were improperly billed Therefore, Cigna’s interpretation of the “exclusionary” language as rejecting covered services, was improper and violative of the plans’ terms.” “For these reasons, the court determines that Cigna improperly applied the exclusionary language contained in the plans and, in the process, abused its discretion, especially since Cigna admittedly has never used the exclusionary language to reject covered services before and was relentless in engaging in an arbitrary manner with regard to Humble and its claims.”

“Finally, the evidence suggests that Cigna failed to explain to the plan sponsors and/or members/patients/insureds that it was applying a proportionate share analysis to Humble’s claims. Thus, Cigna breached its fiduciary duty when it strayed from the terms of the plans and interpreted its ASO Agreements with plan sponsors as conferring authority upon it that was not specifically set forth in and/or was contrary to the various plans.”

Essentially, CIGNA was “Checkmated” on all their arguments

Ultimately, the court ruled against Cigna on every major argument and consistent with previous appellate court decisions, provides step by step guidelines on whether Cigna’s “fee forgiveness protocol” and “overpayment offsets” are legally correct,
“Therefore, the Court holds that Cigna’s claims processing procedure and appeals review process violated ERISA and concomitantly, its fiduciary duty of care and loyalty to the members/patients and the plan sponsors. Indeed, Cigna earned handsome returns as a result of its aberrant and arbitrary claims processing methodology. The evidence establishes that it was subject to a double heaping from the plan sponsors’ pockets—first, in receiving a fee for claim processing services–and second, in receiving fees based on “savings,” regardless of how garnered. In the process, however, Cigna forfeited its objectivity and violated its fiduciary duties of care and loyalty by making benefit determinations that did not consider UCR or conform to the plans’ terms in violation of ERISA.”

The court also made an interesting observation regarding Cigna’s third party vendor negotiation and Cigna’s claim that Humble misrepresented the charges: “Cigna’s assessment of Humble’s disclosure duties is fallacious, at best. The fallacy is manifested in several respects. First, Cigna has not publicly disclosed its ASO Agreements with plan providers to any of its members/patients or third-party healthcare providers because it considers such documents to be proprietary as well. To this end, Cigna cannot expect unfettered access to contracts maintained by third-party healthcare providers without permitting them unrestricted access to the same. To require otherwise would be to reward Cigna’s duplicitous conduct.”

Finally, Humble claimed that it was entitled to ERISA penalties, arguing “Cigna’s refusal to provide such plan documents placed it at a serious disadvantage–both in defending against Cigna’s claims for overpayment and in recovering on its own claims for underpayment. “

The court agreed and issued a substantial penalty on Cigna for failing to Disclosure the Plan Terms reasoning: “The Court is of the opinion that, after October 2010, Cigna became more than a third-party “claims administrator” because of the manner in which it processed Humble’s claims. While the evidence establishes that Cigna is not the “designated” or named plan administrator it, nevertheless, became the de facto plan administrator by way of its conduct and admissions under an ERISA-estoppel theory.”

The court concluded:  “Without plan documents, Humble could not know whether Cigna was even processing its claims pursuant to the terms of the plans…In these respects, Cigna interfered with and frustrated the contractual relationship between the plan sponsors and the members/patients by imposing a methodology for claim processing that was not part of any plan.

In essence, Cigna “hijacked” the plan administrator’s role and subverted it for its personal benefit. Indeed, Cigna’s unprecedented claims processing methodology and incessant related acts were extraordinary acts of bad faith.”

All Out-of-Network providers and self-insured health plans must understand this landmark case in order to protect members and beneficiaries from inappropriate medical debt and bankruptcy and to safeguard and protect self-insured health plan assets from possible conversion or abstraction.  Education and understanding of this landmark court decision will bring peace, harmony and compliance to the healthcare industry, especially when health plans are determined to contain healthcare costs and healthcare providers are dedicated to providing all patients with high quality, affordable healthcare when exercising their freedom of choice and right to seek out-of-network care.

For over 6 years, 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.

UHC administered self-insured health plan, AT&T, sued in federal court for embezzlement, self-dealing in medical claims overpayment offset dispute.

On June 1, 2016, in the southern district of Texas Federal Court, United HealthCare administered self-insured ERISA plan, AT&T Inc. and its Plan Administrator Larry Ruzicka were sued in federal court. According to the complaint: “This dispute arises out of Defendants’ ongoing and systematic ERISA violations consisting of an elaborate scheme to abstract, withhold, embezzle and convert self-insured Plan Assets “.

An almost identical separate suit was filed against another United HealthCare administered health plan, GAP Inc. less than 30 days before this case was filed.  According to industry experts, more and more CEO’s, CFO’s and Plan Administrators are exposed to tremendous liabilities due to poorly managed or “Head in the Sand” monitoring practices. As we have written about and predicted, this is evidence of the growing trend of self-insured health plans being exposed to tremendous liability by TPAs.

One of the serious problems these cases present to the self-insured health plans is inaccuracies on the Form 5500/Tax filings. ERISA requires IRS Form 5500 reporting to be accurate. AT&T, GAP Inc. and others may be reporting incorrect amounts on direct and indirect compensation, for example, based on the alleged facts of these cases.

These cases also illustrate an ironic twist, in many cases, the ASO agreements prohibit the plan from auditing the claims that the TPA’s are paying on behalf of the self-insured plan, which on its face, seems to be a remarkably absurd clause that any plan sponsor would agree to sign.

The Court Case Info: RedOak Hospital, LLC v. AT&T Inc., AT&T Savings and Security Plan and Larry Ruzicka, in the United States District Court for the Southern District of Texas, Houston Division, Case 4:16-cv-01542, Filed on 06/01/16.

According to court documents, REDOAK Hospital Plaintiff filed a DOL EBSA Complaint on the alleged overpayment offset by the Defendants Plan, and the plan’s co-fiduciary, UHC, prior to filling this ERISA lawsuit, alleging:

“This dispute arises out of [AT&T’s]ongoing and systematic ERISA violations consisting of an elaborate scheme to abstract, withhold, embezzle and convert self-insured Plan Assets that were approved and allegedly paid to Plaintiff for Plaintiff’s claim, to purportedly, but impermissibly, satisfy a falsely alleged overpayment‖ for another stranger claim, especially when the stranger is a plan beneficiary of a fully-insured plan that is insured by the Plan’s co-fiduciary, United Healthcare (hereinafter, “United”).[AT&T] knew or should have known that the Plan’s overpayment recovery provisions cannot be triggered until there is an allegation of overpayment by the Plan to the Plan Beneficiary subject to this action, and that converting the Plan Assets by a fiduciary or co-fiduciary of the Plan, in this case United, to the use of another, and ultimately its own use, to pay to its own account is absolutely prohibited under ERISA statutes. [AT&T] and United have conspired and engaged in many other embezzlement schemes, including, but not limited to, making deductions on entitled claim payments through the misrepresentation that a Viant/Multiplan contract is in place with Plaintiff; this action is only challenging the cross-plan offset embezzlement scheme discussed in detail below.”, according to court documents.

According to RedOak attorney Ebadullah Khan, this and the Gap Inc. case represent the first of many more cases the hospital intends to bring for the same alleged violations. Kahn told Law360, “Prior to seeking judicial review for this case, RedOak Hospital had exhausted any and all internal/administrative appeal requirements,” Khan went on to say, “The cross-plan offset practice at issue in this case is the most common form of denial for RedOak Hospital, and as a result RedOak Hospital is preparing to file approximately 100 more cases similar to this AT&T complaint.”

As we have accurately predicted, 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 and until the courts offer guidance on the practice of cross plan offsetting, we will continue to see many more cases such as these from providers all across the country. Additionally, should the courts weigh in and bar the practice, will self-insured plan sponsors, like AT&T and Gap Inc. be held liable for these ERISA violations and be removed from serving as fiduciaries.

There are billions of healthcare dollars at stake, according to industry estimates. Overall, overpayment recoveries initiated by the large carriers have reached into the billions of dollars over the past 5 to 7 years. Yet, self-insured health plans have not reaped the benefits of successful overpayment recoupments.  

Consequently, recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for insurers. While there is a need for anti-fraud initiatives in healthcare today, it is critical that every health plan comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties. 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.

Over the past 6 years, Avym has closely followed decisions from the Supreme Court and federal appeals courts on ERISA prohibited self-dealing against ERISA plan TPA’s for managed care savings.

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 click here.

On May 10, 2016, in the southern district of Texas Federal Court, United HealthCare administered self-insured ERISA plan, GAP Inc. and its Plan Administrators, Cynthia Radovich and Lesley Dale, were sued for alleged ERISA plan assets “self-dealing and embezzlement”, deceptively concealed through an “illegitimate recoupment scheme that financially rewards United for wrongfully recouping valid benefits”.

As we have written about before and as part of a growing trend, another self-insured health plan is being sued for alleged embezzlement and self-dealing. United HealthCare administered self-insured ERISA plan, GAP Inc. and plan administrators, Cynthia Radovich and Lesley Dale, were sued by out-of-network (OON) hospital, Redoak Hospital, LLC, for alleged ERISA plan assets “Self-dealing and embezzlement”, based on its co fiduciary, United HealthCare’s (UHC) alleged cross plan overpayment offset practices, according to court documents.

This extraordinary and multifaceted ERISA lawsuit will impact all ERISA self-insured plans, employer sponsored plan employees, and healthcare providers, resulting in uncertainties for every healthcare claim. Overpayment refund demands and cross-plan offset practices are the nation’s most insidious claim denials and may ultimately determine the fate of the entire U.S. ERISA healthcare system. 

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 Court Case Info: Redoak Hospital, LLC v. Gap Inc., Gap Inc. Health and Life Insurance Plan, Cynthia Radovich, and Lesley Dale,  in the United States District Court for the Southern District of Texas, Houston Division, Case 4:16-cv-01303, Filed on 05/10/16.

According to court documents, Redoak Hospital Plaintiff filed a DOL EBSA Complaint on the alleged overpayment offset by the Defendants Plan, Gap, Inc, and the plan’s co-fiduciary, UHC, prior to filling this ERISA lawsuit, alleging:

 “This dispute arises out of Defendants’ ongoing and systematic ERISA violations consisting of an elaborate scheme to abstract, withhold, embezzle and convert self-insured Plan Assets that were approved and allegedly paid to Plaintiff for Plaintiff’s claim, to purportedly, but impermissibly, satisfy a falsely alleged ―overpayment‖ for another stranger claim, especially when the stranger is a plan beneficiary of a fully-insured plan that is insured by the Plan’s co-fiduciary, United Healthcare (hereinafter, ―United‖). Defendants knew or should have known that the Plan’s overpayment recovery provisions cannot be triggered until there is an allegation of overpayment by the Plan to the Plan Beneficiary subject to this action, and that converting the Plan Assets by a fiduciary or co-fiduciary of the Plan, in this case United, to the use of another and his own use, to ultimately pay to United’s own account is absolutely prohibited under ERISA statutes. Regardless, Defendants and United recklessly conspired, orchestrated and authorized to this kind of self-dealing and embezzlement even while being under active investigation by the Department of Labor and after repeated detailed alerts and notices from Plaintiff regarding the aforementioned.” according to the Court Documents.

In the Compliant, the Plaintiff makes the following:

 “COUNTS AGAINST DEFENDANTS:

The Plaintiff, as a statutory defined Claimant with a valid and unchallenged Assignment of Benefits, is entitled to ERISA rights ―to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review‖ after Plaintiff has legally and administratively exhausted any and all appeal remedies.14 Therefore the Plaintiff is entitled to pursue Benefit claims: (i) to recover benefits due for already approved claims but abstracted and converted by the Defendants’ co-fiduciary, United; (ii) breach of fiduciary duty claims under 29 U.S.C. § 1132(a)(2) in violation of 18 U.S.C. § 664, 29 U.S.C. § §1104, §1105, §1106(b)(1)(d); injunctive relief to enjoin the Defendants from engaging in prohibited transaction 29 U.S.C. § 1132(a)(3); and (iii) injunctive relief to permanently remove the Defendants Cynthia Radovich and Lesley Dale from serving as fiduciaries to the Plan permanently under 29 U.S.C. § 1132(a)(3).” according to the Court Documents.

Avym Corp. announces a timely new ERISA Compliance Forum on May 17, 2016. At this new ERISA Compliance Forum, through Pittsburgh Business Group on Health (PBGH) Legislative Updates Forum, we will brainstorm, assess and demystify the potential impact of this unprecedented ERISA lawsuit for all interested parties.  PBGH is “The only employer-led, non-profit coalition of large, mid-size, and small organization representing various business segments including private and public employers, government and academia.”

According to industry estimates, the total dollar amount at issue nationwide is tremendous. Successful industry overpayment recoveries have reached into the billions of dollars nationwide over the past 5 to 7 years and involve many large carriers.  Thus recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for some insurers. While there is a need for anti-fraud initiatives in healthcare today, it is critical that every health plan comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties. 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.

Over the past 6 years, Avym has closely followed decisions from the Supreme Court and federal appeals courts on ERISA prohibited self-dealing against ERISA plan TPA’s for managed care savings.

This latest lawsuit against a self-insured plan and plan administrators, for alleged plan assets embezzlement by the ERISA plan’s third party claim administrator (TPA), comes less than 6 months after a Cigna administered self-insured plan was sued in federal court for similar violations.

The Court Case info: True View Surgery Center One L.P., v.Chicago Bridge And Iron Medical Plan, Chicago Bridge And Iron Company, And Dennis Fox, Case #: 3:15-CV-00310, filed on Oct. 29, 2015, in the United States District Court For The Southern District of Texas.

In the Oct 29, 2015 lawsuit filed by OON provider True View Surgery Center, against the Cigna administered ERISA plan, the Plaintiff alleged in part:

“Specifically, in spite of the glaring conflict of interest and inherent breach of fiduciary duties, Defendants agreed to an unlawful compensation structure that financially rewards Cigna for wrongfully denying and underpaying benefits claims. Under this backdrop, together Defendants and Cigna concocted an intricate scheme to transfer and embezzle plan funds. Transfers are first concealed by processing out-of-network claims under a fabricated Preferred Provider Organization (PPO) “contractual obligation,” even though Defendants and Cigna are fully aware that no such contract exists. Then, Defendants and Cigna knowingly implemented a system to willfully and wrongfully refuse payments to the out-of-network provider under a sham “fee-forgiveness” protocol. As a result of the wrongful claims denials, the transferred plan funds are ultimately misappropriated by Cigna, who then fraudulently pays itself with the plan funds, falsely declaring the embezzled funds as compensation generated through managed care and out-of-network cost containment “savings,” when in truth the claims were never paid and the plan beneficiaries were left exposed to personal liability for their unpaid medical bills.”

On Oct 21, 2015, in a separate but similar lawsuit filed by an ERISA plan against a separate ERISA plan TPA, the Plaintiff alleged in part:

“MagnaCare represented to Plaintiffs in a written contract between the parties that providers of diagnostic laboratory and ancillary services had “accepted” a “fee schedule” which included a “management fee” for MagnaCare. In fact, the providers had never “accepted’ a fee schedule containing a “management foe” for MagnaCare. Rather, the providers had agreed to a fee schedule, which was a fraction of the amounts collected by MagnaCare from Plaintiffs. MagnaCare – without disclosure to Plaintiffs or the providers – simply misappropriated the difference between what Plaintiffs paid MagnaCare and what MagnaCare negotiated to pay the providers.” 

Court case info: UNITED TEAMSTER FUND, et al v. Magnacare Administrative Services, LLC et al, Case 1:13-CV-06062-WHP-FM, First Amended Complaint (FAC), filed on Oct. 29, 2015, original Complaint, filed on august 27, 2013,  in United States District Court Southern District Of New York.

These lawsuits come on the heels of the Oct. 20, 2014 U.S. Supreme Court decision to deny all appeals on a BCBSM’s $6.1 million fraud judgment for 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.

On May 14, 2014, the federal appeals court (Sixth Cir. 2014) upheld the district court’s $6.1 million decision for Hi-Lex, a self-insured ERISA plan, against BCBSM for violating ERISA in prohibited transactions and fiduciary fraud, according to court documents.

Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, (SC Case #. 14-168, 6th Cir. Case #: 13-1773, 13-1859).

These cases together with the pending ERISA cases listed below, offer insight into the healthcare industry’s prevalent overpayment offset wars:  

Peterson, D.C. et al v. UnitedHealth Group Inc. et al, U.S. District Court, U.S. District of Minnesota (DMN) CIVIL DOCKET FOR CASE #: 0:14-cv-02101-PJS-BRT,

Riverview Health Institute v. UnitedHealth Group Inc. et al, U.S. District Court, U.S. District of Minnesota (DMN), CIVIL DOCKET FOR CASE #: 0:15-cv-03064-PJS-BRT

These new ERISA embezzlement cases are part of a growing trend consistent with the court’s Hi-Lex decisions. This lawsuit in particular should serve as a warning and wake up call for all Plan Administrators to continually monitor their TPAs in accordance with the Plan Administrator’s statutory fiduciary duties and to discharge its duties with respect to a plan solely in the interest of the participants for the exclusive purpose of providing benefits to them.

For over 6 years, 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 click here.

Federal judge allows ILWU-PMA, a self-insured health plan, to move forward in lawsuit against Cigna and Carewise for allegedly engaging in “prohibited transactions” and “self-dealing” by entering into “auto-discount agreements with providers for which it received a portion of the amount discounted”

As healthcare admin fees increase, more and more self-insured health plans are looking to engage in out of network “cost containment” or third party “repricing agreements” with out of network provider claims, in an effort to lower costs or save money.However, plaintiff’s allegations in this and other recent cases, shed light on possible abuses that take place disguised as legitimate practices.

On Dec 22, 2015, a Northern District of CA Federal court ruled in favor of a self-insured health plan and allowed an ERISA lawsuit to go forward against Cigna and third party fee negotiating company, Carewise (formerly called SHPS Health Management Solutions, Inc.). Cigna and Carewise were sued by the ILWU-PMA Welfare Plan Board of Trustees and ILWU-PMA Welfare Plan, for alleged ERISA “prohibited transactions” and “self-dealing”

Case info: ILWU-PMA Welfare Plan Board of Trustees v. Cigna and Carewise, U.S. District Court for the Northern District of CA Civil Docket for Case #:C15-cv-02965-WHA, Filed 12/22/2015.

This lawsuit against Cigna in ERISA healthcare claims disputes comes on the heels of another recent lawsuit against a different Cigna administered self-insured ERISA plan client, CB&I and its Plan Administrator, Dennis Fox, who were sued for alleged ERISA plan assets embezzlement, deceptively concealed through “fake PPO (CO) discounts” and Cigna’s “fee forgiveness protocol scam”.

TPA’s tactics of engaging in prohibited transactions, self-dealing or applying non-existent or “fake” PPO discounts can expose the plans and plan administrators to costly litigation as well as civil criminal liability. As these lawsuits become more prevalent, self-insured health plans should be aware of possible embezzlement or conversion of plan assets and act accordingly.

According to industry experts, and as illustrated in the Hi-Lex case, a BCBS survey was conducted and found that 83 percent of its self-insured clients were completely unaware of the hidden fees. Other documents revealed a course of conduct designed to conceal evidence of the company’s wrongdoing. Based on the foregoing, all self-insured health plans nationwide should look to recover at least $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 the private sector.

According to the court documents in the ILWU-PMA v. Cigna case:

“The Board’s…claims allege Carewise engaged in prohibited transactions under ERISA. Specifically, claims four and five allege that Carewise engaged in self-dealing as a plan fiduciary by entering into auto-discount agreements with providers for which it received a portion of the amount discounted”… “Moreover, by implementing auto-discounts, rather than negotiating claims on a case-by-case basis, Carewise received compensation for fee-negotiation services it never actually performed. Plaintiffs have adequately alleged that Carewise received unreasonable compensation for negotiation services it did not perform. Accordingly, Carewise’s motion to dismiss the plaintiffs’ sixth claim is hereby DENIED.”

The court goes on to say:

“The Board’s sixth claim alleges that Carewise engaged in a prohibited transaction in violation of Section 1106(a)(1)(C) of Title 29 of the United States code. Section 1106(a)(1)(C) generally prohibits transactions between an ERISA plan and a “party in interest” although Section 1108 allows such transactions for “services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid” for services rendered by the party in interest. Section 1002(14)(B) defines a “party in interest” as “a person providing services to [a] plan“

Interestingly, ILWU-PMA Coastwise Trustees, Cigna, TPA Zenith American Solutions and TC3 Health were all slapped with a class action lawsuit in mid 2015 for various ERISA violations. According to that complaint, the ILWU-PMA and Plan’s own independent fact finder confirmed there were “286,000 unprocessed claims” at one point and the “backlog became worse, with about 90,000 new claims each month” added to the backlog.  The suit also alleges that the plan attempted to  “delay processing of legitimate claims, increasing interest income for the Plan’s fund” as well as create the “misimpression that the PMA Trustees have been diligent in the exercise of their fiduciary obligations”, according to court documents.

In accordance with these lawsuits and national epidemic of self-insured health plan assets embezzlements, self-dealing and prohibited transactions, Avym Corporation (Avym) announces cutting edge, unconventional Fiduciary Overpayment Recovery programs for private self-insured health plans. In 2011 private health insurance funded approximately 33% and Medicare funded approximately 21% of the $2.7 trillion national healthcare expenditure. Approximately 82.1% of all large health plans (>500) are self-insured. Avym’s innovative new programs consist of:

• The Fiduciary Overpayment Recovery Specialists (FOR) training program which is designed for private self-insured plans.
• The Fiduciary Overpayment Recovery Contractor (FORC) program which is designed to create partnership networks nationwide to immediately offer FOR programs to self-insured plans.

These groundbreaking programs are unique and unlike any other traditional health plan overpayment auditing programs and are designed to recover alleged overpayments, regardless of the reason including allegations of fraud, that have been recouped by the TPA’s but have not been restored or refunded to the ERISA plan assets as required under ERISA statutes and fiduciary responsibilities.

Over the past 6 years, Avym has closely followed the decisions from the Supreme Court and federal appeals courts on ERISA prohibited self-dealing against ERISA plan TPA’s for managed care savings. These new ERISA embezzlement cases are just the initial impact of the court’s Hi-Lex decisions. This lawsuit in particular should serve as a warning and wake up call for all Plan Administrators to continually monitor their TPAs in accordance with the Plan Administrator’s statutory fiduciary duties and to discharge its duties with respect to a plan solely in the interest of the participants for the exclusive purpose of providing benefits to them.

Avym Corp. has been at the forefront and 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 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.

CMS Regulators fine carriers for giving Medicare Advantage private plan policyholders inaccurate information on costs, benefits and access to out-of network providers.

On July 14, 2015, Centers for Medicare and Medicaid Services slapped multiple insurers with fines for giving their policy holders inaccurate or incomplete and delayed information about benefits and costs including errors related to maximum out-of-pocket costs and situations in which policy holders could visit out-of-network providers.

All six letters were concerning Medicare Part D prescription drug benefits through the private Medicare Advantage plans. According to the recent 2016 Call Letter, CMS finalized its proposed reinforcement of existing rules to make certain plans are aware of their responsibility to maintain accurate directories, among other issues.

CMS also clarified its expectation that plans update directories in real time, and have regular, ongoing communications with providers to ascertain their availability and, specifically, whether they are accepting new patients or not

In the case of UnitedHealthcare, CMS regulators issued a $150,000 penalty because approximately 6,000 New York customers “received untimely information about their 2015 benefits in UnitedHealthcare’s CY 2015 ANOC documents.” The New York policyholders did not receive required information about increased premiums, cost-sharing, co-payments and deductibles until the first week of May — more than seven months after a Sept. 30 deadline. This at a time when United attributed a 13% jump in its 2nd quarter profits to the company’s Medicare and Medicaid plans.

Health Net AZ, which was recently acquired by Centene, was slapped with the largest fine of the group, nearly $350,000, for providing inaccurate information to approximately 14,000 policyholders. According to the letter, Health Net AZ had been warned about noncompliance before. In 2014, Health Net AZ received a letter of non-compliance for failing to accurately describe benefits and/or cost sharing information to its enrollees.

The additional 4 letters were sent to: Indiana University Health Plans, which was slapped with a $100,000 fine; Oregon based ATRIO Health Plans, which was slapped with approximately $70,000 in fines; Massachusetts based Fallon Community Health Plan, which was slapped with a $52,000 in penalties, and the Illinois based Carle Foundation, which was slapped with a $34,000 fine. The fines were based on various violations including incorrect information on out-of-network costs and when policyholders could access out-of-network providers.

Copy of CMS Announcement

Health Insurance Industry Watchdog and Others, Starting to See the Light

As more and more federal cases involving medical claim reimbursement disputes make their way through the courts, it is becoming increasingly clear that ERISA regulations will continue to pave the way for providers. However, ERISA can also pave the way for employers as well. Recently, a health insurance industry watchdog wrote about a very important development in the US Health Insurance Industry that I have been writing about since 2012. The case is Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan.

The details of the case are fairly simple. BCBS Michigan was the claims administrator for multiple self-insured plans and had been charging the plans “hidden fees” by essentially adding markups to the medical claims submitted to the self insured plans. The problem was that BCBS Michigan never disclosed the markups.

“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.”

In May of 2014, the 6th Circuit Court of Appeals upheld the district court’s $6.1 million award against BCBS Michigan Michigan for violating ERISA’s rules regarding prohibited transactions and fiduciary fraud.  The federal courts agreed that federal ERISA law prohibits BCBS Michigan’s TPA self-dealing as an ERISA fiduciary by withholding all hidden fees or overpayment recoveries. In September of 2014, BCBS Michigan, along with other insurance industry lobby groups, filed a petition to the US Supreme Court, requesting a hearing to challenge the 6th Circuit’s decision. The Supreme Court refused the request, on October 20 2014, thereby upholding the circuit courts decision. 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 immediate impact of the Supreme Court’s decision could be billions of dollars for all self-insured ERISA health plans nationwide, as a result of the TPA industry’s potential recovery of a billion dollars in overpayment recoupments and anti-fraud campaigns over the past 10 years.”

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 appeal. Furthermore, 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 Plan Asset refunds from the past 10 years of successful plan assets TPA/ASO anti-fraud recoupments and managed care savings in the private sector.

Avym Corporation announces new advanced ERISA Embezzlement Recovery Programs in preparation of the forth-coming Supreme Court decision, which will have a 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 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.  All self-insured health plans and TPAs should monitor this extremely critical Supreme Court decision on the BCBS appeals, 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.

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 Supreme Court’s decision could be billions of dollars for all self-insured ERISA health plans nationwide, as a result of the TPA industry’s potential recovery of a billion dollars in overpayment recoupments and anti-fraud campaigns over the past 10 years.

For over 6 years, 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 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.

On April 2, 2015, the 5th Circuit ruled a federal district Judge’s decision was an abuse of discretion and vacated the district order in favor of Aetna which prohibited provider defendants from transferring funds.

In what can only be seen as vindication, the 5th Circuit Court ruled that Hon. Judge Hughes’ decision was an abuse of discretion and vacated the district court’s order in favor of Aetna. In an extraordinary turn of events, the 5^th Circuit Court ruled that Judge Hughes “essentially ordered an asset freeze from the bench” and did not have authority to do so, thereby abusing his discretion.  The appellate court also vacated Judge Hughes’ order compelling “post judgement discovery”. This is not the first time Judge Hughes has butted heads with the appellate court.

Recent court decisions have shed light on the insurance industry’s global strategy of monopolizing PPO and Managed Care discount agreements and discouraging members from accessing out of network benefits. In this case, Aetna originally filed suit in 2012 against multiple healthcare providers alleging fraud. In August, 2014, U.S. District Judge Lynn N. Hughes ruled that Aetna could take $8.4 million from multiple health care providers for allegedly defrauding the insurer of millions dollars.

In October, 2014, one of the provider defendants, Trinity, moved to disqualify Judge Hughes from the case and to vacate his prior orders. The judge holds stock in Chevron Corp., which sponsors one of 325 ERISA plans at issue in the case, amounting to a conflict of interest, Trinity argued.

Immediately after Judge Hughes’s order allowing Aetna Life Insurance Co. to take $8.4 million from the defendants the receiver for one of the defendants, Cleveland Imaging, filed a “suggestion of bankruptcy”.

Awareness of this 5th Circuit Court decision may save providers from seemingly inevitable but preventable bankruptcies, however providers and healthcare attorneys must understand their rights, including when and how a federal district court judge may abuse their discretion and authority.

“Apparently, a provider in this case has only two options, file for a bankruptcy or appeal a reversible decision to an appeals court. One defendant took the first choice, but the second took another one”, explains Dr. Zhou, president of ERISAclaim.com and national expert on ERISA compliance and appeals.

As part of the Out-of-Network provider training and compliance programs, Avym Corporation closely follows and explores important national landmark managed care lawsuits. On April 7, 2015, Avym Corporation announced case-specific brainstorming and training program for this and other dramatic developments in managed-care litigation as well as litigation support services to healthcare providers and healthcare attorneys.

Case info:

In re: 2920 ER, L.L.C., doing business as Trinity Healthcare Network, Petition for a Writ of Mandamus to the United States District Court for the Southern District of Texas, U.S.D.C. No. 4:12-CV-2451, Case No. 14-20734, in the United States Court of Appeals for the Fifth Circuit, filed on April 2, 2015.

Out of Network providers are advised to closely analyze this landmark case by evaluating and focusing on the following key elements, to the extent of the appellate court order to vacate the District Court Judge Hughes’s orders only relevant in abuse of discretion:

I.    A court order link to the court website is provided for all interested providers and attorneys to completely research this important development: http://www.ca5.uscourts.gov/opinions/unpub/14/14-20734.0.pdf

II.   On August 20, 2014, the district court entered an “opinion on partial judgment”: “The court ordered that ‘Aetna Life Insurance Co. will take $8,412,116.01’ from the defendants.” according to the court document.

III.   “After the district court entered its order granting ‘partial judgment’, the Receiver for Cleveland Imaging filed a ‘suggestion of bankruptcy’ to notify the court of Cleveland Imaging’s voluntary petition for Chapter 11 bankruptcy.” according to the court document.

IV.   “Meanwhile, 2920 filed a motion asking the district court to certify its “partial judgment” as “final and appealable” under Federal Rule of Civil Procedure 54(b) and 28 U.S.C. § 1292(b). The district court denied the motions to certify partial judgment for interlocutory appeal without explanation two days later.” according to the court document.

V.    “The district court also granted Aetna’s motion for “postjudgment discovery” in a very brief order that same day without explanation.” according to the court document.

VI.   “The district court then essentially ordered an asset freeze from the bench. The court ordered: “No payments to Spring Klein until some explanation has been made of what they’re for, no transfers that are not in response to a purchase order or some other objective commercial transaction.” according to the court document.

VII.  Fifth Circuit found Judge Hughes abused his discretion: “Because the district court did not have authority to freeze assets before judgment without following the requirements of Rule 65, the decision was an abuse of discretion that we must vacate.” according to the court document.

VIII. The 5th Circuit Court Orders and Concludes: “For the foregoing reasons, the petition for mandamus relief is DENIED, and the district court’s order signed on November 13, 2014, prohibiting 2920 from transferring funds is VACATED, as are its orders compelling “postjudgment discovery”—except to the extent that such discovery is reasonably necessary to investigate pending claims under Rule 26. We REMAND to the district court for further proceedings consistent with this opinion.” according to the court document.

Avym is dedicated to empowering providers with ERISA appeal compliance and ERISA litigation support in all cases as well as ERISA class actions.  All medical providers and Health Plans should understand several critical issues regarding the profound impact of this and other court decisions on the nation’s Out-of-Network claim denial epidemic, including how to correctly appeal every wrongful claim denial and 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 claim denials and overpayment recoupment and offsetting, to seek for enforcement and compliance with ERISA & PPACA claim regulations.

CIGNA’s ERISA sword backfires – ERISA “shining armor” used to protect out-of-network providers as federal district court rules against CIGNA! District Court dismisses all of CIGNA’s Claims and grants out-of-network Humble Surgical Hospital motion in its entirety.

On March 24 2015, a federal district court in Houston, Texas ruled against CIGNA and dismissed all of its claims. The district court ruled in favor of out-of-network provider, Humble Surgical Hospital (HSH), by granting its motion on judgement in its entirety due to ERISA preemption, lack of ERISA fiduciary legal standing and failure to sufficiently plead remaining claims. In an interesting irony, here it was the provider, HSH, which argued for ERISA preemption and CIGNA’s lack of standing, signaling a turning point in out-of-network claim disputes.

The lawsuit is part of a larger trend in out-of-network reimbursement battles. The decision sheds light on the “out-of-network fraud” enigma and is one of a series of critical court decisions which address the typical scenario for out-of-network providers: payors refusal to pay claims which leads to “catch-all” out-of-network lawsuits seeking total overpayment refunds of claims previously paid, all based on broad and vague allegations of fraud.

In a common fact pattern for out-of-network providers, CIGNA’s state law fraud and ERISA overpayment lawsuit alleges improper billing, fee-forgiving, deductible waiver fraud, negligent misrepresentation, unjust enrichment and allegations the hospital physician-owner received improper kickbacks from unlawful referrals.

Avym Corporation (Avym) advocates for new ERISA out-of-network specialist programs and litigation support services to assess, educate and comply with this court decision. Avym provides comprehensive and in-depth assessments of this and a string of other court decisions to demystify ERISA legalese for both non-lawyer healthcare providers and seasoned healthcare attorneys.

Moreover, this court decision provides comprehensive legal and practical guidance for the entire managed care business model and health plan benefits industry.  As more health plans are determined to contain costs, likewise, more healthcare providers are determined to provide patients with high quality, affordable healthcare while continuing to support patient’s freedom to select their out-of-network medical services.

“Timely education and understanding of this court decision will bring peace, harmony and compliance to the healthcare industry”, according to Dr. Jin Zhou, President of ERISAclaim.com and national expert on ERISA compliance and appeals.

Case info:
Connecticut General Life Insurance Company, et al. v. Humble Surgical Hospital, LLC, Civil Action No. 4:13-Cv-3291, on 03/24/15, in the United States District Court, Southern District of Texas. (Cigna v Humble Surgcal Hospital LLC)

Avym’s new out-of-network specialist programs will analyze this decision in the following sessions:

I. Court’s summary of this lawsuit as part of a larger trend in out-of-network reimbursement battles:

“The plaintiffs, Connecticut General Life Insurance Company and Cigna Health and Life Insurance Company (collectively, “Cigna”), bring suit against the defendant, Humble Surgical Hospital, LLC (“HSH”), to recover alleged overpayments made to HSH for out-of-network services. The complaint (ECF No. 1) asserts various state common law claims sounding in tort, as well as claims for declaratory and injunctive relief. Alternatively, Cigna seeks equitable relief under the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. Pending before the Court is the defendant’s FED. R. CIV. P. 12(c) motion for judgment on the pleadings, which challenges the complaint based on theories of ERISA preemption and statutory standing (ECF No. 16). The plaintiffs filed an opposing response (ECF No. 21) and the defendant timely replied (ECF No. 31). Having reviewed the pleadings, motion, responsive documents and applicable law, the Court determines that HSH’s motion should be GRANTED in its entirety.”

according to court document.

II. Court’s conclusion and practical guidance for the entire managed care business model:

“CONCLUSION: Based on the foregoing analysis and discussion, the Court concludes that ERISA preempts all state claims arising from Cigna’s self-funded plans and employee benefit plans. Cigna has not alleged sufficient facts to establish standing to sue under ERISA nor has it alleged sufficient facts to establish the existence of any plan from which its non-ERISA claims arise. As pleaded, Cigna’s state and federal claims are deficient. HSH’s motion for judgment on the pleadings is therefore GRANTED and Cigna’s complaint is dismissed.”

according to court document.

III. Court’s summary of CIGNA’s specific complaints against Humble Surgical Hospital:

“Based on these allegations, Cigna asserts state law claims for money had and received, common law fraud, negligent misrepresentation and unjust enrichment. Under these theories, Cigna seeks restitution of overpayments it made to HSH for “false and excessively billed services.” Cigna also seeks injunctive relief requiring HSH to disclose the referral arrangements it has made with physicians, especially those who have an ownership interest in HSH. The injunction would also enjoin HSH from charging unreasonable fees and waiving patient responsibility for its out-of-network services. Additionally, Cigna seeks a declaratory judgment that HSH’s billing practices violate various Texas statutes and that Cigna is entitled to recoup all overpayments paid to HSH. Alternatively, Cigna seeks equitable relief under ERISA, 29 U.S.C. § 1132(a)(3), “to the extent this dispute involves the exercise of Cigna’s discretion under an ERISA plan.”

according to court document.

Avym is dedicated to empowering 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 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.

A recent Federal 5^th Circuit Court decision thwarted CIGNA’s potentially discriminatory “out of network protocol” policy against non-contracting providers and facilities. The decision allows properly assigned out-of-network providers Article III legal standing to sue and to challenge CIGNA’s potentially discriminatory “out of network protocol” under ERISA.

The 5^th Circuit Appellate court questioned whether CIGNA’s denial of claims to Out of network providers who did not collect all patients’ deductibles and co-payments but NON denial of claims for in network providers who did the same (also known as CIGNA’s “fee-forgiving protocol” to reduce payments) violated ERISA anti-discrimination laws. According to the court:

 “Also relevant is whether Cigna denied all coverage to patients who were not charged or ‘billed’ for their copays or coinsurance by in-network providers.”

Health plan discrimination is not only wrong in principle, but is without justification based on the quality of health care provided by non-contracted providers. All patients should have the right to choose and be reimbursed for all health care services provided by non-contracted providers without impediments and limitations that unfairly restrict their freedom of choice. Anti‐competitive and discriminatory obstacles only serve to drive up costs, limit patient choice and erode the quality and necessity of health of care.

According to the Senate Committee on Appropriations Report dated July 11, 2013, “The goal of [section 2706 of the PHS act] is to ensure that patients have the right to access covered health services from the full range of providers licensed and certified in their State.”

Since its inception in 2010, the Patient Protection and Affordable Care Act (PPACA) claims regulation adopted longstanding ERISA claims regulations in their entirety for all health plans.

PPACA §2706 specifically prohibits plan’s discrimination against any health care providers solely based on their participation in plan TPA’s PPO networks with respect to health plan coverage when they are acting within the scope of their license under state laws. Section 2706 applies to all employee health benefit plans (insured and self-insured) and all health insurance policies.

Section 2706(a) of the Public Health Service Act preserves those protections by creating a federal provider non-discrimination provision that applies to all plans regulated by PPACA. Section 2706(a) prohibits insurance providers from discriminating, with respect to participation under the plan or coverage against health care providers acting within the scope of their state license of certification.

`SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE.

`(a) Providers- A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law.

`(b) Individuals—The provisions of section 1558 of the Patient Protection and Affordable Care Act (relating to non-discrimination) shall apply with respect to a group health plan or health insurance issuer offering group or in-dividual health insurance coverage.(http://www.dol.gov/ebsa/pdf/affordablecareact.pdf page 97)

As established by this landmark 5th Circuit Court ERISA ruling, federal courts have clarified, for the first time, ERISA anti-discrimination protections for both in and out-of-network patients and providers. Furthermore, this court decision may have exposed a fundamental legal flaw in the nation’s managed care business model.

The implications of this case will reverberate across the healthcare industry. It will have profound ramifications for all professionals involved in healthcare including insurance carriers, medical providers, plan sponsors, plan administrators, TPA’s, attorneys and of course patients.

Avym Corporation promotes  new ERISA out-of-network specialist programs and litigation support services to assess, educate and comply with this appellate court ERISA decision. This decision is a true harbinger of things to come and can be used as a “crystal ball” to help understand alleged out of network fraud mysteries.

Avym Corporation provides comprehensive and in-depth assessments of this landmark decision and will demystify ERISA legalese for both non-lawyer healthcare providers and seasoned healthcare attorneys. This is a critical court decision, which addresses a typical scenario for out of network providers: refusal to pay claims then a catch-all, out of network lawsuit seeking complete overpayments based on broad and vague allegations of fraud.

Avym is dedicated to empowering 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

The other shoe drops on insurer’s attempts to limit payments to providers and discourage patient out-of-network utilization based on patient deductibles and co-pays. 5th Circuit decision signals shift towards providers in out of network reimbursement disputes.

In a much anticipated second case regarding out-of-network provider’s right to sue and whether coverage may be conditioned on collections of patient’s out of pocket costs, the Fifth Circuit Court of Appeals ruled against Cigna in a decision that is consistent with a recent Ninth Circuit judgment against UnitedHealth Care. The ruling against Cigna’s “fee forgiving protocol” allows out-of-network provider’s the right to sue for ERISA violations in federal court and it also allows out-of-network patients the right to both ERISA discounts and PPO discounts.

In an unprecedented turn, the 5th Circuit ruling provides very specific step-by-step ERISA legal guidelines used in determining whether all ERISA plans improperly require collection of full deductible and coinsurance as a pre-condition  to complete benefits coverage and whether CIGNA violated federal ERISA law in its inconsistent or discriminative out-of-network practice compared to its in-network practice of ERISA plan claims administration services.

Case Info: North Cypress Medical Center Operating Company, Limited; North Cypress Medical Center Operating Company GP, LLC, v. CIGNA Healthcare; Connecticut General Life Insurance Company; CIGNA Healthcare of Texas, Incorporated, (North Cypress Medical Center v. Cigna)Case No. 12-20695, in the United States Court of Appeals for the 5th Circuit, filed on March 10, 2015.

This landmark decision may potentially save millions of Americans from medical bankruptcy. It also illustrates one of the most pressing issues facing out-of-network patients and providers across the nation.  Deductible and Co-Pay waiver claim denial is the No. 1 out-of-network claim denial reason, contributing to increases in the number of personal bankruptcies. According to many recent surveys, reports and case studies, one in five American adults will struggle to pay medical bills. In fact, medical bills are the leading cause of personal bankruptcy, affecting even those with health insurance. Subsequently, approximately 76% of Americans paid for out-of-network coverage through their employer-sponsored health plans, according to a December 2013 National Composition Summary from DOL Bureau of Labor Statistics. It’s clear that the epidemic of out-of-network deductible balance billing wrongly imposed by ERISA plans has inevitably contributed significantly to unexpected medical bills and personal bankruptcy.

In light of other recent court filings this federal court decision, on deductible and co-payment collection practices, paves the way for millions of out-of-network ERISA plan participants and their beneficiaries by ruling out-of-network ERISA discounts must and should be treated consistent to in-network PPO discounts.

Inspired by this and other recent court decision, Avym Corporation announces new ERISA Out-Of-Network Claims Specialist training programs strictly in accordance with this most comprehensive federal appellate court decision:

“There are strong arguments that Cigna’s plan interpretation is not “legally correct,” in which case the inquiry proceeds to determine whether Cigna nonetheless had discretion to interpret the plan as it did. On a finding that the plans, read correctly, do not condition coverage on collection of coinsurance, the question would be whether Cigna nevertheless had discretion to absolve itself of responsibility for payment of the greater part of thousands of claims…”

according to court documents.

In this CIGNA case, the out-of-network hospital provider’s medical claims were denied by CIGNA in whole or in part on the basis that all patient deductible’s and coinsurance amounts were not collected in full or billed for by the hospital. The Fifth Circuit ruled for the hospital’s ERISA right to sue and outlined legal steps under ERISA to determine if an ERISA plan truly requires collection of deductibles and balance billing in full:

“Cigna argues that if we find standing we ought nonetheless to affirm the grant of summary judgment against North Cypress’s benefit underpayment claims on the merits; that its reading of the plan language was “legally correct” or otherwise within its discretion, and that its actions rested on “substantial evidence.”57 …. The “most important factor to consider” in the legal correctness inquiry is whether Cigna’s “interpretation is consistent with a fair reading of the plan[s].”

according to court document.

The court goes on explain whether CIGNA violated ERISA:

“The inquiry is thus whether ordinary plan members who read that “payment for the following is specifically excluded from this plan: . . . charges for which you are not obligated to pay or for which you are not billed,” would understand that they have no insurance coverage if they are not charged for coinsurance. That is, would a plan member understand the language to condition coverage on the collection of coinsurance, rather than simply describing the fact that the insurance does not cover all of a patient’s costs…..There are strong arguments that Cigna’s plan interpretation is not “legally correct,” in which case the inquiry proceeds to determine whether Cigna nonetheless had discretion to interpret the plan as it did.”

according to court document.

Finally, the court rejected CIGNA’s argument regarding collection of deductible and coinsurance and explained that an out-of-network patient has the same ERISA rights as an in-network patient for deductible and coinsurance obligations under ERISA plans:

“Also relevant is whether Cigna denied all coverage to patients who were not charged or “billed” for their copays or coinsurance by in-network providers.”

according to court document.

North Cypress Medical Center Operating Co. DOL Amicus Brief, in support of plaintiffs-appellants, and requesting reversal

Recording of Oral Arguments

Avym is dedicated to empowering 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