UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS- Case No. 09 C 5619 Filed: 10/12/12
PENNSYLVANIA CHIROPRACTIC ASSOCIATION, v. BLUE CROSS BLUE SHIELD ASSOCIATION
On October 12, 2012, the UNITED States District Court for the Northern District of Illinois denied BCBS motion for summary judgment in a Class Action Overpayment Dispute with providers. The court further determined that the disputed claims were subject to ERISA Notice and Appeal rights.
A Federal Court ruled that allegations of overpayments to providers due to plan coverage and medical necessity are ERISA denials and trigger ERISA notice and appeal rights. Providers are entitled to ERISA/PPACA compliant Explanation of Benefits (EOBs) and ERISA /PPACA appeal rights. This decision’s profound impact is that it protects patients and providers under the federal law ERISA in all overpayment disputes with ERISA plans. Furthermore, ERISA provides at least 180 days to appeal all claim denials. The District Court also denied the provider’s motion on class certification, due to the provider’s lack of valid ERISA assignment, among other things.
Avym Corporation offers webinars and advanced ERISA claim specialist programs to discuss the profound impact of the Court decision for all healthcare providers with respect to overpayment demands from payors. Discussion will also focus on how to correctly appeal overpayment demands with valid ERISA assignments, and in compliance with ERISA claim regulations.
This case offers clear and authoritative legal guidance in dealing with the issues of overpayment demands to providers. The Court made the summary judgment against the defendants and in favor of the plaintiffs on the following:
- “Entitlement to ERISA notice and appeal rights”
- “Adverse benefit determination”
- “Appeal rights”
- “Authorized Representative”
All employer sponsored health plans must comply with federal ERISA regulations when making demands for overpayment refunds. According to industry estimates, the amount of money that payors seek to recover from providers through overpayment demands is in the billions of dollars.
The following is the case background information according to court documents:
“Plaintiffs have sued a number of Blue Cross and Blue Shield entities for violations of the Employee Retirement Income Security Act (ERISA) and Florida law…… The defendants are Blue Cross and Blue Shield of America (BCBSA) and individual Blue Cross and Blue Shield entities (BCBS entities). BCBSA is a national umbrella organization that facilitates the activities of individual BCBS entities. Individual BCBS entities insure and administer health care plans to Blue Cross and Blue Shield customers (BCBS insureds) in various regions.”
Plaintiffs allege that defendants improperly took money belonging to plaintiffs. They allege that defendants would initially reimburse the provider plaintiffs for medical services they provided to BCBS insureds. Sometime afterward, plaintiffs allege, defendants would make a false or fraudulent determination that the payments had been in error. Defendants then would demand that individual plaintiffs repay the supposedly overpaid amounts immediately. If plaintiffs refused to do so, defendants would forcibly recoup the amounts they sought by withholding payment on other, unrelated claims for services plaintiffs provided to other BCBS insureds.
“Plaintiffs allege further that when defendants made these repayment demands, they typically did not provide adequate information regarding available review procedures. Plaintiffs allege that defendants sometimes failed to offer any appeal process at all. When an appeal process was available, plaintiffs allege, defendants refused to provide details about which patients, claims, and plans were claimed to be the subject of overpayment or “effectively ignored” plaintiffs’ appeals. Fourth Am. Compl. ¶ 18. Plaintiffs contend that this conduct deprived them of their right to a “full and fair review” under ERISA. 29 U.S.C. § 1133.”
“Although their complaint indicates otherwise, all four plaintiffs involved in the current motions state that they are not seeking final determination that the defendants’ repayment requests and recoupments were improper, but only an order “remanding” the claims to the insurance plans so that the plans can provide ERISA-compliant notice and appeal rights. As part of that remand, however, plaintiffs argue that defendants should be required to return all the money they have received from their repayment demands and recoupments, in order to return the situation to the status quo ante, that is, the situation as it existed before the repayment requests.”
“Overpayment determinations are basically ‘adverse benefit determinations’ and this court decision confirms ERISA as a powerful tool that must be understood by providers in this environment of escalating healthcare overpayment disputes.” said Vince Flores, President and Co-Founder of Avym Corporation and Certified ERISA/PPACA Medical Claims Appeals specialist .
To find out more about PPACA 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