Tag ERISA

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.

Avym Announces 2012 Free Webinars And Plan Assets Recovery Programs To Assist Self-Insured Health Plans Recover Hundreds Of Millions Of Dollars In Plan Assets From Successful TPA’s Overpayment Recovery.  More Than 60% Of TPA Recovered Money Originated From Self-Insured Plans And Should Be Returned To Self-Insured Health Plans Under New DOL Contributory Plans Criminal Project.

Avym announces 2012 free webinars and plan assets recovery programs designed to assist self-insured health plans potentially recover hundreds of millions of dollars in plan assets from successful TPA overpayment recovery efforts.  According to industry estimates, TPA successful overpayment recovery reaches into the billions of dollars nationwide over the past 5 to 7 years.

More than 60% of national TPA recovered money initially originated from self-insured plans and should be returned to those same self-insured health plans.  Every plan fiduciary has statutory duties to safeguard plan assets: to audit all alleged overpayments by TPA’s and to recover every dollar in plan assets when there were known successful overpayment recoveries by the TPA’s.  Avym offers this unique and powerful Plan Assets Recovery Program for the purpose of compliance assistance under new DOL Contributory Plans Criminal Project.

02/23/2011: DOL EBSA News Release:

Morrow, Ohio-based third-party plan administrator pleads guilty to embezzlement of $1 million from retirement plan clients [02/23/2011]

“The third-party administrator to 56 employee benefit plans — most covered by the Employee Retirement Income Security Act — located throughout Ohio and several other states pleaded guilty to one count of embezzlement of $1 million in assets from 12 retirement plans.”  

“This defendant’s theft of employee benefit assets jeopardized the retirement security of workers covered by these plans. This crime is particularly egregious in light of the duty of plan officials and service providers to protect plan assets from abuse,” said Phyllis C. Borzi, assistant secretary of the Labor Department’s Employee Benefits Security Administration.”  http://www.dol.gov/opa/media/press/ebsa/EBSA20110228.htm

During the last 7 years, there have been industry wide reports of successful healthcare anti-fraud and overpayment recovery in the billions of dollars.  On November 16, 2010, U.S. Labor Department announced nationwide enforcement actions to protect millions of dollars in worker retirement and health benefits. http://www.dol.gov/ebsa/newsroom/2010/10-1614-NAT.html

DOL EBSA: Contributory Plans Criminal Project Fact Sheet States:

“Millions of American workers share in the costs of employee benefits by contributing to employer sponsored retirement and health benefit plans. In 2010, the Department of Labor’s Employee Benefits Security Administration (EBSA) initiated the Contributory Plans Criminal Project (CPCP) to combat criminal abuse of contributory benefit plans.” http://avym.com/dol-ebsa-contributory-plans-criminal-project-fact-sheet/

It is simple and clear -when a contributory benefit plan initially overpays millions of dollars due to TPA’s errors, and several years later, the same TPA recovers said overpayment in its anti-fraud operation, such recovered money should be returned to the self-insured health plans, and must not be converted or embezzled into the TPA assets.

Avym Webinars are designed to assist self-insured health plans comply with ERISA fiduciary laws by safeguarding contributory plan assets, and to assist with DOL EBSA Contributory Plans Criminal Project:

“EBSA works closely with other federal, state, and local agencies to enforce laws safeguarding contributory plan assets. Criminal prosecution of individuals who abuse their authority or control over contributory plans can result in severe criminal penalties, including imprisonment. Those convicted of embezzling or misappropriating moneys intended to fund pension plans or pay health benefits typically are barred from providing services or acting in any capacity for a period of 13 years.” http://avym.com/dol-ebsa-contributory-plans-criminal-project-fact-sheet/

Avym Webinars are free to all self-insured ERISA plans.  Webinars are designed to review industry facts and applicable federal laws, and explain how and why a self-insured ERISA health plan should be refunded by its TPAs for recouped overpayment money.  These free webinars are scheduled for 30 minutes each session.  To schedule a free webinar, or for more information contact us at: info@avym.com

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 Rules Against Provider for Faulty Assignment, Even With PPO Contract

Federal Court Decision on March 02, 2012 Rules Against PPO Hospital for Faulty ERISA Assignment: BCBS PPO Contract Is Not an ERISA Assignment, However Court Denies Plan’s Anti-Assignment Argument.

This case illustrates three issues of significant importance to all ASC providers.   First, the courts have again addressed the matter of standing and the importance of a complete, ERISA/PPACA compliant assignment for all ASC providers seeking ERISA/PPACA appeals and litigation.  Second, PPO contracted ASC providers are not granted automatic standing for appeal and litigation purposes.  Third, the court rejected the Plan’s anti assignment argument; anti assignment clauses are not enforceable with a complete valid ERISA assignment.

Every ASC in the country has had a claim denied.  If an ASC attempts to appeal any kind of denial such as UCR, medical necessity, policy exclusion or even overpayment request, that ASC will need a complete assignment.  If a claim denial is not resolved, and a court action is necessary, ASC’s will absolutely need a complete assignment.  ASC’s cannot sue in court, or even appeal denied claims, unless they have a complete assignment.  Unfortunately, the assignment most ASC’s, and physicians use is NOT a complete assignment.  This court case highlights the necessity for ASC owners, managers and consulting companies to review current patient assignments, as well as obtain complete assignments regardless of whether the ASC is in or out of network.

The court case info: Medical University Hospital v. Oceana Resorts, United States District Court, D. South Carolina, Charleston Division, March 2, 2012.

According to the Court document, the plaintiff  PPO hospital “Medical University Hospital Authority /Medical Center (MUSC) argued that as a PPO provider they are not required to obtain an ERISA assignment or otherwise has automatically obtained an ERISA Assignment from its PPO contracting or participation:

“First, MUSC argues that the Plan implicitly assigned benefits to all network providers based on the payment structure laid out in the Plan, and therefore, MUSC did not even need the Consent Form to obtain derivative standing. Under the terms of the Plan, a participant need only pay the deductible to a network provider from whom he or she obtains medical services. The network provider is then required to file its claim for those services with the TPA. The Plan states that the network provider will receive the scheduled amount as payment in full for the medical services. The terms of the Plan indicate that generally some party other than the participant will reimburse the Plan for the claims. Defendants agree that MUSC is a network or preferred provider.”

The Court rejected plaintiff’s PPO ERISA Assignment argument and stated that ERISA assignment has to come from a patient, not Plan or PPO network:

“MUSC did not claim that it had standing as a third-party beneficiary of the Plan; nor could it have successfully pursued this argument. The only Circuit to squarely address this issue held that “ERISA does not countenance third-party beneficiary claims,” and found, therefore, that a hospital could not have independent standing without an enforceable assignment from the participant. Dallas Cnty. Hosp. Dist. v. Assoc.’s Health & Welfare Plan, 293 F.3d 282, 289 (5th Cir. 2002). Thus, without a valid assignment from a beneficiary or a participant, MUSC could not have obtained derivative or direct standing.”

The Court also ruled for the self-insured ERISA plan because the plaintiff’s alleged ERISA assignment only covers an insurance policy not self-insured ERISA plan:

“Additionally, the Consent Form, which was prepared by MUSC, does not cover assignments to self-funded employee benefits plans. The Consent Form assigns benefits due under “any insurance policy.” The assignment provides examples of types of coverage which would be assigned, all of which are types of insurance. Section 1144(b)(2)(B) of ERISA forbids states from deeming an employee benefits plan “to be an insurance company or other insurer . . . or to be engaged in the business of insurance.” See also Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 372 (2002) (“ERISA’s `deemer’ clause provides an exception to its saving clause that prohibits States from regulating self-funded plans as insurers.”). The Fourth Circuit, therefore, has held that “[t]hird-party administrator[s], [are] not . . . insured[s].” Sheppard & Enoch Pratt Hosp., 32 F.3d at 123 n.1; but see Wheeler, 62 F.3d at 638 (discussing self-funded “ERISA health insurance plan” and applying principles of insurance law).”

Interestingly, for some unknown or perhaps strategic reason, the Complaint did not include the language of the alleged assignment or attach the Consent Form.  The Complaint also did not include information regarding any anti-assignment provision in the Plan document.  However, the Court rejected ERISA plan’s anti-assignment argument:

“Because it is possible for a medical provider to acquire derivative standing through an assignment of benefits by a plan participant, MUSC’s Complaint states a plausible claim for relief, and therefore, defendants’ motion to dismiss is denied”.

Due to the lack of or faulty ERISA Assignment, the Court finally ruled for the self-insured ERISA plan:

“For the foregoing reasons, the court DENIES defendants’ motion to dismiss, but GRANTS their motion for summary judgment.”

This court decision provides a clear roadmap for all PPO and Non-PPO ASC providers on the requirements of valid, complete assignments.  Longstanding traditional limited assignments are insufficient for ERISA appeals and litigations.  ASC’s must follow this roadmap through innovative and practical solutions with proactive ERISA compliant assignments and appeals in accordance with applicable federal ERISA and PPACA laws.

Many ASC’s are under the misconception that: (1) joining a PPO or HMO network contract automatically grants providers ERISA rights and federal regulations law governing most commercial health claims; (2) Federal ERISA regulations don’t regulate or are not relevant to PPO or HMO network providers.  Nothing could be further from the truth.  This court decision is a wakeup call for all contracted and non-contracted ASC providers.

AVYM advocates for education and understanding and provides in-depth analysis of this new in-network litigation as well as other issues affecting health care professionals with ongoing webinars.

To find out more about PPACA Claims and Appeals Compliance Services from AVYM please contact us at info@avym.com

AVYM offers new Webinars to examine recently reported high profile Aetna lawsuits against out-of-network hospitals, surgical centers and doctors across the nation.  Lawsuits were filed in CA and TX, for allegedly not collecting deductible and co-insurance.  Simultaneously, additional lawsuits were filed in NJ and NY for over collecting (balance billing).

AVYM Webinars are designed to identify the litigation epidemic and propose practical strategies and solutions to avoid possible litigation through proactive and compliant practices.

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 must examine the Aetna lawsuits to find out what issues are avoidable and preventable.  These Aetna litigations represent a structural change by most payors in the reimbursement landscape for all out-of-network providers

Additionally, 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.

“Providers are caught in a catch-22 situation; if they do not collect patient’s co-pays and deductibles, they may be subject to lawsuits as in the CA case.  On the other hand, if they collect patient’s co-pays and deductibles, they may be subject to lawsuits as in the NY and NJ cases.  It is a situation where providers are damned if they do and damned if they don’t.  Aetna may or may not prevail in court for these allegations, but we must look to why and how providers may or may not get sued” said Vincent Flores, President of YF Corporation, and a national expert on PPACA and ERISA appeals and compliance.

This new executive Webinar will discuss the following topics:

1. 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.
2. Compliant policies and practices for proper disclosures, for the patients to make informed decisions in exercising freedom of choice for utilization of OON providers, solely based on the quality and safety of the care and reputations of the providers.
3. OIG: Fraud and abuse prevention brainstorming.  (http://oig.hhs.gov/compliance/provider-compliance-training/index.asp)
4. 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/)
5. PPACA & ERISA Compliant Appeals and litigation avoidance and/or support.
6. 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.