Tag Document request

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.

An Oklahoma jury slammed Aetna with a $25.5 Million verdict for improperly denying medical claims, awarding the family of the deceased patient $15.5 million in emotional distress and another $10 million in punitive damages. The verdict comes just months after an Aetna medical director admitted under oath, that he never actually looked at a patient’s medical records while at Aetna because it was Aetna’s protocol, and that he based his decision off “pertinent information” provided to him by a nurse.

The case details are very common and happen everyday across the nation: Patient pays for health insurance, patient gets sick and seeks treatment, insurer denies claim under the guise that services are deemed experimental or investigational. According to the family’s attorney, Doug Terry, “[this] case represents/exposes so much of what is wrong with health insurance,” Terry said.

“This case gave the jury a look behind the curtain so they could see what goes on at a health insurance company when they deny claims.  The evidence showed Aetna’s denial of her claim involved overworked, under-qualified doctors working in the interest of their employer’s bottom line who are compensated in part based on the profitability of the company.”

Court documents showed that evidence was presented to the jury, showing that Aetna’s doctors spent just minutes reviewing her case, despite the critical nature of her condition. Ultimately, Aetna’s  medical doctors denied the coverage, saying it was experimental and investigational, though clinical expert, Dr Andrew L. Chang, argued the treatment was not new, but a well established cancer treatment for decades, and had not only been approved by the Food and Drug Administration, it but is also covered by Medicare.

Interestingly, Aetna considers the treatment appropriate for pediatric patients; and Medicare pays for the treatment in 65 year olds, which raises the question: “what is it about 22-year-olds to 64-year-olds that makes proton therapy experimental? There is no good answer for that; insurance companies call it that because they decided to deem it as such.” according to Dr. Chang.

According to multiple outlets, several jurors mentioned that they believed Aetna had “Rubber Stamped” the claim denials, based on the very limited time Aetna medical doctors spent actually reviewing the claim. Ultimately, the jury found that Aetna had “recklessly disregarded its duty to deal fairly and act in good faith with the Cunninghams.“

Astonishingly, Aetna’s  attorney John Shely said in closing arguments that Aetna was proud of the three medical directors who denied coverage, even turning to thank them as they sat in the front row of the courtroom, according to jurors and other witnesses in court.

According to a CNN article, this decision represents the largest verdict in an individual claim denial insurance case in Oklahoma history, and could have major ramifications across the country for a form of cancer treatment called proton beam therapy.

The Case info: Ron Cunningham et al. v. Aetna Life Insurance Company, et al; Case number CJ-2015-2826 in the District Court of Oklahoma County, State of OK

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.

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

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.