Boomerang Effect Part II-Federal Court “Bars” Cigna From Recouping Self-Insured Plan Assets

Boomerang comes back to hit Cigna

Another Federal Court Rules Against Cigna In Alleged Fee Forgiving/Overpayment Recoupment Dispute With Medical Provider- Court “Bars” Cigna From Relying On “Legally Incorrect” Interpretation of ERISA Plans

On March 10, 2017 in the US District Court of Connecticut, Judge Alfred V. Covello ruled in favor of surgical center defendants and against Cigna, barring Cigna from recouping self-insured plan assets based on alleged “overpayments” which were predicated on Cigna’s “legally incorrect” interpretation of ERISA plans “exclusionary language”.

This decision offers clear guidance on critical issues such as cross-plan offsetting, Cigna’s fee forgiveness protocol, SIU practices and ERISA disclosure requirements, confirming the profound shift in Out-of-Network benefits and claim processing for all health care providers and health plans in the nation.

The decision also further unwinds the payor initiated “out-of-network fraud” enigma as we have written about before, and is one of a series of critical court decisions which address the typical scenario for out-of-network providers: payors refusal to pay claims which leads to “catch-all” out-of-network lawsuits seeking total overpayment refunds of claims previously paid to providers, all based on broad and vague allegations of fraud.

The case revolves around Cigna’s fee forgiving protocol, whereby Cigna denies medical claims if its members don’t pay their entire out of pocket cost up front. Based on this premise, Cigna is also seeking recovery of approximately $17 million in alleged “overpayments” made to providers that did not collect the full patient out of pocket liability up front.

Court case info: Connecticut General Life Insurance Co. et al. v. True View Surgery Center One, LP et al. Case No.:3:14-cv-01859-AVC; US District Court Connecticut

In what may have been the impetus for a litigation tsunami, where over 100 Cigna administered health plans were sued for various ERISA violations including embezzlement, issuing “secret checks” and self-dealing, Cigna filed suit on 12/11/2014 against True View Surgery Center One and affiliated health care providers seeking declaratory and injunctive relief under ERISA and essentially asking the court to declare that “no coverage is due” where medical providers “do not enforce the plans’ cost-share requirements”. Cigna also asked the court to order defendant medical providers to “submit to Cigna only claims containing charges that Defendants actually charge the plan member as payment in full”. In other words, no medical coverage is available if the member does not pay their entire out of pocket liabilities up front.

Cigna was also seeking the return of any benefit payments, as “overpayments” made to the medical provider where the member did not pay their entire out of pocket liability up front, specifically requesting the court to impose a “constructive trust on monies currently held by Defendants as a result of the overpayments made by Cigna…pursuant to an equitable lien”.

Out of network provider True View Surgery Center One, argued that the issues were already resolved in a previous case litigated in Texas, and that Cigna was attempting to take multiple bites out of the same apple in order to wrongfully deny legitimate medical claims.

The court focused on two main issues: 1) whether Cigna is barred by the doctrine of collateral estoppel from pursuing their claims on behalf of ERISA plans; and 2) whether Cigna has adequately alleged traceability in order to recover alleged “overpayments”

Ultimately, the court agreed with defendant True View Surgery Center One and ruled “Cigna is barred by the doctrine of judicial estoppel” in its attempt to have the courts validate its fee forgiving protocols, and in its attempts to recover alleged “overpayments”

In his decision, Judge Covello cited the Humble case (Connecticut General Life Insurance Co. et al. v. Humble Surgical Hospital, LLC, Case number 4:13-cv-03291) where Cigna was slammed with a $17 million penalty and opined that the district court in Texas had already “addressed the issue” regarding Cigna’s fee forgiving protocols.

In citing the Humble case, the judge said “In Humble, the court held that Cigna’s interpretation of this “exclusionary” language was “legally incorrect,” and that “ERISA does not permit the interpretation embraced by Cigna.”

The judge went on to say that the Texas court found “because ‘[t]he average plan participant would not understand from the exclusionary language…that his/her coverage is expressly conditioned on whether Humble collects upfront, the entirety of his/her deductible, co-pay and co-insurance before Cigna pays,’ Cigna’s “exclusionary” language interpretation does not pass muster under the “average plan participant” test,” which ERISA requires.”.

The judge ultimately holds: “Cigna is relying on the interpretation of its ERISA plans that the United States District Court for the Southern District of Texas held to be ‘legally incorrect’ in order to effectively deny providers’ benefit claims. Therefore, the doctrine of collateral estoppel bars Cigna from relitigating those [issues].”

As part of Judge Covello’s ruling on Cigna’s lack of traceability, in dismissing Cigna’s claim for “overpayments”, we must again look to the Humble case for clarification. According to the Humble court:

Cigna is not entitled to equitable restitution of any alleged overpayments based on the “tracing” method, as it cannot identify any specific res separate and apart from Humble’s general assets. See Health Special Risk, 756 F.3d at 366 (reasoning that “Sereboff did not move away from any tracing requirement; it distinguished between equitable liens by agreement—which do not require tracing—and equitable liens by restitution—which do.”). As the Court explained in Knudson, the basis for petitioners’ claim is “that petitioners are contractually entitled to some funds for benefits that they conferred. The kind of restitution that petitioners seek, therefore, is not equitable…but legal—the imposition of personal liability for the benefits that they conferred upon respondents.”Knudson, 534 U.S. at 214.”

All Out-of-Network providers and self-insured health plans should understand the implications of the court’s rulings in order to protect members and beneficiaries from inappropriate medical debt and bankruptcy and to safeguard and protect self-insured health plan assets from possible conversion, abstraction or “hidden fees”.  Education and understanding of these concepts will bring peace, harmony and compliance to the healthcare industry, especially when health plans are determined to contain healthcare costs and healthcare providers are dedicated to providing all patients with high quality, affordable healthcare when exercising their freedom of choice and right to seek out-of-network care.

For over 7 years, 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.

United HealthCare Administered ERISA Plan Sued for Embezzlement in Medical Claims Overpayment Offset Dispute

On May 10, 2016, in the southern district of Texas Federal Court, United HealthCare administered self-insured ERISA plan, GAP Inc. and its Plan Administrators, Cynthia Radovich and Lesley Dale, were sued for alleged ERISA plan assets “self-dealing and embezzlement”, deceptively concealed through an “illegitimate recoupment scheme that financially rewards United for wrongfully recouping valid benefits”.

As we have written about before and as part of a growing trend, another self-insured health plan is being sued for alleged embezzlement and self-dealing. United HealthCare administered self-insured ERISA plan, GAP Inc. and plan administrators, Cynthia Radovich and Lesley Dale, were sued by out-of-network (OON) hospital, Redoak Hospital, LLC, for alleged ERISA plan assets “Self-dealing and embezzlement”, based on its co fiduciary, United HealthCare’s (UHC) alleged cross plan overpayment offset practices, according to court documents.

This extraordinary and multifaceted ERISA lawsuit will impact all ERISA self-insured plans, employer sponsored plan employees, and healthcare providers, resulting in uncertainties for every healthcare claim. Overpayment refund demands and cross-plan offset practices are the nation’s most insidious claim denials and may ultimately determine the fate of the entire U.S. ERISA healthcare system. 

In the healthcare provider arena the No. 1 health care claim denial in the country today is the overpayment recoupment and claims-offset.  Correspondingly, for self-insured health plans, the No. 1 hidden cost is overpayment recoupment and plan assets embezzlement.

The Court Case Info: Redoak Hospital, LLC v. Gap Inc., Gap Inc. Health and Life Insurance Plan, Cynthia Radovich, and Lesley Dale,  in the United States District Court for the Southern District of Texas, Houston Division, Case 4:16-cv-01303, Filed on 05/10/16.

According to court documents, Redoak Hospital Plaintiff filed a DOL EBSA Complaint on the alleged overpayment offset by the Defendants Plan, Gap, Inc, and the plan’s co-fiduciary, UHC, prior to filling this ERISA lawsuit, alleging:

 “This dispute arises out of Defendants’ ongoing and systematic ERISA violations consisting of an elaborate scheme to abstract, withhold, embezzle and convert self-insured Plan Assets that were approved and allegedly paid to Plaintiff for Plaintiff’s claim, to purportedly, but impermissibly, satisfy a falsely alleged ―overpayment‖ for another stranger claim, especially when the stranger is a plan beneficiary of a fully-insured plan that is insured by the Plan’s co-fiduciary, United Healthcare (hereinafter, ―United‖). Defendants knew or should have known that the Plan’s overpayment recovery provisions cannot be triggered until there is an allegation of overpayment by the Plan to the Plan Beneficiary subject to this action, and that converting the Plan Assets by a fiduciary or co-fiduciary of the Plan, in this case United, to the use of another and his own use, to ultimately pay to United’s own account is absolutely prohibited under ERISA statutes. Regardless, Defendants and United recklessly conspired, orchestrated and authorized to this kind of self-dealing and embezzlement even while being under active investigation by the Department of Labor and after repeated detailed alerts and notices from Plaintiff regarding the aforementioned.” according to the Court Documents.

In the Compliant, the Plaintiff makes the following:

 “COUNTS AGAINST DEFENDANTS:

The Plaintiff, as a statutory defined Claimant with a valid and unchallenged Assignment of Benefits, is entitled to ERISA rights ―to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review‖ after Plaintiff has legally and administratively exhausted any and all appeal remedies.14 Therefore the Plaintiff is entitled to pursue Benefit claims: (i) to recover benefits due for already approved claims but abstracted and converted by the Defendants’ co-fiduciary, United; (ii) breach of fiduciary duty claims under 29 U.S.C. § 1132(a)(2) in violation of 18 U.S.C. § 664, 29 U.S.C. § §1104, §1105, §1106(b)(1)(d); injunctive relief to enjoin the Defendants from engaging in prohibited transaction 29 U.S.C. § 1132(a)(3); and (iii) injunctive relief to permanently remove the Defendants Cynthia Radovich and Lesley Dale from serving as fiduciaries to the Plan permanently under 29 U.S.C. § 1132(a)(3).” according to the Court Documents.

Avym Corp. announces a timely new ERISA Compliance Forum on May 17, 2016. At this new ERISA Compliance Forum, through Pittsburgh Business Group on Health (PBGH) Legislative Updates Forum, we will brainstorm, assess and demystify the potential impact of this unprecedented ERISA lawsuit for all interested parties.  PBGH is “The only employer-led, non-profit coalition of large, mid-size, and small organization representing various business segments including private and public employers, government and academia.”

According to industry estimates, the total dollar amount at issue nationwide is tremendous. Successful industry overpayment recoveries have reached into the billions of dollars nationwide over the past 5 to 7 years and involve many large carriers.  Thus recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for some insurers. While there is a need for anti-fraud initiatives in healthcare today, it is critical that every health plan comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties. Insurers and Health Plans must comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar.

Over the past 6 years, Avym has closely followed decisions from the Supreme Court and federal appeals courts on ERISA prohibited self-dealing against ERISA plan TPA’s for managed care savings.

This latest lawsuit against a self-insured plan and plan administrators, for alleged plan assets embezzlement by the ERISA plan’s third party claim administrator (TPA), comes less than 6 months after a Cigna administered self-insured plan was sued in federal court for similar violations.

The Court Case info: True View Surgery Center One L.P., v.Chicago Bridge And Iron Medical Plan, Chicago Bridge And Iron Company, And Dennis Fox, Case #: 3:15-CV-00310, filed on Oct. 29, 2015, in the United States District Court For The Southern District of Texas.

In the Oct 29, 2015 lawsuit filed by OON provider True View Surgery Center, against the Cigna administered ERISA plan, the Plaintiff alleged in part:

“Specifically, in spite of the glaring conflict of interest and inherent breach of fiduciary duties, Defendants agreed to an unlawful compensation structure that financially rewards Cigna for wrongfully denying and underpaying benefits claims. Under this backdrop, together Defendants and Cigna concocted an intricate scheme to transfer and embezzle plan funds. Transfers are first concealed by processing out-of-network claims under a fabricated Preferred Provider Organization (PPO) “contractual obligation,” even though Defendants and Cigna are fully aware that no such contract exists. Then, Defendants and Cigna knowingly implemented a system to willfully and wrongfully refuse payments to the out-of-network provider under a sham “fee-forgiveness” protocol. As a result of the wrongful claims denials, the transferred plan funds are ultimately misappropriated by Cigna, who then fraudulently pays itself with the plan funds, falsely declaring the embezzled funds as compensation generated through managed care and out-of-network cost containment “savings,” when in truth the claims were never paid and the plan beneficiaries were left exposed to personal liability for their unpaid medical bills.”

On Oct 21, 2015, in a separate but similar lawsuit filed by an ERISA plan against a separate ERISA plan TPA, the Plaintiff alleged in part:

“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-Lex, a 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 pending ERISA cases 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,

Riverview Health Institute v. UnitedHealth Group Inc. et al, U.S. District Court, U.S. District of Minnesota (DMN), CIVIL DOCKET FOR CASE #: 0:15-cv-03064-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 6 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.

US Supreme Court ERISA Decision Protects Hospitals from “Overpayment Bankruptcies”

On January 20, 2016, Supreme Court ruled that an ERISA plan cannot sue to recover medical expenses paid on the participant’s behalf after the settlement funds have dissipated. This high court decision also protects hospitals from all health plan’s overpayment recoupment.

On January 20, 2016, Supreme Court ruled that an ERISA plan cannot sue to recover medical expenses paid on the participant’s behalf after the settlement funds have dissipated, because “…a plaintiff ordinarily cannot enforce any type of equitable lien if the defendant once possessed a separate, identifiable fund to which the lien attached, but then dissipated it all…. This rule applied to equitable liens by agreement as well as other types of equitable liens.” Op. at 9

Supreme Court case info: Robert Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, case #: 14-723, January 20, 2016

Link to PDF Copy: Montanile v. Board of Trustees of the National Elevator Industry Health Plan.

On January 23, 2016, Avym Corporation announced 2016 hospital ERISA appeal & litigation department support services to demystify why this high court decision also protects hospitals and doctors from any health plan’s overpayment recoupment and to recover all overpayment recoupment unlawfully withheld or embezzled by all payers under any incorrect ERISA equitable lien arguments, because “this rule applied to equitable liens by agreement as well as other types of equitable liens.” Op. at 9

Nationwide, over the past 10 years, overpayment offsets and recoupments have directly resulted in billions of dollars of revenue losses, and even bankruptcies in many cases, for medical providers of all types. These recoupments by payers are done using ERISA equitable lien arguments, both inside and outside the courtrooms. Consequently, this new Supreme Court decision is critical for every healthcare provider’s financial survival.

At minimum, any overpayment offsets or recoupment across separate plans and/or patients are not permissible under ERISA equitable lien law in accordance with the Supreme Court decision on January 20, 2016, because the alleged overpayment equitable lien is attached to another person’s separate fund or property, where no ERISA equitable lien existed, or otherwise is clearly not permitted.

“For all pending overpayment court cases in absence of any fraud claims, this Supreme Court decision could be a rainmaker for all healthcare providers, both in-network and out-of-network”, predicted Dr. Jin Zhou, president of ERISAclaim.com, a national expert on ERISA appeals and compliance, and an ERISA “Special Collection Agent”, as recently ordered by a Federal Bankruptcy Court for a bankrupt hospital system in Texas.

Avym Corporation’s 2016 hospital ERISA appeal & litigation department support services will brainstorm on this Supreme Court order and assist hospital executives and legal departments in assessing and immediately complying with the Supreme Court decision, in advocating for ERISA rights of the plan participants and beneficiaries in the hospital’s financial survival ordeals, or otherwise preventing hospitals and doctors from being bankrupt as a result of the totally out-of-control revenue losses from the endless and relentless overpayment recoupment or offsets under ERISA in absence of any fraud claims.

These new ERISA compliance services include, but are not limited to, executive brainstorming and education, ERISA & PPACA appeal practice, ERISA litigation strategy & support, overpayment prevention through corporate compliance in fraud & abuse prevention.

In a personal injury subrogation overpayment lawsuit, after the District Court and 11th Circuit Court ruled for the health plan, on January 2016, the Supreme Court ruled for the plan participant. In an 8-1 ruling penned by Justice Clarence Thomas, the majority said that the National Elevator Industry Health Benefit Plan couldn’t sue plan beneficiary Robert Montanile under ERISA §502(a)(3) for overpayment reimbursement of about $122,000 from a $500,000 auto accident settlement because the settlement fund had already been dissipated and  therefore, the plan fiduciary may not sue to get at the participant’s additional assets.

According to the Court Documents, the Supreme Court ruled:

  • “Plan fiduciaries are limited by §502(a)(3) to filing suits “to obtain … equitable relief.”
  • “[A]s here, an equitable lien by agreement, only against specifically identified funds that remained in the defendant’s possession or against traceable items that the defendant purchased with the funds.”
  • “If a defendant dissipated the entire fund on nontraceable items, the lien was eliminated and the plaintiff could not attach the defendant’s general assets instead.”
  • “The Board’s arguments in favor of the enforcement of an equitable lien against Montanile’s general assets are unsuccessful. Sereboff does not contain an exception to the general asset-tracing requirement for equitable liens by agreement.”
  • “In sum, at equity, a plaintiff ordinarily could not enforce any type of equitable lien if the defendant once possessed a separate, identifiable fund to which the lien attached, but then dissipated it all. The plaintiff could not attach the defendant’s general assets instead because those assets were not part of the specific thing to which the lien attached.”
  • “This rule applied to equitable liens by agreement as well as other types of equitable liens.”

 

(This article was originally published by Dr. Jin Zhou)

CA Orders Anthem To Stop Trying To Collect On Old Overpayments

On July 16, 2012, California Department of Managed Health Care ordered Anthem Blue Cross to stop trying to collect millions in reimbursement from providers for medical claims the health plan thinks were overpaid.

Avym announces free executive webinars designed to examine the California Department of Managed Health Care’s order and discuss the profound impact of the entire overpayment recoupment market, estimated to be in the billions of dollars.

State regulators ordered Anthem Blue Cross on July, 16 2012 to stop trying to collect millions in reimbursement from providers for medical claims the health plan alleges were overpaid.

California State law allows health plans to seek reimbursement for overpaid medical claims within a year of the payment date. In order for a plan to collect on claims more than a year old, it must demonstrate fraud or misrepresentation by the provider.

Earlier this year, the California Department of Managed Health Care (DMHC) investigated collection attempts by Anthem Blue Cross between 2008 and 2011 and found the plan tried to collect overpayments from at least 535 providers for claims that were more than a year old. Anthem did not provide evidence of fraud or misrepresentation, the agency said in a news release Monday.

The plan alleged providers had improperly coded the claims using upcoding, unbundling or miscoding procedures, the cease-and-desist order shows.

Anthem, which is based in Thousand Oaks, CA, tried to collect payments from another 13 providers who allegedly had billed for services they had not rendered.

“Health care providers should not face unexpected demands for reimbursement of medical claims they believe were appropriately paid years ago,” agency director Brent Barnhart said in the release. “Anthem’s recoupment practices violate California law and are unfair to providers who are acting in good faith.”

Anthem spokesman Darrel Ng stressed in a prepared statement that the issue does not involve patient care or safety: “The issue is about Anthem Blue Cross’s efforts to keep health care affordable,” he said. “Anthem Blue Cross believes medical providers should be compensated for services provided, but should not receive payment twice for the same procedure.”

According to Mr. Ng, Anthem sought reimbursement for overpayments due to double billing which is consistent with guidelines from the American Medical Association.  “We will closely examine today’s action by DMHC and are considering our options,” he said.

Many providers are still trying to figure out what to do in light of the DMHC’s order.  The California Medical Association (CMA), which made the initial request to the DMHC to investigate, issued a press release urging the DMHC to take further action, including imposing heavy fines to deter future abuses. CMA is also asking DMHC to require Anthem refund to physicians any overpayments collected in violation of the law.

No decision has been made about whether the collected alleged overpayments will have repaid, but DHMC offered this advice: If a provider receives (or has received) a notice from Anthem (or any plan) requesting recoupment of alleged overpayments from claims older than one year, they should first file an appeal with the plan. If the appeal is unsuccessful, the plan is non-responsive or they are unsatisfied with the response, the provider should file a complaint with the DMHC Provider Complaint unit at: http://www.dmhc.ca.gov/providers/clm/clm_comp.aspx

This comes on the heels of Anthem’s recent troubles with the CA DMHC.  In January of 2012, Anthem was ordered pay doctors and hospitals money owed for services going back to 2007.  The action is a result of Anthem’s refusal to remediate providers following a financial claims audit that identified errors in payment of medical claims

This is in addition to a lawsuit, intended to be a class action, filed by consumer advocate group Consumer Watchdog.  the complaint challenges alleged “bait and switch” tactics affecting more than 100,000 individual plan members hit by deductible increases and other changes in May. It also targets other changes that allow Blue Cross to alter terms of health plan contracts several times in a year, with 60 days’ notice.

What does this mean to overpayment request by payors?  AVYM offers free webinars that will examine the importance of appealing overpayment requests, including an analysis of the GAO Report findings “When denied reimbursement by an insurance company, one of the biggest mistakes made is not appealing the decision. When denied reimbursement for services you have the right to appeal and the Insurance Company/Plan Administrator is required to explain why they denied the claim. Doing so often pays off, with an estimated 59 percent of appeals being decided in favor of the claimant.”

Avym webinars will:

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

To find out more about ERISA/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.

UHC Overpayment ERISA Class Action: Federal Court Rules Against UHC & Permits Providers’ Lawsuit to Proceed

On March 30, 2012, Federal Court Denied UnitedHealth’s (UHC) Motion, In Its Entirety As To All Claims, To Dismiss Providers’ ERISA Class Action, Alleging UHC’s Wrongful Overpayment Recoupment In Violation Of ERISA. Avym Offers Webinars To Examine The Legal Impact Of This Decision for All Payers and Providers.

On March 30, 2012, United States District Court of New Jersey denied UnitedHealth’s (UHC) motion, in its entirety as to all claims, to dismiss the providers’ ERISA class action alleging that UHC’s wrongful overpayment recoupment is in violation of federal law, ERISA. Avym now offers executive webinars to examine the profound legal impact for all providers and payers.

The Court case info: Premier Health Center, PC, et al. v. Unitedhealth Group, et al., Case #: 2:11-cv-00425, United States District Court District of New Jersey, Filed 03/30/12.

The insurance practice of overpayment recoupment has been and is becoming a larger legal and financial challenge for health plans, healthcare providers and patients to overcome. Almost all health care providers have been affected by an overpayment dispute over the past few years and according to industry estimates, more than 50% of the $2.6 trillion in annual US healthcare expenditure is subject to overpayment dispute.  Additionally, more than 10% of any previous and future reimbursements are subject to overpayment recoupment by the payers in both private and public sectors.

According to the Court document, the healthcare provider and their association plaintiffs are challenging defendants’ practices of improperly recouping previously paid health care benefits from providers without complying with procedural protections under ERISA, “Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment.” The Defendants seek dismissal of Plaintiffs’ Amended Complaint for lack of standing to sue and for having failed to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). The Court “ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims”, but granted defendants’ motions to dismiss claims, without prejudice, against two subsidiary companies of UHC.

The case factual background was described in the Court document:

“After performing its services, pursuant to the assignment of benefits form, Premier submits a claim to United who will then make payment to Premier on the claim. Occasionally, United will engage in post-payment audits of benefit payments. Following the post-payment audit process, United determined that they had erroneously made overpayments to the Plaintiffs and demanded repayment. Plaintiffs allege that United “took steps to coerce the Individual Plaintiffs and other Class members to return the alleged overpayments, including by withholding payments from new and unrelated services and applying them to the alleged debt, or by filing invalid lawsuits seeking to compel repayment”.

From the court document: “Plaintiffs further allege that many of the United Plans at issue are governed by ERISA, “which establishes strict rules and procedures that United or other entities that administer ERISA plans must comply with.” Furthermore, “ERISA sets forth specific steps that must be followed when an insurer such as United makes an ‘adverse benefit determination’ by denying or reducing benefits, including by providing a ‘full and fair review’ of the decision.” “By making a retroactive determination that a previously paid benefit was, in fact, paid improperly, an insurer makes an adverse benefit determination under ERISA.” Plaintiff avers that “United has violated ERISA by making its retroactive adverse benefit determinations without complying with ERISA[’s] requirements.”

On January 24, 2011, Plaintiffs filed a complaint in the United States District Court for the District of New Jersey.  On April 22, 2011, YF Corporation’s ambulatory surgical center (ASC) client, Beverly Hills Surgical Center (BHSC), as a Named Class Plaintiff, filed a class-action in federal court against UnitedHealth Group for alleged ERISA violations through its abusive overpayment recoupment practice.  With assistance from YF Corporation, BHSC, which represents all ambulatory surgical center facilities, is the first ASC facility provider in the nation to combat abusive overpayment recoupment practices by filing an ERISA class action against UnitedHealth Group, the largest health insurer in America.

“On April 22, 2011, Plaintiffs filed an Amended Complaint, which is the subject of Defendants’ United and Health Net motions to dismiss. The parties have submitted their respective briefs and the Defendants’ motions are now ripe for this Court’s adjudication.”

The Court denied the Motion to Dismiss filed by United in its entirety, including denying UHC’s anti-assignment argument and upholding the standing of all providers’ national and state association plaintiffs: “In light of the above, the Court finds that based upon Defendants’ course of conduct with Plaintiffs, Defendants have waived any right to enforce the anti-assignment provision. Therefore, Plaintiffs have met their burden to establish standing to sue under ERISA.”

“Accordingly, the Court finds that the Associations have standing to bring ERISA claims on behalf of their individual members.”

“ORDERED that UnitedHealth Group, UnitedHealthcare Services, Inc., and OptumHealth Care Solutions, Inc.’s motion to dismiss—(D.E. 31)—is hereby DENIED as to all claims.”

If the Court denied each and every legal argument by UHC in this class action for overpayment recoupment, what does this mean to every overpayment request by every payer?

To find out more about PPACA/ERISA 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.