BCBS IBC Ordered To Permanently Reform Its Overpayment Policies In Provider Class Action
In what is being seen as provider’s class action victory in the insurer-provider overpayment battle, an Illinois federal judge finalized a permanent injunction requiring BCBS Independence Blue Cross (IBC) to permanently reform its overpayment policies. BCBS IBC is permanently restrained and enjoined from issuing or pursuing any demand for repayment, or offsetting any new claims unless IBC complies with ERISA.
This permanent injunction in federal class action court establishes the first complete set of case laws for overpayment recoupment and offsetting denials, the number one health claims denial in the country and is a huge victory not only for Pennsylvania Chiropractic Association (PCA) members but also for every patient and provider in the country.
This court case provides final and absolute clarity to the “legal gray area” of overpayment recoupment practices engaged in by many of the nation’s biggest insurance carriers. The court has effectively answered the central question of whether insured’s overpayment demands trigger ERISA appeal rights with a resounding yes as insurers and Health Plans will be forced to comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar. Providers or patients that face BCBS or any payor recoupments or offsets would do well to understand the implications of this court ruling as well as their rights under ERISA.
In this landmark decision against a BCBS entity, Independence Blue Cross (IBC), “After a bench trial on December 2, 3, and 4, 2013, the Court found in favor of the Pennsylvania Chiropractic Association (PCA) on its ERISA claims against Independence Blue Cross (IBC). See Pa. Chiropractic Ass’n v. Blue Cross Blue Shield Ass’n, No. 09 C 5619, 2014 WL 1276585 (N.D. Ill. Mar. 28, 2014). The Court also concluded that PCA is entitled to an appropriate permanent injunction and directed the parties to brief “the question of the precise contours the injunction should take.” Id. at *18. PCA has now submitted a proposed permanent injunction, which requires IBC to provide ERISA-compliant notice and appeal when demanding that a health care provider repay previously issued health insurance benefits. For the reasons stated below, the Court approves PCA’s proposed injunction in part.” according to court document.
The injunction entered by U.S. District Judge Matthew F. Kennelly, forces IBC to comply with a “full and fair review” process, as established by ERISA, when denying any medical claims. Although this specific injunction only covers members of the Pennsylvania Chiropractic Association (PCA), it can be used as a “roadmap” for all providers and patients when dealing with overpayment requests or offsets.
If a provider or patient receives any requests for overpayments, the provider or patient has the right to request an appeal of the decision BEFORE any monies are recouped or offset. Also, the insurer must clearly explain why the money is being requested. The insurer must also detail the specific plan provision that it used in making its determination. Additionally, the insurer must let the provider or patient know exactly what material or documentation is needed to avoid repayment. Finally, the insurer must notify the provider or patient of appeal and litigation rights.
If the insurer continues with the recoupment demands, once the provider or patient appeals, the insurer must allow extra time for the appeal, provide a new reviewer of the claim (cannot be reviewed again by the same person), provide, free of charge, access to any relevant material that was used in the decision process such as documents, formulas or methodologies.
Case Info: Pennsylvania Chiropractic Association, et al. vs Blue Cross Blue Shield Association, et al., Case: 1:09-cv-05619 Document #: 919 Filed: 05/19/14, in the United States District Court for the Northern District of Illinois Eastern Division
Lost in all the excitement is the fact that the new healthcare reform regulations have adopted ERISA Claims regulations in their entirety. This means that these rules should apply across all health plans with very few exceptions. “(i) Minimum internal claims and appeals standards. A group health plan and a health insurance issuer offering group health insurance coverage must comply with all the requirements applicable to group health plans under 29 CFR 2560.503–1 …. with respect to health insurance coverage offered in connection with a group health plan, the group health insurance issuer is subject to the requirements in 29 CFR 2560.503–1 to the same extent as the group health plan.” according to PPACA regulations for Internal Claims and Appeals and External Review. http://webapps.dol.gov/FederalRegister/PdfDisplay.aspx?DocId=24056
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