As One Door Potentially Closes, Another, More Substantial Door Opens For Self-Insured Health Plans
The January 20, 2016 Supreme Court Montanile decision potentially limits ERISA plan rights to subrogation lien recovery, but also potentially rewards trillions of dollars in plan assets recovery for all self-insured ERISA plans nationwide, from cross plan overpayment recoupments and offsets done by plan TPAs. All self-insured health plans should understand the Montanile decision’s trillion dollar impact.
The Supreme Court Montanile decision on January 20, 2016 limits an ERISA plan rights to subrogation lien recovery, but this decision also ensures potentially trillions of dollars in plan assets recovery for all self-insured ERISA plans nationwide, from all cross plan overpayment recoupments and offsets by plan TPA’s, as the Supreme court ruled: “[t]his rule applied to equitable liens by agreement as well as other types of equitable liens“.
The Supreme Court Montanile decision also limits and prohibits self-insured plan TPA’s from offsetting or converting self-insured plan claims payments into the TPAs own fully-insured account, for any alleged overpayments made from the TPA’s fully-insured plans, by claiming equitable relief under ERISA §502(a)(3);
While the case potentially limits ERISA plan rights to subrogation lien recoveries, the entire auto or personal injury subrogation lien market is relatively insignificant compared to the trillion dollar overpayment recoupment and offset market nationwide that exists within the $3.5 trillion in national healthcare expenditures.
Avym Corporation announces new, 2016 self-insured ERISA plan assets auditing and recovery projects, which are open to all large and medium self-insured ERISA plans, in order to (a) brainstorm, assess and realize the immediate true economic value of the Supreme Court Montanile decision; (b) immediately audit the plan assets for any possible conversion, embezzlement from the plan TPA’s cross plan overpayment recoupment or offset; (c) immediately recover or restore the plan assets under the Supreme Court Montanile decision and as required under ERISA statutory duties.
Supreme Court case info: Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, case #: 14-723, January 20, 2016
Supreme Court link to PDF copy.
Based on federal court documents and leading healthcare experts, billions of self-insured health plan claims assets may have been recouped or offset in order to satisfy alleged overpayments of fully insured plan claims.
Although the Supreme Court’s Montanile decision may have limited a plan’s right in the relatively small PI subrogation lien market, it has fundamentally and profoundly changed the landscape for medical claim overpayment offsets and recoupments, across separate plans and members, by self-insured plan co-fiduciary TPAs, in a practice otherwise known as “embezzlement ATM operations”
According to the Court Documents, the Supreme Court ruled:
- “Plan fiduciaries are limited by §502(a)(3) to filing suits “to obtain … equitable relief.“
- “[A]s here, an equitable lien by agreement, only against specifically identified funds that remained in the defendant’s possession or against traceable items that the defendant purchased with the funds.“
- “If a defendant dissipated the entire fund on items, the lien was eliminated and the plaintiff could not attach the defendant’s general assets instead.“
- “The Board’s arguments in favor of the enforcement of an equitable lien against general assets are unsuccessful. does not contain an exception to the general asset-tracing requirement for equitable liens by agreement.“
- “In sum, at equity, a plaintiff ordinarily could not enforce any type of equitable lien if the defendant once possessed a separate, identifiable fund to which the lien attached, but then dissipated it all. The plaintiff could not attach the defendant’s general assets instead because those assets were not part of the specific thing to which the lien attached.“
- “This rule applied to equitable liens by agreement as well as other types of equitable liens.“
The Supreme Court Montanile decision makes it perfectly clear, any alleged overpayment lien of a fully-insured plan cannot attach to a different, self-insured plan fund or claims payment and it’s a basic principle of ERISA that a TPA for a self-insured plan is absolutely barred from converting claims payment of plan assets from the self-insured plan to pay for an alleged overpayment lien and retain all recovery for its own fully-insured account, and can be viewed as self-dealing and embezzlement.
The only question now is whether self-insured plan fiduciaries will take immediate corrective actions to safeguard plan assets or wait till the DOL knocks on their door with an audit alert.
Ironically, the Supreme Court’s Montanile decision also protects the respondent, the Board of Trustees of the National Elevator Industry Health Benefit Plan, from any and all offsets or patient embezzlements based on alleged overpayments to non-National Elevator Industry Health Benefit Plan members.
Over the past 6 years, Avym has closely followed the decisions from the Supreme Court and federal appeals courts on ERISA prohibited self-dealing against ERISA plan TPA’s for managed care savings. These new ERISA embezzlement cases are just the initial impact of the court’s Hi-Lex decisions. This lawsuit in particular should serve as a warning and wake up call for all Plan Administrators to continually monitor their TPAs in accordance with the Plan Administrator’s statutory fiduciary duties and to discharge its duties with respect to a plan solely in the interest of the participants for the exclusive purpose of providing benefits to them.
Avym Corp. has been at the forefront and advocated for ERISA plan assets audit and embezzlement recovery education and consulting. Now with the Supreme Court’s guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs click here.