7th Circuit Court of Appeals: Medical Provider Entitled to 3rd Party Fee Schedules; “Must Be a Beneficiary”

In a  Significant Ruling for All Plan Sponsors, Insurers and Medical Providers, the Seventh Circuit Court of Appeals Sides With Medical Provider; Rules Plan Must Provide Third Party Repricing Documents & Methodologies Relied Upon by Plan to Determine “Usual, Reasonable and Customary Rates” and Medical Provider is Eligible for Statutory Damages; “Must be a Beneficiary”

The case is based on very common fact patterns where an out-of-network medical provider verified benefits for the patient of an ERISA governed plan, confirming benefits would be paid at the “usual, reasonable and customary rate”. Before performing services the patient assigned the provider rights under the plan to “pursue claims for benefits, statutory penalties, [and] breach of fiduciary duty ….” The provider then performed services expecting a certain level of reimbursement. When the Plan failed/refused to pay the expected amount, the medical provider appealed for, among other things, the SPD and documents, rate tables and methodologies used to support her payment.

After 6 months, the Plan responded that a third party vendor, data iSight, priced the claim and the provider should reach out to them to try and negotiate a higher amount. The provider decided she had exhausted the administrative remedy, under the premise that 6 months was “unreasonable” and sued for: Damages for Unpaid Benefits, 29 U.S.C. § 1132(a)(1)(B); Breach of Fiduciary Duty, 29 U.S.C. § 1132(a)(3) and Statutory Penalties, 29 U.S.C. § 1132(c)(1). The district court dismissed her complaint. However, the 7th Circuit court disagreed, holding that: “Dr. Griffin adequately alleged that she is eligible for additional benefits and statutory damages, we affirm the judgment only as to Count 2, vacate the judgment as to Counts 1 and 3, and remand Counts 1 and 3 for further proceedings.

Case info: W.A. Griffin v. TEAMCARE, Central States Health Plan 7th Cir., and TRUSTEES OF THE CENTRAL STATES Case No. 182374 US District Court of Appeals Seventh Circuit

On the first count, Damages for Unpaid Benefits, 29 U.S.C.§ 1132(a)(1)(B) the court held:

“Dr. Griffin challenges the district court’s ruling that she did not state a claim for unpaid benefits. She argues that she adequately plead that the plan covered the medical treatment she provided T.R. and that she did not need to cite in her complaint a plan provision establishing coverage at the amount she billed. We agree. “[P]laintiffs alleging claims under 29 U.S.C.§ 1132(a)(1)(B) for plan benefits need not necessarily identify the specific language of every plan provision at issue to survive a motion to dismiss under Rule 12(b)(6).” Innova Hosp. San Antonio, Ltd. P’ship v. Blue Cross & Blue Shield of Ga, Inc., 892 F.3d 719, 729 (5th Cir. 2018).

The court goes on to explain, that the Plan’s argument, “Requiring that Dr. Griffin to allege provisions to support something that was undisputed, -the existence of coverage-was error.” The court further noted that because Dr. Griffin was paid “something“, it was plausible the services were covered. 

Additionally, the court reasoned that requiring Dr. Griffin to name a specific plan provision entitling her to higher reimbursement, was not necessary, since she clearly alleged she was not paid the usual, reasonable and customary amounts, consistent with section 1109 of the plan. According to the court:

To require her to be more specific is to turn notice pleading on its head. Indeed, as discussed later, Dr. Griffin did not have the information necessary to allege with more detail where the plan’s calculation of the usual and customary rate went astray.”

On count 3, Statutory Penalties, 29 U.S.C. § 1132(c)(1), the court explains why Dr. Griffin could be entitled to statutory penalties :

“Finally, Dr. Griffin argues that as T.R.’s assignee, she is a beneficiary of the plan, eligible for statutory penalties based on Central States’s failure to provide the documents she requested within 30 days. See 29 U.S.C. §§ 1024(b)(4), 1132(c)(1). Central States takes the position, supported by one citation to a district-court decision, that an assignee does not step into a beneficiary’s shoes for the purpose of enforcing statutory penalties. See Elite Ctr. for Minimally Invasive Surgery, LLC v. Health Care Serv. Corp., 221 F. Supp. 3d 853, 860 (S.D. Tex. 2016). Thus, Central States concludes, it could not be liable for not timely providing documents to Dr. Griffin.

But in Neuma, Inc. v. AMP, Inc., we remanded to the district court for a determination of whether penalties should be awarded to an assignee under section 1132(c)(1), thus assuming that assignees could seek penalties. 259 F.3d 864, 878–79 (7th Cir. 2001). Central States’s position is inconsistent with our prior precedent and is contrary to the purposes of a plenary assignment of rights under the plan. ERISA defines “beneficiary” as “a person designated by a participant … who is or may become entitled to a benefit [under an employee benefit plan].” 29 U.S.C. § 1002(8). An assignee designated to receive benefits is considered a beneficiary and can sue for unpaid benefits under section 1132(a)(1)(B)—something the plan does not dispute. See Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991). Bringing that suit (or an administrative appeal) requires access to information about the plan and its payment calculations— here, how Central States determined the usual, reasonable, and customary rate. Mondry, 557 F.3d at 808; see also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 118 (1989) (disclosure ensures that “the individual participant knows exactly where he stands with respect to the plan” (citing H.R.Rep. No. 93–533, p. 11 (1973), U.S.Code Cong. & Admin. News 1978, p. 4649)).

It follows that Dr. Griffin also must be a beneficiary able to sue when she is denied requested information.

Central States argued that even if Dr. Griffin is a beneficiary, she still did not state a claim for statutory damages because it sent her the summary plan description, and ERISA did not require it to provide either Data iSight’s fee schedules and rate tables or its contract with Blue Cross Blue Shield. The court shot down the Plans arguments regarding the disclosure of documents as  “meritless“, based on the fact the Plan ultimately provided Dr. Griffin the SPD, albeit 6 months late, and because the Plan readily admitted that it used Data iSight’s figures to calculate the payment which constituted, in part, the Plan’s “pricing methodology” and the basis for the payment. 

This case illustrates the importance of ERISA compliance and properly disclosing all relevant materials used to determine benefits payments. It is clear that Plan Administrators and Fiduciaries should respond to any appeals and document requests in accordance with section 104 (b) (2) and 104 (b) (4) of ERISA, and pursuant to the interpretation of “plan document” from DOL Advisory Opinions, 96-14A, which states:

it is the view of the Department of Labor that, for purposes of section 104 (b) (2) and 104 (b) (4), any document or instrument that specifies procedures, formulas, methodologies, or schedules to be applied in determining or calculating a participant’s or beneficiary’s benefit entitlement under an employee benefit plan would constitute an instrument under which the plan is established or operated, regardless of whether such information is contained in a document designated as the “plan document”. Accordingly, studies, schedules or similar documents that contain information and data, such as information and data relating to standard charges or calculating a participant’s or beneficiary’s benefit entitlements under an employee benefit plan would constitute “instrument under which the plan is… operated.

Plan Administrators, fiduciaries, TPAs and medical providers all should also look to the DOL for guidance on the matter, specifically, DOL FAQs About The Benefit Claims Procedure Regulation:

FAQ B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

What documents will be required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decision making. See 65 FR at 70252… the department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant’s claim.

For nearly 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.

Aetna Medical Director Admits Under Oath He Never Reviewed Medical Records

California’s insurance commissioner has launched an investigation into Aetna after learning a former medical director for the insurer admitted under oath he never looked at patients’ records when deciding whether to approve or deny care.

Original story Story by Wayne Drash, on CNN

California Insurance Commissioner Dave Jones expressed outrage after CNN showed him a transcript of the testimony and said his office is looking into how widespread the practice is within Aetna. “If the health insurer is making decisions to deny coverage without a physician actually ever reviewing medical records, that’s of significant concern to me as insurance commissioner in California — and potentially a violation of law,” he said.

Aetna, the nation’s third-largest insurance provider with 23.1 million customers, told CNN it looked forward to “explaining our clinical review process” to the commissioner.

The California probe centers on a deposition by Dr. Jay Ken Iinuma, who served as medical director for Aetna for Southern California from March 2012 to February 2015, according to the insurer. During the deposition, the doctor said he was following Aetna’s training, in which nurses reviewed records and made recommendations to him.

Jones said his expectation would be “that physicians would be reviewing treatment authorization requests,” and that it’s troubling that “during the entire course of time he was employed at Aetna, he never once looked at patients’ medical records himself.”

“It’s hard to imagine that in that entire course in time, there weren’t any cases in which a decision about the denial of coverage ought to have been made by someone trained as a physician, as opposed to some other licensed professional,” Jones told CNN.

Members of the medical community expressed similar shock, saying Iinuma’s deposition leads to questions about Aetna’s practices across the country.

“Oh my God. Are you serious? That is incredible,” said Dr. Anne-Marie Irani when told of the medical director’s testimony. Irani is a professor of pediatrics and internal medicine at the Children’s Hospital of Richmond at VCU and a former member of the American Board of Allergy and Immunology’s board of directors.

“This is potentially a huge, huge story and quite frankly may reshape how insurance functions,” said Dr. Andrew Murphy, who, like Irani, is a renowned fellow of the American Academy of Allergy, Asthma and Immunology. He recently served on the academy’s board of directors.

The deposition by Aetna’s former medical director came as part of a lawsuit filed against Aetna by a college student who suffers from a rare immune disorder. The case is expected to go to trial later this week in California Superior Court.

The Gillen Washington Case

Gillen Washington, 23, is suing Aetna for breach of contract and bad faith, saying he was denied coverage for an infusion of intravenous immunoglobulin (IVIG) when he was 19. His suit alleges Aetna’s “reckless withholding of benefits almost killed him.”

Aetna has rejected the allegations, saying Washington failed to comply with their requests for blood work. Washington, who was diagnosed with common variable immunodeficiency, or CVID, in high school, became a new Aetna patient in January 2014 after being insured by Kaiser.

During his videotaped deposition in October 2016, Iinuma — who signed the pre-authorization denial — said he never read Washington’s medical records and knew next to nothing about his disorder.

Questioned about Washington’s condition, Iinuma said he wasn’t sure what the drug of choice would be for people who suffer from his condition.

Iinuma further says he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient. “Do I know what happens?” the doctor said. “Again, I’m not sure. … I don’t treat it.”

Iinuma said he never looked at a patient’s medical records while at Aetna. He says that was Aetna protocol and that he based his decision off “pertinent information” provided to him by a nurse.

“Did you ever look at medical records?” Scott Glovsky, Washington’s attorney, asked Iinuma in the deposition.

“No, I did not,” the doctor says, shaking his head.

“So as part of your custom and practice in making decisions, you would rely on what the nurse had prepared for you?” Glovsky asks.

“Correct.”

Iinuma said nearly all of his work was conducted online. Once in a while, he said, he might place a phone call to the nurse for more details.

How many times might he call a nurse over the course of a month?

“Zero to one,” he said.

Glovsky told CNN he had “never heard such explosive testimony in two decades of deposing insurance company review doctors.”

Jones, the California insurance commissioner, said he couldn’t comment specifically on Washington’s case, but what drew his interest was the medical director’s admission of not looking at patients’ medical records.

“What I’m responding to is the portion of his deposition transcript in which he said as the medical director, he wasn’t actually reviewing medical records,” Jones told CNN.

He said his investigation will review every individual denial of coverage or pre-authorization during the medical director’s tenure to determine “whether it was appropriate or not for that decision to be made by someone other than a physician.”

If the probe determines that violations occurred, he said, California insurance code sets monetary penalties for each individual violation.

‘A huge admission’

Dr. Arthur Caplan, founding director of the division of medical ethics at New York University Langone Medical Center, described Iinuma’s testimony as “a huge admission of fundamental immorality.”

“People desperate for care expect at least a fair review by the payer. This reeks of indifference to patients,” Caplan said, adding the testimony shows there “needs to be more transparency and accountability” from private, for-profit insurers in making these decisions.

Murphy, the former American Academy of Allergy Asthma and Immunology board member, said he was “shocked” and “flabbergasted” by the medical director’s admission.

“This is something that all of us have long suspected, but to actually have an Aetna medical director admit he hasn’t even looked at medical records, that’s not good,” said Murphy, who runs an allergy and immunology practice west of Philadelphia.

“If he has not looked at medical records or engaged the prescribing physician in a conversation — and decisions were made without that input — then yeah, you’d have to question every single case he reviewed.” 

Murphy said when he and other doctors seek a much-needed treatment for a patient, they expect the medical director of an insurance company to have considered every possible factor when deciding on the best option for care.

“We run into the prior authorization issues when we are renewing therapy, when the patient’s insurance changes or when an insurance company changes requirements,” he said. “Dealing with these denials is very time consuming. A great deal of nursing time is spent filling and refilling out paperwork trying to get the patient treatment.

“If that does not work, then physicians need to get involved and demand medical director involvement, which may or may not occur in a timely fashion — or sometimes not at all,” he said. “It’s very frustrating.”

Click HERE to see the original story 

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.

Self-Insured Health Plan TPA MagnaCare to Return $14.5 Million for ERISA Violations

Third Party Administrator, MagnaCare to return $14.5 million to Health Plan Clients after getting sued in federal court, alleging “MagnaCare breached its fiduciary duties and committed prohibited transactions, including dealing with plan assets in its own interest.

In a case we have written about before and as part of a greater, ongoing slew of self-insured health plans suing their third party administrators, MagnaCare, agreed to return $14.5 million to its health plan clients, as part of a settlement agreement with the US Department of Labor (DOL) – with possible additional payments of $4.5 million based upon business volume through 2019.  This agreement comes on the heels of the DOL lawsuit, filed in 2016, alleging multiple violations of ERISA, including committing prohibited transactions and acting in its own interest with plan assets, among other violations.

According to the DOL and court records:

MagnaCare charged fees that were not disclosed to its ERISA plan clients…The plans paid MagnaCare the full amount, yet MagnaCare remitted the lower charges to the providers and retained the undisclosed markup

This case is just the tip of the national healthcare crisis iceberg. Recent reports have indicated most employers, particularly large employers will continue to offer health insurance as a benefit, in spite of the fact self-insured health plans are spending more on health benefits. Additionally, while self-insuring is common among large employers, an increasing number of smaller employers are self-insuring as well. Based on these facts, and with an increasing number of patients forced into bankruptcy due to unpaid medical bills, employer plans, medical providers and patients need to understand the implication of this case and others like it.

It’s a well-known fact from federal court documents and in healthcare industry news reports, that Billion$ of ERISA plan claims payments from self-insured plans may have been recouped or offset by self-insured plan TPA’s for the TPA’s fully-insured accounts. Additionally, many Billion$ more may have been similarly siphoned off based on “Fake PPO” discounts or  Phantom “Savings” fees.

DOL Case info and copy of “Complaint”: Acosta v. MagnaCare Administrative Services, LLC and MagnaCare LLC Civil Action No.:  1:16-cv-07695-DAB

Copy of “Consent Order”: United States DOL v. Magnacare Administrative Servcies, LLC and Magnacare, LLC-Consent Order

The court documents also contain allegations that MagnaCare actually siphoned off money that was supposed to go towards the payment for medical claims:

At times relevant to this Complaint, MagnaCare acted in own interest when it kept the difference between the Plan Charges and the Provider Rates as additional compensation without disclosing the amounts to the Plans.”

According to court records, MagnaCare LLC, and MagnaCare Administrative Services, LLC (MagnaCare) is a third party administrator of health plans or TPA, and provides administrative and claim adjudication services as well as “Network Access” services which purportedly enables its clients to obtain healthcare from providers at discounted rates.  

This case was undoubtedly spurred on by a previous lawsuit against MagnaCare, by its own self-insured plan client. In that case, the plaintiff alleged:

“MagnaCare represented to Plaintiffs in a written contract between the parties that providers of diagnostic laboratory and ancillary services had “accepted” a “fee schedule” which included a “management fee” for MagnaCare. In fact, the providers had never “accepted’ a fee schedule containing a “management foe” for MagnaCare. Rather, the providers had agreed to a fee schedule, which was a fraction of the amounts collected by MagnaCare from Plaintiffs. MagnaCare – without disclosure to Plaintiffs or the providers – simply misappropriated the difference between what Plaintiffs paid MagnaCare and what MagnaCare negotiated to pay the providers.” 

Court case info: UNITED TEAMSTER FUND, et al v. Magnacare Administrative Services, LLC et al, Case 1:13-CV-06062-WHP-FM, First Amended Complaint (FAC), filed on Oct. 29, 2015, original Complaint, filed on august 27, 2013,  in United States District Court Southern District Of New York.

These lawsuits come on the heels of the Oct. 20, 2014 U.S. Supreme Court decision to deny all appeals on a BCBSM’s $6.1 million fraud judgment for a self-insured ERISA plan by the U.S. Court of Appeals for the Six Circuit, upholding the decision by the District Court for the Eastern District of Michigan. On May 14, 2014, the federal appeals court (Sixth Cir. 2014) upheld the district court’s $6.1 million decision for Hi-Lexa self-insured ERISA plan, against BCBSM for violating ERISA in prohibited transactions and fiduciary fraud, according to court documents.

Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan(SC Case #. 14-168, 6th Cir. Case #: 13-1773, 13-1859).

These cases together with the ERISA case listed below, offer insight into the healthcare industry’s prevalent overpayment offset wars:  

Peterson, D.C. 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

These new ERISA embezzlement cases are part of a growing trend consistent with 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.

For over 7 years, 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 click here.

 

Federal Judge Certifies Class Against ILWU-PMA Welfare Plan in Lawsuit Alleging ERISA Violations

**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.

 

HHS OIG Work Plan 2017

OFFICE OF INSPECTOR GENERAL- U.S. Dept. of Health and Human Services FY 2017-Work-Plan -The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG)
Work Plan for fiscal year (FY) 2017 summarizes new and ongoing reviews and activities that OIG plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond

HHS OIG Work Plan 2017

 

 

 

ERISA-The Gift That Keeps On Giving-Part 2: Court Grants Bankrupt Hospitals ERISA “Special Collection Agent” for All Denied Claims

Just in Time for the Holidays, Federal Court Grants Bankrupt Hospitals ERISA “Special Collection Agent” for All Denied Claims

On Dec 03, 2015, a federal Bankruptcy Court approved an application to employ an ERISA “Special Collection Agent” for Debtors filed by Victory Parent Company, LLC in the wake of the Hospital group’s Chapter 11 bankruptcy filings. The approval underscores the profound impact ERISA will have for the entire hospital industry and medical providers, particularly out-of-network, facing economic hardships, including bankruptcy filings. Compliant ERISA and PPACA appeals and litigation are the only way to protect a hospital or healthcare provider from bankruptcy.

The Employment Retirement Income Securities Act (ERISA), enacted in 1974, is the key governing law for all employer sponsored plan’s healthcare claims in the private industry. ERISA is a federal law that sets minimum standards for most voluntarily established health plans in private industry to provide protection for individuals in these plans. In September of 2010, the Patient Protection & Affordable Care Act, (aka Obamacare), adopted ERISA in its entirety, as the governing federal laws, for internal appeals in all group plans and individual policies or PPACA exchange market plans, for both ERISA and non-ERISA plan claims.

The court approval allows the hospitals to immediately start filing ERISA/PPACA compliant appeals on all denied claims as well as the option to pursue judicial reviews in federal court in order to advocate for all patient ERISA/PPACA appeal rights.

This unprecedented approval will also have a profound impact on available collection remedies and affords the hospitals an alternative to, inevitably, dragging patients into medical bankruptcies, the leading cause of personal bankruptcy in the nation today.

 The U.S. Bankruptcy Court for the Northern District of Texas approved the application to employ a “Special Collection Agent” for debtors filed by Victory Parent Company, LLC in the wake of the hospital group’s Chapter 11 bankruptcy filings on June 12, 2015 (Victory Medical Center Mid-Cities, LP et. al., Chapter 11, Case No. 15-42373-Rfn-11). The Court ordered that ERISA godfather Dr. Jin Zhou be employed as a “Special Collection Agent to provide all necessary collection services to the Debtor as described in the Application pursuant to 11 U.S.C. §§ 327(a) and 328(a).

On June 12, 2015, Victory Parent Company, LLC and four Texas medical centers voluntarily filed under Chapter 11 to preserve value, effect asset sales, according to the Victory Parent Company web site.

According to Robert N. Helms, Jr., Chairman, CEO and Manager of Victory, who managed six for-profit Victory Healthcare medical and surgical centers in Texas before the filing for Chapter 11, Victory built an extremely high quality, state-of-the-art group of community-centric medical centers and hospitals. Unfortunately, due to their out-of-network provider business model, they came under attack by large insurance carriers. Even though they were able to secure in-network agreements with three large insurers, sluggish claim processing and lack of payment from the carriers constrained liquidity significantly.

Unfortunately the situation with Victory is becoming all too common. According to a recent Becker’s Hospital Review industry report published on Sep 15, 2015, 10 hospitals had filed for bankruptcy as of Sept 2015. In fact, Hospital bankruptcy filings are headline news every day, mainly due to alleged denied claims and failed claims reimbursement.

In Re: Victory Medical Center Mid-Cities, LP et. al., “The Debtors in these cases, along with the last four digits of their respective taxpayer ID numbers, are Victory Medical Center Mid-Cities, LP (2023) and Victory Medical Center Mid-Cities GP, LLC (4580), Victory Medical Center Plano, LP (4334), Victory Medical Center Plano GP, LLC (3670), Victory Medical Center Craig Ranch, LP (9340), Victory Medical Center Craig Ranch GP, LLC (2223), Victory Medical Center Landmark, LP (9689), Victory Medical Center Landmark GP, LLC (9597), Victory Parent Company, LLC (3191), Victory Medical Center Southcross, LP (8427), and Victory Medical Center Southcross GP, LLC (3460).” according to the Court document.

 According to the court document published on December 3, 2015, the Court ORDERED THAT:

1. Dr. Jin Zhou d/b/a ERISAclaim.com be employed as Special Collection Agent to provide all necessary collection services to the Debtor as described in the Application pursuant to 11 U.S.C. §§ 327(a) and 328(a);

  1. Dr. Zhou is employed, effective November 3, 2015, as Special Collection Agent to provide all necessary collection services to the Movant in this case as set forth in the Application.
  2. Dr. Zhou shall be entitled to compensation as set forth in the Application and in the Claims Recovery Service Agreement attached hereto as Exhibit A without further application or order of this Court.”

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. Providers should also know 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.

Federal Court Slams Plan With $61,380 Penalty For Failing to Provide Plan Documents, Rules Plan “Belies Logic”

On September 21, 2015 a Federal Court slammed a Plan Sponsor for not providing Plan Documents, ruling the Plan’s action “belies logic”. The Federal Court hit the Plan Sponsor with a $61,380 penalty on top of the previously awarded $12,760 statutory penalty for not providing insurance policy in a timely manner.

Here is a cautionary tale for all Plan Administrators, Plan Sponsors and Fiduciaries. In this case, the member participant of an ERISA Plan requested all relevant documents from the Plan but the plan did not respond in a timely manner. According to court records, there were two Plan Documents, the insurance policy (SPD) and another Plan Document. The Plan provided the insurance policy (SPD), albeit still too  late, and was initially hit with a $12,760 penalty for its failure to provide that document in a timely manner. However, the Plan did not provide the other additional Plan Document until much later in the process.

The Plan argued that the other Plan Document did not need to be furnished because it did not mention the insurance policy and because there were conflicting terms between it and the SPD. The court disagreed saying the Plan’s argument “belies logic” and found the other Plan Document to be a “controlling ERISA document” and as such, the Plan “was under an obligation to furnish a copy of the Plan Document” at the request of the plan participant. Because the Plan failed to do so, it was hit with an additional $61,380 penalty in spite of the fact there were no inconsistencies between the SPD insurance policy and Plan Document.

According to the court:

“Defendant Board of Trustees argues that its failure to provide Plaintiff with the Plan Document is excused because the Plan Document contains no terms that specifically address the life insurance benefit, and because there are no conflicting terms between the SPD and the Plan Document regarding same. This argument represents two sides of the same coin, and is dispelled with the same reasoning. Even if the parties agree that the SPD is a controlling document for Mr. Harris’ life insurance policy, the terms of the SPD specifically state that in the event of any inconsistency between the SPD and the Plan Document, the Plan Document will control. Ergo, armed only with access to the SPD and not the Plan Document, Plaintiff could not have known the unequivocal terms of the life insurance policy because she did not have the opportunity to discover any inconsistencies, or lack thereof, between the SPD and the Plan Document. In this case, it happens that there are no inconsistencies between the SPD and the Plan Document with regards to the life insurance policy. This, however, was not known by Plaintiff until she received the Plan Document on December 10, 2014, despite multiple requests to Defendant Board of Trustees for copies of all controlling or relevant ERISA documents. In sum, to claim simultaneously, as Defendant Board of Trustees does, that only the SPD (and not the Plan Document) is a controlling ERISA document, but at the same time stating that “[i]f there is any difference between the Plan Document and [the SPD], the Plan Document will control,” (id.), belies logic. Accordingly, the Court finds that the Plan Document is a controlling ERISA document.”

The court goes on to say:

“Having found that Defendant Board of Trustees was under an obligation to furnish a copy of the Plan Document at Plaintiff’s request, the Court now turns to the appropriate time frame for statutory penalties under 29 U.S.C. 1132(c).”

According to the court:

“Given Defendant Board of Trustees’ deliberate choice not to respond to Plaintiff’s unambiguous third request for documents, and Defendants failure to respond at all to either the second or third request for documents, (see Doc. 39 at 15–16), the Court finds that assessing the maximum penalty is appropriate in this case. Accordingly, Defendant Board of Trustees will be assessed a penalty of $61,380.00 for its failure to furnish a copy of the Plan Document, calculated at $110.00 per day for the 558 days between May 31, 2013 and December 10, 2014. This penalty is in addition to the $12,760.00 for Defendant Board of Trustees’ failure to provide a copy of the Policy, discussed supra Section IV.B.”

The case is Harris-Frye v. United of Omaha Life Insurance Company, and Board of Trustees, Mid-South Carpenters Regional Council Health and Welfare Fund, Case No. 1:14-cv-72. United States District Court, E.D. Tennessee, Chattanooga Division

It is clear that Plan Administrators and Fiduciaries should respond to any appeals and document requests in accordance with section 104 (b) (2) and 104 (b) (4) of ERISA, and pursuant to the interpretation of “plan document” from DOL Advisory Opinions, 96-14A, which states:

it is the view of the Department of Labor that, for purposes of section 104 (b) (2) and 104 (b) (4), any document or instrument that specifies procedures, formulas, methodologies, or schedules to be applied in determining or calculating a participant’s or beneficiary’s benefit entitlement under an employee benefit plan would constitute an instrument under which the plan is established or operated, regardless of whether such information is contained in a document designated as the “plan document”. Accordingly, studies, schedules or similar documents that contain information and data, such as information and data relating to standard charges or calculating a participant’s or beneficiary’s benefit entitlements under an employee benefit plan would constitute “instrument under which the plan is… operated.

Plan Administrators and fiduciaries should also look to the DOL for guidance on the matter, specifically, DOL FAQs About The Benefit Claims Procedure Regulation:

FAQ B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

What documents will be required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decision making. See 65 FR at 70252. The department does not anticipate new documents being developed solely to comply with this disclosure requirement. Rather, the department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant’s claim. Plans are not required to disclose other claimants’ individual records or information specific to the resolution of other claims in order to comply with this requirement. See § 2560.503-1(m)(8)(iii). See question D-12.

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. Providers should also know 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.

Providers Placed In Precarious Position

CA State officials allege in court papers that Dr. Martello aggressively collected or attempted to collect more from patients than insurance companies paid, a practice known as balance billing.  According to the article, the underlying issue is familiar: many physicians don’t believe they are getting paid enough for their services.  Doctors bill insurance firms and frequently get a fraction of their full fees.

Martello’s attorney, Andrew Selesnick, acknowledged his client was “very persistent” about collecting bills but said she was lawfully pursuing her rights to recoup fees for her services. http://www.latimes.com/news/local/la-me-southpas-doctor-20120818,0,6165119,full.story

At the same time, AETNA has filed multiple lawsuits against various providers for allegedly NOT collecting patient’s out of pocket costs.  “Feb. 3 (Bloomberg) — Aetna Inc. is suing seven California surgery centers for a billing system that it claims “recklessly subverts” health care delivery.

“The lawsuit seeks to stop the centers from waiving the co-insurance payments people are supposed to be charged when they use doctors or facilities that don’t have contracts with their insurers according to the suit.”

The court case info: Aetna Life Insurance Co. v. Bay Area Surgical Management LLC, File 02/02/2012, Case #: 112CV217943, The Superior Court of California, County of Santa Clara.

It seems providers have been put in a very precarious position.   Selesnick argued that the state’s case against his client underscores a larger problem: no one wants to pay for medical services. “Dr. Martello is definitely passionate about being a physician,” he said. “She is equally as passionate about getting paid for the work that she did.”

In Aetna’s complaint, they allege that the providers participated in a “scheme” to “induce (Aetna’s) members to use a defendant facility’s out-of-network services, the defendant waives the patient member’s coinsurance and otherwise relieves the members from obligation to pay their charges. “

Aetna’s complaint further alleges that “By illegally striking at the very financial core of (Aetna’s) managed care network, their scheme also recklessly subverts and imperils (Aetna’s)  well-structured and successfully functioning managed care network made up of subscribers, medical care providers and medical facilities, which has heretofore served as a proven process for delivering excellent, affordable healthcare to citizens of California.”

On one hand you have carriers demanding providers collect all patient out-of-pocket costs or risk getting sued.  On the other hand when providers attempt to collect patient’s out-of-pocket costs that are legally owed to them, they are sued by the state.

Ultimately, patients and providers suffer by this process which undermines all Dr-Patient relationships.  Nancy Hauser, whose teenage daughter was treated by Dr. Martello, in CA, at Huntington Hospital in 2009 after falling at a friend’s house and cutting her head, said she was still dealing with the financial fallout of the physician’s billing practices.  “You go to a doctor with an understanding that the person has your interests at heart,” Hauser said.

It is essential for all providers to understand the rules and regulations that govern these issues.  Implementing compliant policies and procedures can go a long way in prevention.

NEW AETNA LAWSUITS-Out Of Network Providers Under Fire For Non Disclosure Violations!

AVYM offers Webinars to examine the new litigation trend of  lawsuits against out-of-network hospitals, surgical centers and doctors across the nation.  On April 18, 2012, Aetna filed a lawsuit against Humble Surgical Hospital LLC (HSH), in the United States District Court Southern District Of Texas Houston Division.  According to court documents,  “Aetna brings this action for common law fraud, money had and received, unjust enrichment and alternative equitable relief under the Employee Retirement Income Security Act (“ERISA”) for injuries suffered as a result of the excessive and unreasonable fees charged by the Center, a “non-participating” (i.e., non-contracted) surgical hospital”.  The complaint goes on to allege that HSH “through its owner-physicians, is financially abusing Aetna members via referrals to the Center’s out-of-network facilities in which the referring physicians have a financial ownership.”

This lawsuit should be a wake-up call for all Out-Of-Network hospitals, surgery centers and doctors across the nation.  Failure to recognize the impact of these legal actions and to quickly act with compliant solutions, will most likely result in a significant decline in reimbursements for the Out-Of-Network market by the end of 2012.  Avym’s webinars will examine this court case, its profound impacts on all OON providers, and explore compliant solutions and protections under ERISA and PPACA as well as OIG Guidance.  While we are certainly not in a position to judge the merits of these allegations or predict any judicial outcome for the ongoing litigations, we can examine payor lawsuits to find out what issues are avoidable and preventable.

The complaint also alleges that “All of this is accomplished without the Center or its owners informing the patient of the various financial incentives that could affect the type and level of care the patient receives. Moreover, the Center and its physician-owners ignore standard ethical obligations to the patients by further failing to disclose the economic interest and potential gain that the Center obtains from the patient’s out-of-network referral.”

Court case info: AETNA LIFE INSURANCE CO., Plaintiff, VS. HUMBLE SURGICAL HOSPITAL, LLC, Defendant CIVIL ACTION NO. 4:12-cv-1206 (Document 1 Filed in TXSD on 04/18/12)

The following section of the Aetna complaint alleges the following specific violations:

“”ii. Violations of Texas Occupations Code § 102.006

33. Section 102.006 of the Texas Occupations Code concerns failure to disclose in regard to affiliations with other health care entities. A violation of the statute occurs if one accepts remuneration to secure or solicit a patient in a manner

(Case 4:12-cv-01206 Document 1 Filed in TXSD on 04/18/12 Page 10 of 23)

permitted under § 102.001, and at the time of the initial contact and at the time of the referral, disclose to the patient (1) the person’s affiliation, if any, with the person for whom the patient is secured or solicited, and (2) that the person will receive, directly or indirectly, remuneration for securing or soliciting the patient. Tex. Health & Safety Code Ann. § 102.006(a) (West 2012).

34. The Center has violated Tex. Occ. Code Ann. § 102.006 by failing to disclose to the patient that their referring physician is affiliated with and has an ownership stake in the Center.” 

(Case 4:12-cv-01206 Document 1 Filed in TXSD on 04/18/12 Page 11 of 23)

This new lawsuit represents a continuing trend  by most payors in the reimbursement landscape for all out-of-network providers.  AVYM Webinars are designed to identify the litigation epidemic and propose practical strategies and solutions through proactive and compliant practices.

Additionally, as mentioned before, according to the Wall Street Journal on Feb 01, 2012, “Aetna Inc.’s earnings rose 73% as the health insurer continued to benefit from light medical costs amid a sluggish pace of patient visits to hospitals and doctors’ offices.” (http://online.wsj.com/article/SB10001424052970204740904577196551243915014.html)

According to the report from Crain’s New York Business on Feb. 07, 2012, Edward Neugebauer, Aetna’s head of litigation, is quoted as saying, “By spreading the cases out across the country, Aetna is using litigation ‘as a stepping-stone to open policy doors’ at the state level.”

(http://www.crainsnewyork.com/article/20120207/HEALTH_CARE/120209916#)

LATEST NEWS: Aetna Accuses New York Doctors of Overcharging Patients

“Aetna made headlines in California last week when it sued seven California surgery centers for treating patients at out-of-network rates, charging $66,100 for a bunion repair. But in New York, Aetna quietly filed a lawsuit last October against New York doctors whose patients were socked with massive bills—in one case for more than $425,000.

“The two lawsuits, along with earlier ones filed in New Jersey and Texas, form a strategy by Aetna to combat what it sees as abusive out-of-network charges by providers, according to Crain’s Pulse.”

Also as stated in the report from the Crain’s New York Business on Feb. 07, 2012, Aetna complained about the provider’s failure to disclose the referral to out-of-network (OON) and OON UCR charges, and threats to balance bill patients for unpaid claims:

“The doctors did not clearly communicate the charges to Aetna patients, Aetna alleged […]

“Through a billing company, Business Dynamics, Hishmeh threatened to bill patients for the portions of the bills unpaid by Aetna, according to the lawsuit.”

At the same time as the NY and NJ cases, according to a Bloomberg Businessweek article on Feb 6, 2012, Aetna sued seven OON California surgery centers for allegedly not collecting or waiving co-insurance from the patients (http://www.businessweek.com/news/2012-02-06/bunion-repair-at-66-100-spurs-aetna-lawsuit-against-clinics.html):

“Bunion Repair at $66,100 Spurs Aetna Lawsuit Against Clinics”

“Feb. 3 (Bloomberg) — Aetna Inc. is suing seven California surgery centers for a billing system that it claims “recklessly subverts” health care delivery with charges of as much as $66,100 for a bunion repair.

“The lawsuit seeks to stop the centers from waiving the co-insurance payments people are supposed to be charged when they use doctors or facilities that don’t have contracts with their insurers. By not requiring such payments for so-called out-of- network care, the centers illegally lured patients, and then billed Aetna up to 2,500 percent more than what the company pays its contracted providers for procedures, according to the suit.”

The court case info: Aetna Life Insurance Co. v. Bay Area Surgical Management LLC, File 02/02/2012, Case #: 112CV217943, The Superior Court of California, County of Santa Clara.

Aetna TX case info: AETNA HEALTH INC vs. SOFOLA, IFEOLUMIPO O (MD) (Case #: 2011-73949 / Court 152), Harris County, Texas.

This new executive Webinar will discuss the following topics:

  • Compliant policies and practices for proper disclosures in order for patients to make informed decisions in exercising their freedom of choice for utilization of OON providers, solely based on the quality and safety of the care and reputations of the providers.
  • Why and how the waiver of deductible and co-insurance may be questionable practice, subject to the payor’s legal challenges in court and SIU investigations; how to avoid them with compliant policies and practice.
  • OIG: Fraud and abuse prevention brainstorming.  (http://oig.hhs.gov/compliance/provider-compliance-training/index.asp)
  • According to DOL: About 77% of Insured Americans Purchased Out-Of-Network Coverage in Private Industry (BLS, NBS 2010, page 11 of 167): (http://avym.com/health-and-retirement-plan-provisions-in-private-industry-in-the-united-states/)
  • PPACA & ERISA Compliant Appeals and litigation avoidance and/or support.
  • DOL: PPACA & ERISA Claims Regulations Assistance and Complaints Webpage (https://www.askebsa.dol.gov/WebIntake/Home.aspx?submit=Submit+a+Complaint)

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.

Court Dismisses Aetna “$99,750 Ear Wax Fraud” Lawsuit Against Hospital and Doctors

Court Dismisses Aetna’s Landmark “$99,750 Ear Wax Fraud” Lawsuit Against Out Of Network (OON) Hospital And Two Surgeons In Hospital’s Patient Discount Practice. Avym Corporation Offers Webinars To Examine Impact On Patient’s Right To Choose And New Wave Of Litigation By Payors.

On 04-13-2012, a Texas Court dismissed Aetna’s landmark “$99,750 Ear Wax Fraud” case against an out of network (OON) hospital and two surgeons, Aetna’s lawsuit alleged that the hospital charged $99,750 for ear wax removal.  Aetna was seeking temporary injunction to stop the hospital’s patient discount practice of not collecting full deductible and co-insurance from all patients. The Court dismissed the entire Aetna lawsuit after Aetna voluntarily filed a Notice of “Plaintiff’s non-suit without prejudice”. As a result of the dramatic court proceedings for the defendant hospital and two surgeons Avym announces new Webinars to examine this breaking development.

According to the Court document filed on 04-13-2012, Aetna “announced to the Court that they no longer wish to pursue any of the claims asserted by them against Defendants Ifeolumipo O. Sofola, M.D., Navin Subramanian, M.D. and Humble Surgical Hospital, LLC. This non-suit terminates the case upon filing”.

The Court Case info: AETNA HEALTH INC vs. SOFOLA, IFEOLUMIPO O (MD) (Case #: 2011-73949 / Court 152)

Avym Corporation offers webinars to examine the impact of this landmark 2012 healthcare case.  The core issue of these lawsuits is the patient’s rights to choose.  Recently there has been a wave of payor litigation nationwide over provider’s patient discount practice.  According to Govt. statistics more than 77% of insured Americans in the private sector pay for the right to receive care from out-of-network providers and facilities.  This Court decision, along with all other pending Aetna cases across the nation, is very important for the 77% of insured Americans in the private sector with out-of-network coverage.

On Dec 7, 2011, Aetna filed this lawsuit in the District Court, Harris County, Texas. Aetna lawsuit seeks for temporary injunction to stop the hospital’s patient discount practice and PPO surgeon’s OON referrals, alleging breach of contract, conspiracy to overcharge, tortious interference, and common law fraud, including “a bill for $99,750 for the removal of ear wax”.

On Feb. 02, 2012, Aetna filed a “$66,100 bunion surgery” lawsuit in California against seven California surgery centers, seeking to stop the alleged UCR billing without collecting full deductible and co-insurance from all patients. The court case info: Aetna Life Insurance Co. v. Bay Area Surgical Management LLC, File 02/02/2012, Case #: 112CV217943, The Superior Court of California, County of Santa Clara.

According to the Crain’s New York Business on Feb. 07, 2012, Aetna also quietly filed similar lawsuits last year in the State of New Jersey and New York against several out-of-network doctors for allegedly aggressive collections from out of network patients.(http://www.crainsnewyork.com/article/20120207/HEALTH_CARE/120209916)

According to a Bloomberg Businessweek article: “Harvard researchers say 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems—and 78% of those filers had insurance”.
(http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db2009064_666715.htm)

In addition, on March 7, 2012, NY State Governor Andrew M. Cuomo announced that the Department of Financial Services (DFS) is investigating unexpected out-of-network medical costs affecting New Yorkers across the state, many of whom cannot afford to pay out-of-pocket expenses. DFS released a report finding that insurance companies share the burden of responsibility with healthcare providers for unexpected out-of-pocket expenses driving so many patients into bankruptcy. “The report finds an overwhelming need for increased transparency from insurers and medical service providers, and improved consumer protection measures to ensure that New Yorkers stop receiving unexpected bills.” (http://www.dfs.ny.gov/about/press/pr1203071.htm)

According to the Press release on 03/07/2012 from NY State Governor Andrew M. Cuomo:

“Insurers are paying less of the cost of out-of-network care: The investigation found that insurers are moving to a system that greatly increases how much it costs consumers when they are treated out-of-network. To determine what they would pay for out-of-network care, most insurers used to use what is known as the usual and customary rate (UCR), which is supposed to be an average of actual bills for a procedure in that region. But now most are using the Medicare rate, which decreases how much insurers pay by as much as half or more in some cases. Insurers make this change hard for consumers to understand, because some are told they are going from 80% of the usual and customary rate to 140% of Medicare, which sounds like an improvement, but is not.”

Avym Corporation Webinars will cover Aetna’s legal arguments of fraud allegations and compliant patient discount practices.  Avym will also discuss out of network referral practices in relation to patient’s ability to exercise informed choices.

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.