Search results for CIGNA

Federal Appellate Court Clarifies and Approves ERISA Rights for Out-of-Network Providers regardless of Non-PPO Discount

More fallout from the recent Fifth Circuit Court of Appeals decision against Cigna: wide ranging implications for out of network provider reimbursement paradigm on a nationwide scale; 3rd party “re-pricing negotiation” agreements and (Non PPO) discounts would be preempted by ERISA if: “[t]he contracts by their terms are subject to the underlying ERISA plans”

In a recent federal appeals court decision, the court ruled against CIGNA and in favor of Out-Of-Network (OON) providers. All Out of network providers should be aware of the practical implications of this appellate court opinion; namely, that it allows out-of-network providers the right to sue, under ERISA, for all eligible payments under the plan terms, regardless of any third party cost containment or negotiation agreements (Non-PPO Discount Agreements) which are usually negotiated by intermediary companies on behalf of Cigna.

According to the appellate court’s ruling, Third Party “re-pricing negotiation” agreements and discounts will be preempted by ERISA if: “[t]he contracts by their terms are subject to the underlying ERISA plans”.

Even after re-pricing discounts have been negotiated, OON providers, with valid and complete assignments, have the right to seek all eligible payments according to the plan terms.  The profound impact of this appellate court ruling may fundamentally change the nation’s healthcare landscape and existing managed-care model.

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, Case No. 12-20695, in the United States Court of Appeals for the 5th Circuit, filed on March 10, 2015. 

Related case info:

Spinedex Physical Therapy USA, et al v. United Healthcare of Arizona, et al, Case No. 12-17604, in the United States Court of Appeals for the Ninth Circuit, filed on Nov. 5, 2014.

In its decision, the Fifth Circuit identifies Third Party “re-pricing negotiation” agreements and (Non-PPO) discounts relation to ERISA plans, as “[t]he contracts by their terms are subject to the underlying ERISA plans”.

The Court sheds some light on the issue:

“We turn next to the grant of summary judgment against North Cypress’s state contract law claims. According to the hospital, Cigna breached the terms of the “Discount Agreements”—contracts between North Cypress and Cigna requiring Cigna to pay a negotiated amount for specific insurance claims. The contracts by their terms are subject to the underlying ERISA plans.”

according to court documents.

OON providers typically receive “re-pricing” and discount requests every day, with little or no options-Until now. The fifth circuit decision has clarified OON provider’s ERISA legal standing to sue; and managed care contracting or re-pricing discount agreements cannot substitute or replace ERISA claim regulations.

The Fifth Circuit first addressed the district court’s ruling that ERISA did not preempt:

“The district court first addressed whether the Discount Agreement claims were preempted by ERISA, which “supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” This provision is “intended to ensure that employee benefit plan regulation would be ‘exclusively a federal concern,’” and as such, the Supreme Court has commented that the preemption provision is “conspicuous for its breadth” and is “deliberately expansive.” Nonetheless, the district court found that the contract law claims were not preempted because North Cypress could not bring the claims under ERISA….The court went on to rule on the merits, finding no breach because Cigna was entitled to reduce payment under the terms of the “Discount Agreement” contracts.”

according to court documents.

The Fifth Circuit vacated the district court’s non ERISA preemption decision and found for North Cypress’ ERISA legal standing to sue, and remanded for ERISA preemption consideration for (Non-PPO) Discount Agreement contracts:

“In holding that North Cypress has standing to bring ERISA claims, we removed the foundation of the district court’s preemption ruling. The parties have not briefed the issue of whether the Discount Agreement claims nonetheless survive un-preempted. Accordingly, we vacate the grant of summary judgment and remand so that the district court may consider the question of preemption in light of our ruling on standing.”

according to court documents.

Avym is headquartered in in Los Angeles, CA and is the leading provider of ERISA/PPACA health claim appeal services, reimbursement compliance, overpayment recoupments and offsets appeals, dead claims recovery services and ERISA/PPACA healthcare claim litigation support services.  To get more information or to contact Avym, click here.

Silva v. Metropolitan Life Insurance Company

Case No. 13–2233.

Submitted January 14, 2014. Filed on August 7, 2014 United States Court of Appeals, Eighth Circuit

Silva v. Metropolitan Life Insurance Company, No. 13-2233 [8th Cir]

Brief of the Secretary of Labor, Thomas E. Perez-As Amicus Curiae in support of plaintiff

Ramifications of Court Decision:

  1. Following the Supreme Court’s decision in Amara, the 8th Circuit recognizes the remedy of surcharge could be available to provide monetary “compensation” for a loss resulting from a trustee’s breach of duty.  The court cited the 4th circuit decision saying,”The Fourth Circuit stressed why allowing plan participants to seek the full amount of benefits for a breach of fiduciary obligations under § 1132(a)(3) is so important:
    [W]ith Amara, the Supreme Court clarified that remedies beyond mere premium refunds . . . are indeed available to ERISA plaintiffs suing fiduciaries under Section 1132(a)(3). This makes sense—otherwise, the stifled state of the law interpreting Section 1132(a)(3) would encourage abuse by fiduciaries. Indeed, fiduciaries would have every incentive to wrongfully accept premiums, even if they had no idea as to whether coverage existed—or even if they affirmatively knew that it did not. The biggest risk fiduciaries would face would be the return of their ill-gotten gains, and even this risk would only materialize in the (likely small) subset of circumstances where plan participants actually needed the benefits for which they had paid. Meanwhile, fiduciaries would enjoy essentially risk-free windfall profits from employees who paid premiums on non-existent benefits but who never filed a claim for those benefits. With Amara, the Supreme Court has put these perverse incentives to rest and paved the way for [the plaintiff] to seek a remedy beyond mere premium refund.
  2. Reformation and Equitable Estoppel could be allowed as a remedy to the fiduciary’s failure to provide the SPD.  According to the court, “Silva argues that MetLife “waived” the “evidence of insurability” provision in the Plan because the company appeared to approve Abel’s request for coverage when it began to deduct premium payments. Silva argues a remedy for his claim exists in the equitable theory of reformation. We find support for this in Amara’s discussion of reformation under § 1132(a)(3).See Amara, 131 S. Ct. at 1879. There, the Court stated that “[t]he power to reform contracts (as contrasted with the power to enforce contracts as written) is a traditional power of an equity court, not a court of law, and was used to prevent fraud.” Id. (citations omitted). On remand, the District of Connecticut described the reformation remedy available under § 1132(a)(3) as allowing courts “to reform contracts that failed to express the agreement of the parties, owing either to mutual mistake or to the fraud of one party and the mistake of the other.” Amara v. CIGNA, 925 F. Supp. 2d 242, 252 (D. Conn. 2012).
  3. The court finds that a claimant can plead, in the alternative, claims for benefits and breach of fiduciary duty.  The court goes on to say“It [is] well established in [the Sixth] Circuit that plaintiffs [can] bring claims for breaches of fiduciary duty in ERISA cases, and [can] even do so alongside a claim for benefits in certain circumstances.”

According to the court documents, “However, the Supreme Court’s decision in Amara changed the legal landscape by clearly spelling out the possibility of an equitable remedy under ERISA for breaches of fiduciary obligations by plan administrators. Amara, 131 S. Ct. at 1881. The Amara Court directly addressed the need for this remedy, stating: “[i]t is not difficult to imagine how the failure to provide proper summary information, in violation of the statute, injured employees. . . . We doubt that Congress would have wanted to bar those employees from relief.” Amara, 131 S. Ct. at 1881.

Silva argues the remedy for his claim against Savvis is the equitable theory of surcharge. The Amara Court described equitable surcharge under § 1132(a)(3) as follows:

Equity courts possessed the power to provide relief in the form of monetary “compensation” for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment. Indeed, prior to the merger of law and equity this kind of monetary remedy against a trustee, sometimes called a “surcharge,” was “exclusively equitable.”
The surcharge remedy extended to a breach of trust committed by a fiduciary encompassing any violation of a duty imposed upon that fiduciary.

Amara, 131 S.Ct. at 1880 (internal citations and citations to authority omitted). To obtain relief under the surcharge theory, a plan participant is required to show harm resulting from the plan administrator’s breach of a fiduciary duty. See Amara, 131 S. Ct. at 1881–82 (“We believe that, to obtain relief by surcharge for violations of §§ [1022 and 1024(b)], a plan participant or beneficiary must show that the violation injured him or her. But to do so, he or she need only show harm and causation. Although it is not always necessary to meet the more rigorous standard implicit in the words ‘detrimental reliance,’ actual harm must be shown.”).”

With respect to the Reformation remedies, the court concluded:”On remand, Silva may be able to show mutual mistake or “fraud of one party and the mistake of the other.” See Id. It was arguably fraudulent for MetLife to collect premiums from a Savvis employee who, MetLife now argues, never had an approved policy. Further, MetLife did not just erroneously collect premiums from Abel—an internal MetLife investigation showed that roughly 200 Savvis employees had been paying premiums for policies that were never approved by MetLife. We conclude that Silva is allowed to make his waiver argument on remand, and if successful, receive monetary damages, as will be discussed below.”

The court goes on to recognize an equitable estoppel remedy may be available, “Because MetLife admitted error in collecting the premiums and Abel relied on that collection as proof that he had a policy, Silva argues that MetLife should also be equitably estopped from claiming that no policy existed. Again, without resolving Silva’s claim on the merits, we find that this alleged wrong can survive a Rule 12(b)(6) motion because relief could be granted under § 1132(a)(3)’s catchall provision using the traditional equitable estoppel theory discussed in Amara, 131 S. Ct. at 1880. The concept of equitable estoppel is simple; it “operates to place the person entitled to its benefit in the same position he would have been in had the representations been true.” Id. (citation omitted).

10 Tips for Demystifying Your ERISA Health Insurance Plan

  1. Get A Copy Of The Full Health Plan– The complete Plan usually will not be a SBC, SPD (benefit summary) or a print-out from a website. It will be, on average, at least 25-50 pages long. The insurance company or claims administrator will likely not have a copy of the full Health Plan. You can request a copy of the full Health Plan from your Human Resources department.  By law, they are required to give you a copy if requested. A customer service representative for a health insurance company or claims administrator may be able to verify to you what your benefits are over the telephone.  Unfortunately, you cannot rely on what a representative tells you over the phone.
  2. Once You Get A Copy Of Your Full Plan-Read It!– The Plan document controls the benefits available, regardless of what anybody tells you over the phone. This document should contain all coverage levels, claims review procedures, policy exclusions, restrictions etc.. for any and all benefits of the Health Plan.  Read it.
  3. Also Look At The Insurer’s Own Guidelines– Despite the fact that the Health Plan should include all terms of coverage, many times the insurer or claims administrator will apply their own criteria or guidelines to claims decisions. You can find many criteria or guidelines for claims administrators such as BCBS, UHC, Cigna, and Aetna on the internet.
  4. Find Out If Your Health Plan Is Fully Insured Or Self-Insured– Many times ERISA law preempts State Department of Insurance Laws.   Frequently, plans that are funded by an employer must be in compliance with federal ERISA law. Large employers such as Bank of America, and Union Plans, are usually self-insured Plans.
  5. Find Out Who The Plan Administrator Is– Look for a name and address of the Plan Administrator in the Health Plan. If your claim has been denied, send a written request to the Plan Administrator requesting a full and fair review of the denial as well as all plan documents. The Plan Administrator is required to provide the plan documents to you within 30 days. Federal regulations allow you to file a lawsuit to seek penalties from the Plan Administrator in the amount of $110 per day for each day the plan documents are not provided.
  6. Find Out Who Has “Discretionary Authority” To Decide Your Claim– Discretionary Authority usually means that an entity, with “discretion” (claims administrator or insurer), has permission to make decisions about your claims.   An example of discretion in a Plan may be: “Aetna has discretionary authority to determine benefit eligibility and construe the terms of the Plan.” If an entity that has “discretion” is also the entity that pays the claim, then the entity may have a conflict of interest.
  7. Understand the Claims Procedures Of Your Plan– You should be aware of how much time you have to submit a claim and to whom and where you have to submit the Claim.  You should also know the Appeals and Grievance procedures of your Plan.  If your claim is denied, read the appeals or grievance section to determine your appeal rights and deadlines. Generally, the first appeal must be submitted within 180 days of the denial pursuant to ERISA. However, a second level appeal can be a much shorter time period, as little as 30 or 45 days!  This link provides a good overview of ERISA claims procedures and rules:
  8. Know The Statute Of Limitations In Your Health Plan– The statute of limitations usually refers to the amount time you have to file a lawsuit to obtain denied benefits. In order to file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two).  This is also known as exhausting your administrative remedy. The statute of limitations may appear in a section titled “Legal Action.”
  9. Know Your Out-Of-Pocket Costs– Annual deductibles, co-pays, and co-insurance can be quite confusing and many times they are applied incorrectly.  Keep track of how much of your own money you are spending.  Read the Explanation of Benefits (EOBs) that the claims administrators or insurers send you.  Compare and calculate the EOBs with your own calculations to ensure your claims are paid in full.
  10. Above All Else, Always Remember To Keep It Simple– If all this seems overwhelming, remember, the law requires the Health Plan to act in YOUR BEST INTEREST.  The laws are clear: “The primary responsibility of the Health Plan is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers, or the plan sponsor”.

Obama Administration Advocates for Out-of-Network Providers and Patients in Federal Appeals Courts –

On April 7, 2014 and April 28, 2014, the Obama administration’s Department of Labor (DOL), argued in the 9th and 5th Circuit Courts, on behalf of out-of-network providers and patients against health plans, on whether providers must balance bill patients before billing health plans.

On April 7, 2014 and April 28, 2014, the Department of Labor (DOL), argued in the 9th and 5th Circuit Courts, advocating for out-of-network providers and patient’s rights against health plans, on whether providers must first balance bill patients before billing health plans. All out of network providers and patients should understand the court impacts of the DOL amicus briefs and oral arguments.  Approximately 76% of Americans insured through their employer-sponsored health plans have paid for out-of-network coverage, according to the December 2013 National Composition Summary from DOL Bureau of Labor Statistics.

In arguing for out-of-network patients’ right to timely, vital healthcare and against having to pay full deductibles and coinsurance upfront, the DOL effectively argued against the current out-of-network claim denial practice by United and CIGNA:

“Thousands of healthcare claims are made in this country every day, and some are litigated, and yet no circuit court has ruled that providers must first bill their patients before they may enforce legitimately assigned benefits claims. …. Limiting physicians’ first recourse to their patients will have chilling effects both on providers and plan participants. Participants may forgo or delay vital healthcare because they cannot finance or they cannot pay for their care, and providers may limit their care to those participants whose health plans have previously paid properly signed healthcare claims or participants who are able to first to pay for the care, or the provider can recognize as creditworthy. Affirmance of the district court ruling can only benefit conflicted administrators, such as United, that both fund and administrator ERISA plans, by allowing them to forestall payments for substantially expensive medical care or maybe avoid that payment altogether”, according to the court audio records.

Avym Corporation closely monitors and demystifies the latest federal court developments for all out-of-network patient advocates and claims specialists, with new ERISA and PPACA reimbursement compliance seminars.

“The court rulings from both 9th and 5th Courts of Appeals will have a profound impact on the approximately 76% of Americans insured through employer-sponsored health plans, as they have paid for out-of-network coverage but may not be able to pay upfront for their full deductible and coinsurance before seeking timely, vital healthcare,” says Mark Flores, Vice President/Co-Founder of Avym Corporation and a national expert on ERISA and PPACA compliance appeals.

Case Info: Spinedex Physical Therapy USA, et al v. United Healthcare of Arizona, et al, Case No. 12-17604, in the United States Court of Appeals for the Ninth Circuit, on April 7, 2014.  Oral argument recording:

Spindex Physical Therapy USA, Inc. Amicus Brief, in support of plaintiffs-appellants and requesting reversal:

Case Info: North Cypress Medical Center, et alv. Cigna Health, Case No. 12-20695, in the United States Court of Appeals for the Fifth Circuit, on April 28, 2014.  Oral argument recording:

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

Among other things, the DOL added, “Assignee physicians with validly assigned benefits claims have standing to pursue those claims regardless of whether or not if they first billed their patients,” argued Marcia Elizabeth Bove, DOL attorney for the Secretary of Labor, according to the court audio records.

“By listening to the arguments from both sides of the healthcare matrix, out-of-network providers and patients may have much better understanding on the vital difference between patients, providers and health care plans. The federal Courts of Appeals are expected to make these landmark decisions in the next a few months for the market lifespan of the out-of-network and managed care business model,” says Dr. Jin Zhou, president of, a national expert on ERISA and PPACA compliance appeals.

December 2013 National Composition Summary from DOL Bureau of Labor Statistics:

US Supreme Court Prompts New Health Insurance Verification Laws-$77,974 in Money Damages Surcharge

The 7th circuit panel, citing a recent Supreme Court decision, seems to have established new insurance verification laws under ERISA, in a case where a patient is entitled to a $77,974 monetary damage award after her health plan falsely verified coverage for a procedure when none existed thereby creating an ERISA fiduciary breach, holding the plan fiduciary liable for money damages as an equitable relief under ERISA, by failing to provide accurate and complete coverage information and/or means to obtain authoritative and binding information specifically requested by a patient or provider prior to the treatment.

Case info: Deborah Kenseth v. Dean Health Plan, Inc., In the United States Court of Appeals for the Seventh Circuit, Case No. 11-1560, Decided June 13, 2013.

This is the first court decision in the 37 year history of ERISA that provides money damage protection against a plan’s false coverage verification loophole in violation of ERISA, even if no true coverage existed under the plan. The court decisions have profoundly changed the entire healthcare industry compliance and litigation landscape with respect to insurance coverage verification and/or precertification for both in-network and out-of-network patients, providers, health plans and managed care TPA’s.

The facts of the case are commonplace in the healthcare industry: A doctor recommended gastric bypass surgery for Kenseth in 2005 to deal with complications from a previous surgery in 1987. At the time of the gastric bypass surgery, Kenseth worked for Highsmith Inc., which used Dean Health to provide health insurance benefits to its workers. She called a Dean Health customer service representative to get pre-approval for the surgery and was told that her surgery would be covered and all she had to pay was a $300 deductible. Kenseth underwent the surgery which cost close to $78,000 in medical bills. The claim was then submitted to the health insurer for payment. One day after her surgery, the plan decided to deny coverage for the surgery and all associated services based on the exclusion for services related to a non-covered benefit or service, namely, surgical treatment of morbid obesity, according to the court documents. Kenseth eventually got a bill from her provider for nearly $78,000.

After exhausting all her appeal remedies, she sued the plan in federal court for ERISA fiduciary breach and reimbursement of surgical costs of $77,974. The district court twice ruled against her and she twice appealed to the 7th Cir. Court, losing the first one but winning the second appeal, due to a recent Supreme Court decision in Cigna Corp. v. Amara, 131 S. Ct. 1866 (2011, Case No. 09–804), clarifying the relief available for a breach of fiduciary duty in an action under the ERISA, according to the court document.

The 7th Cir. Court concludes: “Cigna substantially changes our understanding of the equitable relief available under section 1132(a)(3). Kenseth has argued for make-whole relief in the form of monetary compensation for a breach of fiduciary duty from the start of this litigation. We now know that, in appropriate circumstances, that relief is available under section 1132(a)(3). See Cigna, 131 S. Ct. at 1881-82”, according to the court document.

In addition to the new money damage remedies available under ERISA, the 7th Cir. Court also clarifies the plan’s fiduciary duties or obligations to provide “accurate and complete” information and documents when a patient or provider inquires about insurance coverage, regardless of in-network or out-of-network provider status.

The 7th Cir. Court clarifies: “we have previously held that an insurer has an affirmative obligation to provide accurate and complete information when a beneficiary inquires about her insurance coverage…….The most important way in which the fiduciary complies with its duty of care is to provide accurate and complete written explanations of the benefits available to plan participants and beneficiaries……But if the documents are ambiguous or incomplete on a recurring topic, a fiduciary may be liable for mistakes that representatives make in answering questions on that subject”, according to the court document.

Avym Corporation offers new seminars to examine why and how these new court decisions will immediately and profoundly change the entire healthcare industry’s insurance coverage verification and/or precertification process for both in-network and out-of-network patients, providers, health plans and managed care TPA’s; how health plans should comply with ERISA in order to avoid money damage ERISA surcharge; and how to obtain money damage reimbursement even without a plan coverage if a plan breached its ERISA fiduciary duties and harmed a patient, as prescribed by the Supreme Court.

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

U.S. Supreme Court: PPACA/ERISA pave the way to overcoming the No. 1 Health Claim Denials and Litigation issue in 2012 – Cost-Sharing War

In The Wake Of Recent Insurer Litigations, Claim Denials And Auditing Against Healthcare Providers and Patients For Alleged Deductible And Co-Insurance Waiver Practice, AVYM Offers Compliance Webinars On The Latest Supreme Court Decisions, PPACA And ERISA Regulations.

A nationwide increase in insurer litigations, claim denials and auditing against healthcare providers for alleged deductible and co-insurance waiver practices by providers, has created a need for AVYM to offer healthcare executive compliance Webinars which will include issues on the latest Supreme Court decisions, PPACA and ERISA regulations for compliance and solutions to increasing insurers national health claim denials and litigations in 2012.

AVYM Webinars will:

  1. Focus on the number one healthcare dispute right now in the U.S. against  health plans, providers and patients as well as the relevance of recent US Supreme Court decisions and their effects on claims denials, audits, and litigation of claim disputes. 77% of insured Americans under employer sponsored health plans are affected by these issues.
  2. Analyze the new federal health reform law, PPACA claim regulations, which have adopted ERISA law as the minimum claim regulations standard for all health plans which now includes individual market claims outside of Medicare
  3. Analyze and discuss ERISA claim regulation which, for the last 36 years, has provided very specific provisions regulating the “circumstances which may result in disqualification, ineligibility, or denial or loss of benefits”, such as cost-sharing waiver practice faced by every patient and provider.
  4. Discuss the differences between compliant and non-compliant practices for waiver of cost-sharing.

In review of healthcare headline news of 2012, it is evident that the No. 1 payor and provider litigation and claim dispute issue that is now escalating to the top of the radar screen is a “deductible and co-insurance war” for all.

“While health care providers are being sued for not collecting patient deductibles in the west coast but also for collecting patient’s deductible and denied claims in the east coast, it cannot be said that health plans and insurer’s litigations are not all without merits. Nevertheless, the nationwide explosive and mass claim auditing and litigation should prompt all of us to ask one simple question: what does the Supreme Court, PPACA and ERISA regulations say about this new billion dollar question?”

Of particular importance, AVYM’s healthcare executive Webinar will have in-depth discussions on compliant cost-sharing waiver practices, along with when and why the claims can or cannot be denied for cost-sharing waivers and reductions:

  1. HHS/OIG Guidance on compliance for cost-sharing waivers and reductions:
  2. ERISA requires the administrator of an employee benefit plan to give participants a Summary Plan Description (SPD) and a summary of any material modifications (SMM) that are “sufficiently accurate and comprehensive to reasonably apprise [them] * * * of their rights and obligations under the plan.” (
  3. “The Summary Plan Description shall contain the following information: “circumstances which may result in disqualification, ineligibility, or denial or loss of benefits;” 29 U.S.C. §1022(b);
  4. The SMM must provide notice of changes in those circumstances, 29 U.S.C. 1022(a);
  5. The SPD and SMM must “be written in a manner calculated to be understood by the average plan participant,” 29 U.S.C. 1022(a);
  6. SPD and SMM must not have the effect [of] misleading, misinforming or failing to inform participants.” 29 C.F.R. 2520.102-2(b). 29 U.S.C. 1024(b).
  7. ERISA Civil enforcement: (a) Persons empowered to bring a civil action A civil action may be brought — (1) by a participant or beneficiary……(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; 29 U. S. C. §1132(a)(1)(B); (
  8. Recent Supreme Court decision on participant right and plan authority under ERISA, for cost-sharing disputes. Kennedy v. Plan Administrator for Dupont Savings and Investment Plan et al. (No. 07–636), 01/26/20089. “ERISA provides no exception to the plan administrator’s duty to act in accordance with plan documents. Thus, the Estate’s claim stands or falls by “the terms of the plan,” 29 U. S. C. §1132(a)(1)(B), a straight for-ward rule that lets employers “ ‘establish a uniform administrative scheme, [with] a set of standard procedures to guide processing of claims and disbursement of benefits,’ ”
  1. Latest U.S. Supreme Court decision for all ERISA claims: “Cigna v. Amara, (No. 09-804), 05/16/2011. “We conclude that the summary documents, important as they are, provide communication with beneficiaries about the plan, but that their statements do not themselves constitute the terms of the plan”. (
  1. PPACA & ERISA claim regulations on claim denials and appeals due to deductible and co-insurance waiver dispute and litigations. (

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.

Franco v. Connecticut General Life Ins. Co.

Case 2:07-cv-06039-SRC–PS
Court Ruled Against CIGNA & UHC UCR Class Actions by Out-of-Network Providers On Poor ERISA Assignment.
Franco v. Connecticut General Life Ins. Co.PDF file
Ramifications of Court Decision:

  1. The court concluded that standard industry provider assignment of benefits are only limited assignment under ERISA and legally useless, but a complete ERISA assignment of benefits is required for all ERISA appeals and lawsuits by third-party providers.
  2. What exactly does an ERISA complete Assignment of Benefits mean?
  3. How to secure a valid and complete ERISA compliant Assignment of Benefits?
  4. Why is ERISA Assignment of Benefits Form required for both in and out of network providers?

“At best, the allegations provide only the most ambiguous and conclusory information about what the purported assignments entail. At worst for Provider Plaintiffs, they indicate that the assignments were limited to a patient’s assigning his or her right to receive reimbursement from CIGNA for the covered portion of the service bill, which in no way can be construed as tantamount to assigning the right enforce his or her rights under the plan. The Court cannot conclude, based on the information supplied in the Complaints, that the assignments encompass a CIGNA-insured’s claim to benefits, such that any of the Provider Plaintiffs can legally be deemed a “participant or beneficiary” of his or her patient’s ERISA health plan. Simply put, Provider Plaintiffs have not met their burden of demonstrating that they have derivative standing to sue under ERISA.”

Do you have UCR Denials?

Cautionary tale of National Class Action against Cigna
and what NOT to do.

UCR lawsuit gets thrown out of court- Millions lost! AMA and Multiple Providers file class action lawsuit only to have case dismissed for missing one document.

Franco v. Connecticut General Life Ins. Co.
(Case 2:07-cv-06039-SRC–PS)[ref]FRANCO et al v. CONNECTICUT GENERAL LIFE INSURANCE CO. et al [/ref]was filed in federal court, as one of the largest UCR class actions, by several patients, numerous out-of-network providers, several provider State Associations and the American Medical Association (AMA), alleging violations of ERISA for wrongful UCR denials and reimbursement. UCR denials are the most common denials in the nation. Typically, Usual, Customary and Reasonable (UCR) denials can be seen as “low-payments”, in other words claims that are paid at an exceedingly low rate to out of network providers.

Here is a hypothetical example of this type of denial:
Patient A has first-rate health insurance – with 70% coverage and zero deductible. The doctor bills the insurance company $1000 for the procedure, expecting a payment of $700. The doctor receives payment of $50 from insurance company based on alleged UCR. At this point the doctor can appeal or go after the patient for the balance. Since the doctor does not know how to submit an ERISA compliant appeal, patient A or the doctor will be left holding the bag for the remaining $950.

For many patients these denials lead to huge unpaid medical bills. As a result we see more Americans filing for personal bankruptcies for unpaid medical bills. Additionally, as reported by amednews, a survey by the Texas Medical Assn. said that about 51% of physicians whose practices had cash flow problems drew from their own accounts to keep their practice going.[ref][/ref]

The AMA, State Associations, Providers and patients decided to initiate a federal class action lawsuit against the insurer CIGNA for the UCR denials described above.

According to the court documents, the federal Court found that “Provider Plaintiffs have failed to establish that they may stand in the shoes of CIGNA plan participants or beneficiaries as assignees of their patients’ rights.” In other words, provider plaintiffs failed to provide a “complete” ERISA Assignment, which lead the court to dismiss the State Associations & provider plaintiffs and the UCR complaints.

A “complete” ERISA complaint assignment must contain very specific language that “must encompass the patient’s legal claim to benefits under the plan”. A “complete” assignment is required for healthcare providers to appeal or sue on behalf of the patient, whether they are in or out of network. Patients can “properly”, [ref] DOL FAQ B3[/ref] assign a healthcare provider to “stand in their shoes” as an authorized representative.

Most healthcare provider assignments merely allow the provider or hospital to receive payments directly from the patient’s health benefits insurer. What the AMA, State Associations and virtually all healthcare providers currently use are “limited” Assignments, which the court concluded is basically useless. Again, this was the reason the Court dismissed all UCR ERISA claims asserted by all provider plaintiffs, State Associations and the AMA in the Franco v. Connecticut General Life Ins. Co. federal class action case — because they were missing ONE document!

Simply put, without a “complete” assignment most healthcare providers cannot meet their burden of demonstrating that they have derivative standing under ERISA. This is the critical first step in claim reimbursement, appeals, and ultimately lawsuits in federal court. The State Associations and healthcare providers in this lawsuit missed a tremendous opportunity for recovery of lost revenue but hopefully learned a valuable, yet expensive lesson.

If you would like to find out how to secure a valid and “complete” ERISA assignment please contact us for a free webinar. This new webinar will discuss this Court decision in detail and explain why healthcare providers nationwide have failed in ERISA compliance of valid Assignment of Benefits.

The webinar will also cover the following topics in great detail:

  • What exactly does an ERISA complete Assignment of Benefits mean.
  • Why an ERISA Assignment of Benefits Form is required for both in and out of network providers.
  • How to secure a valid and complete ERISA compliant Assignment of Benefits.