Category Class Action Lawsuits

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.

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.

An Oklahoma jury slammed Aetna with a $25.5 Million verdict for improperly denying medical claims, awarding the family of the deceased patient $15.5 million in emotional distress and another $10 million in punitive damages. The verdict comes just months after an Aetna medical director admitted under oath, that he never actually looked at a patient’s medical records while at Aetna because it was Aetna’s protocol, and that he based his decision off “pertinent information” provided to him by a nurse.

The case details are very common and happen everyday across the nation: Patient pays for health insurance, patient gets sick and seeks treatment, insurer denies claim under the guise that services are deemed experimental or investigational. According to the family’s attorney, Doug Terry, “[this] case represents/exposes so much of what is wrong with health insurance,” Terry said.

“This case gave the jury a look behind the curtain so they could see what goes on at a health insurance company when they deny claims.  The evidence showed Aetna’s denial of her claim involved overworked, under-qualified doctors working in the interest of their employer’s bottom line who are compensated in part based on the profitability of the company.”

Court documents showed that evidence was presented to the jury, showing that Aetna’s doctors spent just minutes reviewing her case, despite the critical nature of her condition. Ultimately, Aetna’s  medical doctors denied the coverage, saying it was experimental and investigational, though clinical expert, Dr Andrew L. Chang, argued the treatment was not new, but a well established cancer treatment for decades, and had not only been approved by the Food and Drug Administration, it but is also covered by Medicare.

Interestingly, Aetna considers the treatment appropriate for pediatric patients; and Medicare pays for the treatment in 65 year olds, which raises the question: “what is it about 22-year-olds to 64-year-olds that makes proton therapy experimental? There is no good answer for that; insurance companies call it that because they decided to deem it as such.” according to Dr. Chang.

According to multiple outlets, several jurors mentioned that they believed Aetna had “Rubber Stamped” the claim denials, based on the very limited time Aetna medical doctors spent actually reviewing the claim. Ultimately, the jury found that Aetna had “recklessly disregarded its duty to deal fairly and act in good faith with the Cunninghams.“

Astonishingly, Aetna’s  attorney John Shely said in closing arguments that Aetna was proud of the three medical directors who denied coverage, even turning to thank them as they sat in the front row of the courtroom, according to jurors and other witnesses in court.

According to a CNN article, this decision represents the largest verdict in an individual claim denial insurance case in Oklahoma history, and could have major ramifications across the country for a form of cancer treatment called proton beam therapy.

The Case info: Ron Cunningham et al. v. Aetna Life Insurance Company, et al; Case number CJ-2015-2826 in the District Court of Oklahoma County, State of OK

For nealry 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.

**UPDATE**

On August 1, 2017 US District Judge Michael W. Fitzgerald issued an order granting class certification against ILWU-PMA Welfare Plan and its third party administrator, Zenith American Solutions, for breach of fiduciary duty.

According to court records;

“Plaintiffs’ claims seeking removal of the Plan’s fiduciaries raise issues that apply generally to the class, and thus a class can be certified under Rule 23(b)(1).’

As part of his rationale for certifying class, the judge explained, “Because the underlying issue does not turn on the approval or denial of any given claim for benefits, but rather on Defendants’ course of conduct as a whole, the issues discussed above do not preclude class certification on the fiduciary claims.”

ILWU-PMA and Zenith argued class should be denied because the plaintiffs failed to exhaust the administrative remedy, but the court disagreed, “Defendants contend that typicality and adequacy of representation are not met because Lead Plaintiffs have failed to exhaust their administrative remedies. But exhaustion is not required for claims alleging a breach of fiduciary duty. Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d1282, 1294 (9th Cir. 2014). Accordingly, exhaustion is no bar to certifying the class, and the requirements of Rule 23(a) are met.“

ILWU-PMA and Zenith next argued class should be denied because the proposed class is not “cohesive” and therefore presents very little risk of “inconsistent judgments” going forward. However the court again disagreed, “The relief requested, however, would benefit all Plan members in the same way, and thus the class is sufficiently cohesive.”

“Moreover, the risk of inconsistent judgments is apparent from the face of the claim: If each of the four Lead Plaintiffs brought individual actions seeking removal of Zenith and the PMA Trustees in four separate courts, and half were granted the requested injunctive relief while the other half were not, the Plan would be required both to remove and not to remove Zenith and the PMA Trustees.

Ultimately, this ruling should serve as a wake-up call to all Plan Administrators and Fiduciaries, to ensure any and all TPAs are acting in the best interest of the members and their beneficiaries. Thus avoiding costly litigation and possible penalties.

In the case, which we have written about before, plaintiffs sued the International Longshore Workers Union-Pacific Maritime Association Welfare Plan, (ILWU-PMA) and its third party administrator, Zenith American Solutions (Zenith) for failing to properly administer and pay benefit entitlements to the employees of ILWU and their beneficiaries. The suit also named Pacific Maritime Association trustees, who manage the plan, individually, saying that they were not acting in the best interest of employees.

Case Info: Amijo et al v. ILWU-PMA Coastwise et al U.S. District Court for the Central District of CA (Western Division- Los Angeles) Civil Docket for Case #: 2:15-cv-1403, Filed 02/26/2015.

The original complaint alleged Zenith, and its agent TC3, failed to properly process member medical claims leading to many claims going unpaid, and members having to foot the medical bills out of pocket. According to the complaint: 

“the backlog of unpaid medical bills increased dramatically in early 2013. According to the Interim Report, by the summer of 2013, there were 286,000 unprocessed claims from the Cigna era, and there were also growing numbers of unprocessed claims from the Zenith era.’

After an arbitrators hearing, Zenith assured the ILWU employees their claims would be processed and paid in a timely manner, but that did not happen, and in fact the backlog grew even worse, according to court records,

“Although Zenith promised [it] would, put in place mechanisms to address the backlog of unpaid medical bills, in the latter half of 2013 the backlog became worse, with about 90,000 new claims each month.”

Ultimately, the members sued the plan in a class action, seeking benefits and the removal of the fiduciaries for failing to monitor administration of the Plan. The suit also alleged Zenith and the PMA Trustees’ breach of their fiduciary duty harmed the Plan as a whole by, among other things, causing doctors to stop providing services the the employees and their beneficiaries.

In Landmark Class Action Case, a Federal Judge would shut down United HealthCare’s “cross-plan offsetting” practice as a “troubling use of plan assets”, ruling the industry standard practice of “Cross‐plan offsetting creates a substantial and ongoing conflict of interest” for all claims administrators who “simultaneously administer both self‐insured and fully insured plans.” The court also called into question United’s practice of reaching “into the pockets of the sponsors of self‐insured plans” and putting that money “in United’s pocket”.

In an extraordinary decision, US District Judge Patrick J. Schultz has effectively barred cross-plan offsets. The judge weighed in on two very important questions: First, whether UHC acted “reasonably” in interpreting its client’s plans to permit cross‐plan offsetting; and whether the practice complies with the “fiduciary duties imposed by ERISA”. The court offered an answer to both issues while providing very clear guidance for Plans, claims administrators, medical providers and patients.

As we have written about many times 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. With the new legal guidance this landmark case provides, will self-insured plan sponsors, like AT&T and Gap Inc. be held accountable to allowing United to engage in such ERISA violations such as embezzlement, self-dealing and breach of fiduciary duty?  

The court case info: Peterson DC 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, Filed 06/23/14

In this class-action, originally filed in 2014, healthcare providers alleged ERISA violations by UnitedHealthcare Group for withholding and offsetting newly adjudicated claim payments from one patient to satisfy an alleged overpayment in the past, from separate, unidentified patients in complete violation of ERISA, and even worse, by misrepresenting to the patients and the plan sponsors on patient EOB’s “payment made to provider”, when in truth and in fact no such payment was ever made to the providers, according to the Court Complaint.

In answering the first question, Judge Schultz considered whether the language in UHC’s client health plans at issue in the case, identified as 46 Plan Bs, authorized UHC to engage in the offsetting practice known as “Cross-Plan Offsets”. According to the court they did not: “the Court finds that United’s interpretation is unreasonable. The plans themselves do not authorize cross‐plan offsetting. To the contrary, most of the plans contain specific overpayment and recovery language that would be rendered meaningless if United was authorized by the generic clauses that it relies upon to engage in cross‐plan offsetting.”

The court went on to clarify: “Every one of the overpayment provisions is triggered only when the plan itself makes an overpayment…In other words, each Plan B authorizes the recovery of overpayments made by the Plan B.

“None of the overpayment…provisions contain any language allowing other plans to recover their overpayments from the plan. “In other words, not one Plan B authorizes recovery of an overpayment made by a Plan A.”, according to the court order.

Remarkably, the judge chided UHC for or creating its cross-plan offsetting process for its own benefit and without examining the language of the plans. The judge specifically drew attention to this point, according to the court order: “It should be noted, that in looking carefully at the language of the plans…the Court is doing something that United itself did not do before implementing cross-plan offsetting…”

“Only after getting sued did United hunt through the plans for any language that might provide a post hoc justification for its conduct…United admits that it was not able to find a single provision of a single plan that explicitly authorizes cross-plan offsetting.”, according to court records.

The judge also questioned whether UHC ever disclosed their intention to engage in “cross-plan offsets” or the likely conflict of interest to its plan clients: “It appears, however, that disclosures concerning United’s system of cross-plan offsetting are mostly or entirely handled by United’s banking team during what appear to be fairly technical explanations for banking, account-setup and account-funding processes. It also appears that such disclosures mostly occur orally and on a somewhat ad hoc basis”.

UHC argued that it did disclose its cross-plan offset provisions to its clients’ “benefits and finance and treasury folks”, to which the court responded “it is not clear whether those individuals have authority to make plan-wide fiduciary decisions, nor is it clear whether these disclosures are made before or after a plan sponsor decides to become a United Client.”

Regarding the second question, whether the practice of cross-plan offsetting violates ERISA, the judge, while weighing possible conflicts of interest in violation of ERISA, went so far as to mention the fact that UHC lined its own pockets with self-insured plan assets: “the money that reimburses United for its alleged overpayment comes out of the plan sponsors’ pockets. Several internal United documents emphasize this point and gush about how cross-plan offsetting will allow United to take money for itself out of the pockets of the self-insured plans…”

“In other words, every one of the cross‐plan offsets at issue in this litigation put money in United’s pocket, and most of that money came out of the pockets of the sponsors of self‐insured plans.” according to the court records.

The court went into great detail regarding UHC’s conflict and possible prohibited transaction and breach of fiduciary duty: “In light of this case law and the strict fiduciary duties imposed by ERISA, cross-plan offsetting is, to put it mildly, a troubling use of plan assets—one that is plainly in tension with “the substantive or procedural requirements of the ERISA statute . . . In stark terms, cross‐plan offsetting involves using assets from one plan to satisfy debt allegedly owed to a separate plan—a practice that raises obvious concerns under §§ 1104 and 1106. These concerns are particularly acute in this case, in which every offset that United orchestrated did not just benefit a different, unrelated plan, but benefited United itself.”

“Cross‐plan offsetting creates a substantial and ongoing conflict of interest for claims administrators who, like United, simultaneously administer both self‐insured and fully insured plans…”, according to court records.

The judge, after examining the facts of the case, shed light on an enormous incentive for UHC: “As the single biggest payor of claims, United’s personal stake in cross‐plan offsetting dwarfs that of any self‐insured plan. [United] in this circumstance has every incentive to be aggressive about looking for overpayments from its own fully insured plans (which overpayments can be recovered from self‐insured plans) and less aggressive about looking for overpayments from self‐insured plans (which overpayments might be recovered from fully insured plans).”

“And indeed, this incentive is reflected in United’s internal documents, which enthusiastically describe how cross‐plan offsetting will permit United to reach into the pockets of the sponsors of self‐insured plans to recover the overpayments that United makes in connection with fully insured plans.” (emphasis added) 

The court further clarifies its reasoning and confirms: “It is also undoubtedly true, as United is reluctant to acknowledge, that cross-pan offsetting can harm plan participants” and “It is not fairly debatable, however, that the type of cross‐plan offsetting challenged in this case—that is, cross-plan offsetting engaged in by an administrator who insures some (but not all) of the plans—presents a grave conflict of interest.”

Ultimately, the court concludes, “United labors under a continuing conflict of interest in administering the cross‐plan offset system because United fully insures some but not all of the plans. More importantly, the fact remains that cross‐plan offsetting is in tension with ERISA’s fiduciary rules, is not provided for in the plans, and is at odds with the specific offset language contained in most of the plans. As a result, United did not act reasonably in interpreting the Plan [documents] that are at issue in this case to permit cross‐plan offsetting. The Court therefore grants plaintiffs’ motions for partial summary judgment and denies United’s motions for full summary judgment.”

In ruling against UHC on almost every argument, the judge certified the case for immediate appeal, acknowledging that this was a landscape changing and “exceptional case,” and taking into consideration that United, as the nation’s largest insurer will have to “undertake the extremely expensive and disruptive process if unwinding its cross-plan offsetting practice.”

“This order resolves a controlling and dispositive question of law: whether United acted reasonably in interpreting the plans to permit cross‐plan offsetting.”

“IT IS HEREBY ORDERED THAT:

1. Defendants’ motions for summary judgment are DENIED.
2. Plaintiffs’ motions for summary judgment on Phase I issues are GRANTED.”

Based on the fact that ‘cross-plan offsetting” is pervasive throughout the health care industry, this legal guidance will undoubtedly have tremendous ramifications on all Plans, TPAs, medical providers and patients. Medical providers must be proactive and adopt compliant practices and policies. Health plans must also be proactive in validating that plan assets 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.

Blue Shield of California routinley denies procedure as “investigational” despite having been approved by the Govt. for over a decade.

On July 14, 2015 a federal judge certified a class of members suing California Physician’s Service dba Blue Shield of CA (BSCA) for alleged improper medical claim denials in violation of ERISA. The court found that because members are seeking “declaratory and injunctive relief, allowing a class action to be brought would be in the interests of judicial economy”.

Defendant BSCA members have requested approval for back surgery only to be denied based on BSCA’s company policies that the procedure is deemed “investigational”. BSCA denied the procedure, artificial disk replacement (ADR) because “the efficacy of [ADR] has not been validated by the peer reviewed literature”.

Court records show that between April 2010 and October 2014, 19 members of BSCA have requested approval for the surgery and all 19 have been denied coverage for the ADR procedure.

Additionally, the FDA first approved of a type of ADR in 2004 and that the type of ADR sought by the Plaintiff was approved in 2006, according to court records.

According to court records, plaintiffs allege that defendant BSCA’s “medical policy of categorically excluding lumbar ADR procedures from coverage” is a violation of ERISA. The court goes on to say “Plaintiff’s proposed definition on includes individuals who were advised or learned that Defendant deemed ADR surgery “for their back conditions” was “investigational” and thus not covered. The relief sought is for Defendant to change their policy and to review previously denied claims. None of the relief requested requires individualized inquiry.”

Case file info: Luis Escalante v. California Physicians’ Service dba Blue Shield of CA case number 2:14-cv-03021, in the U.S. District Court for the Central District of California.

According to Judge Pregerson, “A judgment either affirming or overturning Defendant’s classification of ADR procedures as “investigational” on a classwide basis would avoid duplicative suits brought by other class members demanding coverage for ADR procedures.”

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 critical issues regarding the profound impact of this and other court decisions on the nation’s medical 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.

After Resolution Of Contract Negotiations, Is Damage To Members Ignored? ERISA Class Action Filed Over Medical Claim Denials; Alleges Thousands Of Pre-Approved Medical Claims Unpaid, Members Left Holding The Bag; Possibly Delay Ratification Process?

On February 26, 2015, just days after the Obama Administration sent in Labor Chief Thomas Perez and a settlement was negotiated between ILWU members and the PMA, the International Longshore Workers Union-PMA Coastwise Welfare Plan was slapped with a new class-action lawsuit alleging ERISA violations and fraud for its failure to pay possibly hundreds of millions of dollars in pre-approved benefit claims, as reported by the Los Angeles Times newspaper. The lawsuit offers hope to the thousands of members that have had pre-authorized claims denied, according to court records.

“This is about protecting the rights of American workers. It is unconscionable that a health plan would deny pre-authorized, covered medical claims from a cancer patient, thereby denying needed chemotherapy. Every health plan must comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties, for the millions of hard-working American workers and families. Otherwise we will have a real life John Q on our hands.” said Esmeralda Alfaro, Co-Lead Counsel for the class plaintiffs.

Despite protests from thousands of ILWU members throughout CA and numerous “work stoppages” over the last 2 years and a formal complaint to the Department of Labor, EBSA Assistance and Complaints, the PMA welfare plan has allegedly refused to pay pre-authorized medical claims. The result has been calamitous for members and their relatives according to the court documents. Many have foregone much needed medical care and some have had mortgage loan applications denied due to adverse credit ratings linked directly to unpaid medical claims.

According to the complaint, the 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 this ERISA class action filing, Avym Corporation announces new comprehensive ERISA and PPACA Out-Of-Network (ONET) Medical Claim Appeal and Litigation Support Programs in accordance with the most recent federal court decisions. Avym Corporation provided plaintiff providers with ERISA appeal compliance and ERISA litigation support in this provider ERISA class action and Avym’s support services were instrumental in allowing multiple plaintiffs the chance to fight back.

Case Info: Amijo et al v. ILWU-PMA Coastwise et al U.S. District Court for the Central District of CA (Western Division- Los Angeles) Civil Docket for Case #: 2:15-cv-1403, Filed 02/26/2015.

This class action lawsuit comes on the heels of successful contract negotiations between the International Longshore Workers Union and the Pacific Maritime Association, a group of West Coast terminal operators. While the settlements still have to be ratified by union members, it remains unclear whether ILWU members view the class action lawsuit as an obstacle to delaying the ratification process. The implications of any delay in ratifying the agreements could be enormous.

According to the lawsuit,

• ILWU-PMA has been intentionally withholding and delaying payments from patients and providers on legitimate claims, thereby increasing interest payments to the Plan’s fund in violation of ERISA;
• ILWU-PMA misleads patients and providers by creating the “misimpression that the PMA Trustees have been diligent in the exercise of their fiduciary obligations” when in fact the claim back log was increasing at a rate of 90,000 additional claims per month;
• ILWU-PMA has never complied with ERISA claims regulation nor its own claims procedures by failing to provide “meaningful grievance and appeal procedures” effectively denying full and fair reviews of appealed claims in violation of ERISA;
• ILWU-PMA’s refusal to pay claims has resulted in many members and their beneficiaries foregoing medical care or treatment that is covered by the Plan to avoid damage to their credit rating or additional personal liability for covered services not paid by the Plan;
• ILWU-PMA has intentionally discouraged members and beneficiaries from seeking services from Out-of-Network providers due to the prospect of complete denials of covered, pre-authorized services, in violation of ERISA;

The putative class on behalf of all similarly situated members and providers is seeking for ERISA benefits payments due, injunctive and declaratory relief and removal of the PMA Trustees among other claims.

Avym Corporation’s ONET UCR ERISA Medical Claim Appeals and Litigation Support Programs will systematically demystify this ERISA class action lawsuit, with particular focus on the essential elements of ERISA claims regulation, successful ERISA administrative appeals as the prerequisites for ERISA judicial reviews on behalf of all similarly situated patients and healthcare providers.

The class action also alleges additional ERISA violations by ILWU-PMA for withholding newly adjudicated claim payments even after the claims were “pre-authorized” and or “pre-priced” by the plan and it’s agents. In particular, the complaint alleged the plan “now routinely denies, or fails even to process, most or all new claims for services of out-of-network Providers.”

The Complaint goes on to allege that: “Plaintiffs are informed and believe, and based thereon aver, that Defendants have paid only a few claims for reimbursement for medical expenses for services of out-of-network Providers in over one year, causing financial hardship to Participants and Beneficiaries, who by contract or otherwise are liable to Providers if the Plan does not pay. Such intentional refusals to pay also cause hardship to Providers, who are owed substantial sums, and make it increasingly difficult for Providers to continue to serve Participants and Beneficiaries, because of the growing realization that they will not be paid timely or at all.”

This ILWU-PMA case illustrates the need for all employer sponsored health plans to comply with federal ERISA regulations when making benefits determinations and payments.  Additionally, Providers need to level the playing field by ensuring they submit ERISA/PPACA compliant appeals which properly request due process and a full and fair review.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support services.

ILWU-PMA Coastwise Welfare Plan hit with class action lawsuit in Los Angeles federal court for allegedly not paying legitimate medical claims.

Avym Corporation provided plaintiff providers with ERISA appeal compliance and ERISA litigation support in this provider ERISA class action and Avym’s support services were instrumental in allowing multiple plaintiffs the chance to fight back.

Case Info: Amijo et al v. ILWU-PMA Coastwise et al U.S. District Court for the Central District of CA (Western Division- Los Angeles) Civil Docket for Case #: 2:15-cv-1403, Filed 02/26/2015.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support services.

On March 30, 2012, Federal Court Denied UnitedHealth’s (UHC) Motion, In Its Entirety As To All Claims, To Dismiss Providers’ ERISA Class Action, Alleging UHC’s Wrongful Overpayment Recoupment In Violation Of ERISA. Avym Offers Webinars To Examine The Legal Impact Of This Decision for All Payers and Providers.

On March 30, 2012, United States District Court of New Jersey denied UnitedHealth’s (UHC) motion, in its entirety as to all claims, to dismiss the providers’ ERISA class action alleging that UHC’s wrongful overpayment recoupment is in violation of federal law, ERISA. Avym now offers executive webinars to examine the profound legal impact for all providers and payers.

The Court case info: Premier Health Center, PC, et al. v. Unitedhealth Group, et al., Case #: 2:11-cv-00425, United States District Court District of New Jersey, Filed 03/30/12.

The insurance practice of overpayment recoupment has been and is becoming a larger legal and financial challenge for health plans, healthcare providers and patients to overcome. Almost all health care providers have been affected by an overpayment dispute over the past few years and according to industry estimates, more than 50% of the $2.6 trillion in annual US healthcare expenditure is subject to overpayment dispute.  Additionally, more than 10% of any previous and future reimbursements are subject to overpayment recoupment by the payers in both private and public sectors.

According to the Court document, the healthcare provider and their association plaintiffs are challenging defendants’ practices of improperly recouping previously paid health care benefits from providers without complying with procedural protections under ERISA, “Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment.” The Defendants seek dismissal of Plaintiffs’ Amended Complaint for lack of standing to sue and for having failed to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). The Court “ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims”, but granted defendants’ motions to dismiss claims, without prejudice, against two subsidiary companies of UHC.

The case factual background was described in the Court document:

“After performing its services, pursuant to the assignment of benefits form, Premier submits a claim to United who will then make payment to Premier on the claim. Occasionally, United will engage in post-payment audits of benefit payments. Following the post-payment audit process, United determined that they had erroneously made overpayments to the Plaintiffs and demanded repayment. Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment”.

From the court document: “Plaintiffs further allege that many of the United Plans at issue are governed by ERISA, “which establishes strict rules and procedures that United or other entities that administer ERISA plans must comply with.” Furthermore, “ERISA sets forth specific steps that must be followed when an insurer such as United makes an ‘adverse benefit determination’ by denying or reducing benefits, including by providing a ‘full and fair review’ of the decision.” “By making a retroactive determination that a previously paid benefit was, in fact, paid improperly, an insurer makes an adverse benefit determination under ERISA.” Plaintiff avers that “United has violated ERISA by making its retroactive adverse benefit determinations without complying with ERISA[’s] requirements.”

On January 24, 2011, Plaintiffs filed a complaint in the United States District Court for the District of New Jersey.  On April 22, 2011, YF Corporation’s ambulatory surgical center (ASC) client, Beverly Hills Surgical Center (BHSC), as a Named Class Plaintiff, filed a class-action in federal court against UnitedHealth Group for alleged ERISA violations through its abusive overpayment recoupment practice.  With assistance from YF Corporation, BHSC, which represents all ambulatory surgical center facilities, is the first ASC facility provider in the nation to combat abusive overpayment recoupment practices by filing an ERISA class action against UnitedHealth Group, the largest health insurer in America.

“On April 22, 2011, Plaintiffs filed an Amended Complaint, which is the subject of Defendants’ United and Health Net motions to dismiss. The parties have submitted their respective briefs and the Defendants’ motions are now ripe for this Court’s adjudication.”

The Court denied the Motion to Dismiss filed by United in its entirety, including denying UHC’s anti-assignment argument and upholding the standing of all providers’ national and state association plaintiffs: “In light of the above, the Court finds that based upon Defendants’ course of conduct with Plaintiffs, Defendants have waived any right to enforce the anti-assignment provision. Therefore, Plaintiffs have met their burden to establish standing to sue under ERISA.”

“Accordingly, the Court finds that the Associations have standing to bring ERISA claims on behalf of their individual members.”

“ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims.”

If the Court denied each and every legal argument by UHC in this class action for overpayment recoupment, what does this mean to every overpayment request by every payer?

To find out more about PPACA/ERISA Claims and Appeals Compliance Services from AVYM please click here.

Located in Los Angeles, CA, AVYM is a leading provider of services focusing entirely on the resolution of denied or disputed medical insurance claims by participating in the nation’s first ERISA PPACA Claims Appeals Certification program.  AVYM also offers free Webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support.