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DOL Gives Kiss of Death to MEWA Fiduciaries in 'Healthcare Madoff' Scheme

"At its height, the MEWA covered approximately 14,000 participants and beneficiaries. These participants worked for more than 560 employers in 36 different states. However the increased backlog of unpaid claims created significant problems for many members as doctors refused treatments because of unpaid bills and many members were sent to collections accounts, according to the DOL."

Bankruptcy Court Grants Hospital Group an ERISA 'Special Collection Agent' for All Denied Claims

"[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." [In Re: Victory Medical Center Mid-Cities, LP et al., No. 15-42373 (Bankr. N.D. Tex. Dec. 3, 2015)]

Fifth Circuit Clarifies and Approves ERISA Rights for Out-of-Network Providers Regardless of Non-PPO Discount

"According to the appellate court's ruling, Third Party 're-pricing negotiation' agreements and discounts will be preempted by ERISA if: '[t]he contracts by their terms are subject to the underlying ERISA plans.' Even after re-pricing discounts have been negotiated, [out-of-network] providers, with valid and complete assignments, have the right to seek all eligible payments according to the plan terms. The profound impact of this appellate court ruling may fundamentally change the nation's healthcare landscape and existing managed-care model." [North Cypress Medical Center v. Cigna, No. 12-20695 (5th Cir. Mar. 10, 2015)]

Another UnitedHealthcare-Administered ERISA Health Plan Sued

"[O]verpayment recoveries initiated by the large carriers have reached into the billions of dollars over the past 5 to 7 years. Yet, self-insured health plans have not reaped the benefits of successful overpayment recoupments. Consequently, recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for insurers."

Federal Appeals Court Sides with Out-Of-Network Doctors Against UnitedHealth

"[This] decision ... should act as a wake-up call to all self-insured health plans for potential rewards in the trillions of dollars in plan assets recovery for all self-insured ERISA plans nationwide, from cross plan overpayment recoupments and offsets done by all plan TPAs.... The appeals court [stated]: 'To adopt United's argument that the plan language granting it broad authority to administer the plan is sufficient to authorize cross-plan offsetting would be akin to adopting a rule that anything not forbidden by the plan is permissible.' " [Peterson v. UnitedHealth Group Inc., No. 17-1744 (8th Cir. Jan. 15, 2019)]

Seventh Circuit: Medical Provider Entitled to Third Party Fee Schedules

"[T]he 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.... [The court further stated:] 'An assignee designated to receive benefits is considered a beneficiary and can sue for unpaid benefits under section 1132(a)(1)(B) ... It follows that Dr. Griffin also must be a beneficiary able to sue when she is denied requested information.' " [Griffin v. TEAMCARE,No. 182374 (7th Cir. Nov. 26, 2018)]

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

"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.... 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." [Armijo v. ILWU-PMA Welfare Plan, No. 15-1403 (C.D. Cal. Aug. 1, 2017)]

District Court Rules That Cross-Plan Offset Constitutes 'Grave Conflict of Interest'

"In an extraordinary decision, [a U.S. district judge] has effectively barred cross-plan offsets. The judge weighed in on two very important questions: ... whether UHC acted 'reasonably' in interpreting its client's plans to permit cross-plan offsetting; and whether the practice complies with the 'fiduciary duties imposed by ERISA'. The court offered an answer to both issues while providing very clear guidance for plans, claims administrators, medical providers and patients." [Peterson v. UnitedHealth Group Inc., No. 14-2101 (D. Minn. Mar. 14, 2017)]

District Court Bars Cigna from Recouping Self-Insured Plan Assets

"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[.]" [Connecticut General Life Ins. Co. v. True View Surgery Center One, LP, No. 14-1859 (D. Conn. Mar. 8, 2017)]

EBSA/OIG Shows Path Out of Forest for Patients, Plans and Service Providers

"EBSA offers guidance for denied health care benefit claims after OIG reports EBSA did not have the ability to protect the estimated 79 million plan participants in self-insured health plans from improper denials of health claims.... EBSA is advocating for new 5500 Schedule J reporting requirements to include a range of claims payment data ... [It] appears the EBSA is providing guidelines or possible 'Red Flags' for possible investigations into violations.... EBSA has made it clear that it is committed to conducting focused yet robust health investigations that seek global corrections of violations in order to restore losses to participants who were harmed."