ERISAclaim.com - Supreme Court Managed Care ERISA Watch

Supreme Court ERISA Watch

Unless Congress Rewrites ERISA, Federal Court Ruling Is the Only and Ultimate Answer to Interpretation of Mysterious ERISA Statutes and Regulations for Our Managed Care Claim Denials and Disputes. Case Law in ERISA Develops Every Day. Without Understanding of ERISA Case Law, One Will Never Truly Understand What ERISA Really Means in Dollars and Sense of Health-care Benefits Dispute in 80% of health-care claims or 60% of health expenditures in the U. S..

For Any Claim Denial and Appeal Process, the Superpower and Protections Only Come from Truly Understanding of ERISA Statutes and Regulations, Ever Changing Case Laws As Well As Practical Implementation of Most Recent Court Interpretation of the ERISA Statutes and Regulations.

A $1.0 Trillion Nuclear Solution to Our Nation's Health-care Crisis

US Supreme Court Visits ERISAclaim.com
at 11:57:03 AM on Friday, November 21, 2003

Post Supreme Court Davila Scoop:

ERISA Pre-emption of State Laws in Healthcare

01-10831

10/12/2004

Roark vs. Humana Inc

United States Court of Appeals

Fifth Circuit

F I L E D

October 12, 2004

Charles R. Fulbruge III

Clerk

In the

United States Court of Appeals

for the Fifth Circuit

_______________

m 01-10891

_______________

RUBY R. CALAD,

Plaintiff-Appellant-

Cross-Appellee,

WALTER PATRICK THORN,

Plaintiff-Cross-Appellee,

VERSUS

CIGNA HEALTHCARE OF TEXAS, INCORPORATED,

DOING BUSINESS AS HEALTHSOURCE,

DOING BUSINESS AS CIGNA CORPORATION,

Defendant-Appellee,

AETNA U.S. HEALTHCARE;

AETNA U.S. HEALTHCARE OF NORTH TEXAS, INC.,

Defendants-Appellees-

Cross-Appellants.

* * * * * * * * * * * * * * *

_______________

m 01-10905

_______________

JUAN DAVILA,

Plaintiff-Appellant,

VERSUS

AETNA U.S. HEALTHCARE, INC.;

AETNA U.S. HEALTHCARE OF NORTH TEXAS, INC.,

Defendants-Appellees.

_________________________

Appeals from the United States District Court

for the Northern District of Texas

Dist. Ct. m 3:00-CV-2368-D (5th Cir. Nos. 01-10891, 01-10905)

Dist. Ct. m 3:00-CV-2693-H (5th Cir. m 01-10891)

_________________________

ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before SMITH and BENAVIDES,

Circuit Judges.*

PER CURIAM:

The Supreme Court reversed and remanded this panel’s opinion. See Roark v. Humana, Inc., 307 F.3d 298 (5th Cir. 2002), reversed sub nom. Aetna Health Inc. v. Davila, ___

U.S. ___, 124 S. Ct. 2488 (2004). We requested and have received letters from the parties advising of their respective positions regarding the appropriate action to be taken by this court on remand. The parties appear to agree that this litigation is at an end. Plaintiffs Calad and Davila have nonsuited their actions in state court.

Accordingly, the appeals are DISMISSED. All costs are taxed against the plaintiffs.

* Judge Parker was a member of this panel but resigned from the court after the initial opinion was issued. This matter is now decided by a quorum. See 28 U.S.C. § 46(d).

CICIO v VYTRA HEALTHCARE

Cicio v. Vytra Healthcare (pdf)

Cicio v. Vytra Healthcare

2nd Cir. 09/24/2004

"DISCUSSION

The facts of this case are set forth in detail in our earlier opinion. We need not rehearse them here.

In Aetna Health Inc., the Supreme Court declared that "any state-law cause of action that duplicates, supplements, or supplants the [Employee Retirement Income Security Act of 1974 ("ERISA")] civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted." 124 S. Ct. at 2495. "Congress' intent to make the ERISA civil enforcement mechanism exclusive would be undermined if state causes of action that supplement the ERISA § 502(a) remedies were permitted, even if the elements of the state cause of action did not precisely duplicate the elements of an ERISA claim." Id. at 2499-2500......

CONCLUSION

Accordingly, we vacate our previous decision in this matter and affirm the district court's dismissal of Ms. Cicio's complaint."

Barber v. Unum Life Ins Co

3rd Cir. 09/07/2004

"Because we hold 42 Pa. C.S. § 8371 is conflict preempted by ERISA, or alternatively expressly preempted under ERISA § 514(a), we will reverse the judgment of the District Court and remand with instructions to dismiss Barber’s bad faith claim."

Overview: 3rd Circuit Boots Theory Allowing Bad-Faith ERISA Litigation (Law.com)

LAND v CIGNA HEALTHCARE OF FLORIDA
[07/30/03, 11th Cir.]

Robbie Lee Land v. Cigna Healthcare of Florida

11th Cir.

(August 27, 2004)

"ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before MARCUS and WILSON, Circuit Judges, and RESTANI , Judge. *

PER CURIAM:

After we issued our decision in this case on July 30, 2003, Land v. CIGNA Healthcare of Florida, 339 F.3d 1286 (11th Cir. 2003), the Supreme Court vacated and remanded for further consideration in light of its recent decision in Aetna Health Inc. v. Davila, 542 U.S. ----, 124 S. Ct. 2488 (2004). After carefully reviewing Davila, we find that Land’s state law malpractice claims against his health maintenance organization (“HMO”) were preempted by Section 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001-1461."

Eleventh Circuit Court Nixes State Malpractice Lawsuit Against ERISA HMO (RIA Pension & Benefits Week)

US Health Care Gaps Kill 79,000 People a Year, Report Shows (Bloomberg - United States)

"Sept. 23 (Bloomberg) -- Disparities in the U.S. health-care system result in up to 79,000 premature deaths each year because of a lack of preventative treatments and care for chronic conditions like diabetes, according to the National Committee for Quality Assurance."

The State of Health Care Quality, 2004: Industry Trends and Analysis (PDF) (National Committee for Quality Assurance)

61 pages. Excerpt: "NCQA's annual State of Health Care Quality report ... found that nearly 66.5 million avoidable sick days and more than $1.8 billion in excess medical costs can be traced to the health care system's routine failure to provide needed care."

ERISA Shield Explosion!!!

ERISA Patient's Bill of Right from Supreme Court

04/28/2004

U.S. SUPREME COURT Docket for 03-83

ORAL ARGUMENT TRANSCRIPTS

(Summary of Oral Arguments)

02-1845. Aetna Health Inc. v. Davila

03/23/04

Based on ORAL ARGUMENT TRANSCRIPTS in Aetna Health Inc. v. Davila, it is my prediction and forward-looking conclusion that ERISA Shield for 29 years be 95% exploded!

This will change entire health care and litigation landscape.

ERISA NEW remedy or relief will include:

Not only contractual damage as in the past;

But also "make whole" relief including compensatory damages, such as pain and suffering and attorney fees;

However, no punitive available as contemplated by the most;

While only 3% all civil cases go to trial, to 6% of which were awarded punitive damages anyway in nation's 75 big counties in 2001. (DOJ/BJS)

ORAL ARGUMENT TRANSCRIPTS

"QUESTION: Yes. And so, as a fiduciary they're -- they are analogous to a trustee, at least, the government said, if I read their footnote 13 right, that back in the old days when there was -- was a division of the bench, that one of the remedies available against a trustee would be in the nature of make whole relief that would put the beneficiary in the position he would have been in if the trustee had not committed the breach of trust." (page 13)

"QUESTION: No, but the whole thing would work if we could do that, wouldn't it? I mean, if we could get Mertens consistent with what Justice Ginsberg just read, then you would provide people who are hurt, in the way these plaintiffs were hurt, with a remedy. It wouldn't be punitive damages, but they would be made whole. So, if you are right in that this is basically a -- this is basically a claims decision and you shouldn't give punitives and others for the incorrect making of a claims decision. But the hole in this is that then the woman gets nothing or virtually nothing and, if we could reconsider that part, it would all work, wouldn't it?" (page 13)

"QUESTION: Lest we be too sanguine about the application of that law in this context, I don't know any equitable cases that would consider make whole relief to be giving -- where what is at issue is merely the payment -- the failure to pay money, refusal to pay money. Make whole relief would give you what you would have done with that money if you had gotten it. That's very strange." (page 15)

"QUESTION: But it would all work, you see, if I have a trust, the trust is supposed to buy me an insurance policy, and through total fault of the trust it doesn't, and the house burns down, the equitable relief appropriate would be consequential damages of the value of the house. Now, if that were an appropriate case, other equitable relief, this whole thing would work and you wouldn't be having to fill a vacuum." (page 25)

RUSH PRUDENTIAL HMO, INC. v. MORAN [00-1021]

(Rush) "It is, in fact, the Plan Administrator" (footnote 3)

As lower federal courts have erroneously interpreted ERISA preemption for decades, Supreme Court clarifies ERISA preemption for the first time, at the same time, Supreme Court clarifies and interprets ERISA as to how to identify and determine the plan administrator status, as most lower courts have erroneously interpreted ERISA for decades to consider the plan sponsor as the plan administrator when the plan administrator has granted the discretion to another party and has never exercised such discretionary authority.

ERISAClaim.com Comment: (click here for details)

RAYMOND B. YATES, M.D., P.C. PROFIT SHARINGPLAN V. HENDON

(RAYMOND B. YATES, M.D., P.C. PROFIT SHARINGPLAN V. HENDON)

Argued January 13, 2004–Decided March 2, 2004

U.S. Supreme Court

02-458. Raymond B. Yates, M.D., P.C., Profit Sharing Plan v. Hendon

01/13/04

"Held: The working owner of a business (here, the sole shareholder and president of a professional corporation) may qualify as a “participant” in a pension plan covered by ERISA. If the plan covers one or more employees other than the business owner and his or her spouse, the working owner may participate on equal terms with other plan participants. Such a working owner, in common with other employees, qualifies for the protections ERISA affords plan participants and is governed by the rights and remedies ERISA specifies. Pp. 8—20."

ERISAclaim.com Comments:

Supreme Court clarifies the definition of ERISA plan, even one employee, that's an ERISA plan;
A plan sponsor, employer or sole shareholder is a participant/employee of an ERISA plan, entitled to rights and protections in welfare and pension plans afforded by ERISA;
An employer in an ERISA plan may not sue an insurance company and/or ERISA plan for bad faith and punitive damages in ERISA benefits disputes arguing that an employer is not an employee of an ERISA plan, not subject to ERISA preemption, as reported recently in many states and jurisdictions.

Supreme Court Finds That Working Business Owner Is ERISA-Protected Participant When Plan Covers Other Employees (EBIA.com)

Aetna v. Davila

CNN.com - Justices appear split on HMO issue - Mar 24, 2004

'HMO horror story' comes to high court in patient law test - USATODAY.com

"Patients in Calad's position could appeal an HMOs decision internally, pay for the additional medical care themselves or sue someone else — a doctor, or a hospital most likely — several justices suggested Tuesday."

Supreme Court to rule on patients' rights
Miami Herald, FL - Nov 3, 2003

Supreme Court Considers Limits on Patients' Right to Sue Insurers (KRT Wire)

Both sides ready for HMO liability fight (AMNews)

Bush Turns His Back on Fight for Patients' Rights (LA Times)

As governor, he sought accountability for HMOs. Now he favors industry immunity.

"But instead, the administration is trying to shield health plans by stealth from accountability for denying coverage.

Were Bush to propose publicly that Congress immunize HMOs from suits for withholding care, there would surely be a firestorm of public anger. But his administration is on the verge of achieving the same result from the Supreme Court, almost without notice, veiled by the arcane language of the law."

SUPREME COURT Docket for 02-1845
Aetna v. Davila

For petitioner Cigna Healthcare of Texas, Inc.
and Cigna Health Inc.

Respondent's brief

Reply brief for Aetna Health Inc.; Appendix

Reply brief for Cigna Healthcare of Texas, Inc.

(Fifth Circuit) (01-10905.cv0) (PDF)

No. 02-1845: Aetna Health, Inc. v. Davila - Amicus (Merits)
View PDF Version (www.usdoj.gov)

American Association of Health Care Plans, Inc., et al. (Petition) [PDF]

Amicus Brief by Families USA in Supreme Court HMO Liability Case (Families USA)

Amicus Brief by AMA & TMA....

SUPREME COURT Docket for 03-83
CIGNA v. Calad
(Fifth Circuit) (01-10891.cv0) (PDF)

ORAL ARGUMENT TRANSCRIPTS

02-1845. Aetna Health Inc. v. Davila

03/23/04

ERISA Shield Explosion!!!

ERISA Patient's Bill of Right from Supreme Court

04/28/2004

U.S. SUPREME COURT Docket for 03-83

ORAL ARGUMENT TRANSCRIPTS

(Summary of Oral Arguments)

02-1845. Aetna Health Inc. v. Davila

03/23/04

Based on ORAL ARGUMENT TRANSCRIPTS in Aetna Health Inc. v. Davila, it my prediction and forward-looking conclusion that ERISA Shield for 29 years be 95% exploded!

This will change entire health care and litigation landscape.

ERISA NEW remedy or relief will include:

Not only contractual damage as in the past;

But also "make whole" relief including compensatory damages, such as pain and suffering and attorney fees;

However, no punitive available as contemplated by the most;

While only 3% all civil cases go to trial, to 6% of which were awarded punitive damages anyway in nation's 75 big counties in 2001. (DOJ/BJS)

ORAL ARGUMENT TRANSCRIPTS

ERISAclaim.com Comments (02/09/2004):

After reviewing briefs from petitioner and respondent and Merits from U.S. government, the following are my comments:

A. ERISA does not preempt respondent's state claim as Congress has never intended to federalize medical malpractice or medical decisionmaking as interpreted in recent Supreme Court ruling in Pegram et al. v. Herdrich.

Any reliance on any Supreme Court ruling, Pilot Life Insurance Co. v. Dedeaux, prior to Pegram et al. v. Herdrich is misplaced as Supreme court interpretation, in Pegram et al. v. Herdrich, of Congress intention in enacting ERISA in 1974 could never have dreamed to make mixed medical decision by a fiduciary that could harm plan participant.

""we think Congress did not intend Carle or any other HMO to be treated as a fiduciary to the extent that it makes mixed eligibility decisions acting through its physicians." Pegram et al. v. Herdrich

B. Petitioner and U.S. argued that Pegram et al. v. Herdrich is only intended or applicable to an HMO owned and operated by physician, and appeals court misread Pegram, but this argument is directtly contrary to Supreme Court plain English interpretation in Pegram et al. v. Herdrich:

""we think Congress did not intend Carle or any other HMO to be treated as a fiduciary to the extent that it makes mixed eligibility decisions acting through its physicians."

In this sentence, "Carle" refers to an HMO owned and operated by physicians. "any other HMO" refers to any and other HMO regardless who owned and operated, as long as "it makes mixed eligibility decisions acting through its physicians", it (HMO) was not intended by congress to be treated as a fiduciary because:

"(b) Under ERISA, a fiduciary is someone acting in the capacity of manager, administrator, or financial adviser to a 'plan,'"

In " it makes....", it refers to an HMO. "Acting through its physicians" means carrying out mixed decisions through its physicians instead of HMO has to be owned by physicians.

"Held: Because mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA" is applicable to any and other HMO. The appeals court reliance on Supreme Court ruling in Pegram et al. v. Herdrich is not misplaced or misread.

Both petitioner and US argued that Pegram et al. v. Herdrich is only applicable to an HMO owned by physicians, respondent did not specifically explained the above captioned with only objections through a footnote.

C. Petitioner does not deny it made mixed treatment and eligibility decisions.

"a "medi-cally necessary" procedure or treatment often is defined as one that is not only medically appropriate, but also more cost-effective than any other""

"Generally, such definitions incorporate economic considerations as well as medical ones:"

As to hospital discharge decisionmaking in determining the number days days to discharge, unless the PLAN's SPD has a number of days as a cap for that diagnosis and treatment procedure, it's pure medical, non-fiduciary decision under Utilization Review.

D. Petitioner cited New ERISA regulation, section 503-1 (k) (2), in arguing that state Insurance law requiring utilization review shall have no jurisdiction on decisions made by the insurer, plan fiduciary and employer, asserting that Texas HMO liability act shall have no jurisdiction over a fiduciary, but this argument is just contradictively made because new provision (k) of ERISA regulation is mainly intended to provide no ERISA preemption of state law requiring utilization review in medical decisionmaking in utilization review and such a state law shall not prevent application of new ERISA claim regulation as long as a decision is made by an insurer and the plan fiduciary, and new regulation, § 2560.503-1(h)(3)(iii), requires a plan named fiduciary consult with a healthcare professional in making medical judgment such as in this case, medication and hospital discharge decisions. An appropriate healthcare professional is defined as some one who is licensed in the same state to practice same medicine, but petitioner made that medical decision as a healthcare professional.

E. If ERISA is not intended by Congress in 1974 to treat a mixed treatment and eligibility decision as a fiduciary decision, and a mixed treatment and eligibility decision is a nonfiduciary decisionmaking as interpreted by Supreme Court in Pegram et al. v. Herdrich, and if no dispute is made on the material fact that mixed treatment and eligibility decisions were made by the petitioner, ERISA does not preempt respondent's alleged state tort claim. As to whether Texas HMO liability act is preempted by ERISA, the issue is moot in dismissing respondent claims. And if Texas HMO liability act has no impermissible connection to the ERISA plan, as to benefits fiduciary decisionmaking, and it regulates only quality of medical care in protecting public health and safety, it will not be preempted by ERISA.

ERISAClaim.com Comment (03/20/2004) on Reply brief for Aetna Health Inc. :

My Comments B, made on 02/09/2004 before Aetna's Reply Brief as above captioned, pointed out that "respondent did not specifically explained the above captioned with only objections through a footnote." BUT I provided The "response to this distinction other than the question-begging assertion that HMOs “should not be permitted to avoid malpractice liability” by adopting this structure." Please review my "Comment B" for details.

Reply brief for Aetna Health Inc. (Page 8):

"3. To sow confusion where there is none, Davila and his amici recite this Court’s reference in Pegram to a “puzzling issue of preemption” that justified reluctance to infer an ER-ISA case of action in that case. Resp. Br. 28 (quoting Pe-gram v. Herdrich, 530 U.S. 211, 236 (2000)) (internal quota-tion marks omitted). But however “puzzling” the issue might be in the context of the “mixed” decisions made by a physician owner of a group-model HMO (or a staff-model HMO, where treating physicians, like the defendant in Pegram, also make both coverage and treatment decisions), the issue is entirely straightforward where, as here, coverage and treatment are clearly separated. Davila offers no response to this distinction other than the question-begging assertion that HMOs “should not be permitted to avoid malpractice liability” by adopting this structure. Resp. Br. 36. But by engaging only in benefits administration—which ERISA regulates exclusively, leaving no room for additional state-law medical standards—Aetna has never entered the sphere of traditional medical practice that might justify subjecting it to state-law malpractice liability.⁷That sphere is left to physicians.

⁷ As both Davila and the Texas Attorney General state, the THCLA on its face applies even when the HMO provides no medical treatment, if the plaintiff shows that the HMO’s coverage."

If this argument is valid, then the whole Davila is not about ERISA pre-emption, as Davila is not about ERISA.

Davila is not about "to persuade this Court to modify or abandon Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41 (1987), and its progeny." (Reply Brief page 1), Davila is not about Pilot Life at all, Davila is about Pegram, "Because mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA". Davilia is not about ERISA, "not fiduciary decisions under ERISA" when "mixed treatment and eligibility decisions" are made by any HMO's, ultimately carried out by physicians.

""we think Congress did not intend Carle or any other HMO to be treated as a fiduciary to the extent that it makes mixed eligibility decisions acting through its physicians." Pegram

"it makes mixed eligibility decisions" = "Carle or any other HMO" makes mixed eligibility decisions"

then "acting through its physicians."

"any other HMO" (it could be any types of HMO) could be any one who/it makes final mixed decisions but treating physicians, otherwise there could be no denials in any HMO's if treating physicians make final decisions, while any treating decisions made by the plan in managed care setting have to be carried out by treating physicians and patients, yet this was misconstrued by petitioner as initial and final mixed decisions were completely made by treating physicians.

Therefore, Davila is not about Pilot Life but Pegram, not ERISA, no pre-emption.

However, Petitioner's argument that physicians and patients could have and should have appealed plan's denial decisions is not completely pointless, had ERISA plans and managed care industry in past 30 years followed ERISA claim procedures, established and maintained reasonable ERISA appeal procedures for physicians and patients.

No one in the country for 30 years knows how to do ERISA appeals, almost all physician's ERISA appeals were dismissed by courts on the ground of ERISA plan's anti-assignment provisions when petitioner argues that:

Reply brief for Aetna Health Inc. (Page 6):

"If physicians disagree with denials of coverage, they may provide the recommended care or services and pursue the ERISA beneficiaries’ rights to payment themselves, pursuant to the assignment of benefits taken at the outset of providing care. See, e.g., Decatur Mem’l Hosp. v. Conn. Gen. Life Ins. Co., 990 F.2d 925, 926-27 (7th Cir. 1993)."

and ERISA appeals were done for patients in the following fashion:

Aetna Video Shows ERISA Patients Mistreated

McDougall vs Pelchart, et al (Aetna, UPS)

And the leadership foreclosed meaningful ERISA appeals through ERISA adminstrative enforcement to avoid tort actions by patients:

[rules to be "self-enforcing"] & Leadership.

Employers and ERISA managed care industry must practically and meaningfully promote ERISA claim appeal educations, compliance and enforcement to use meaningful ERISA administrative appeal avenue to avoid Tort avenue to solve this conflict and the root of U.S. healthcare crisis with skyrocketing costs.

Had Davila and Dr. Lopez been afforded meaningful ERISA Appeals by ERISA plans, this whole tort thing would never have happened.

ERISA Failure = Tort Actions = Healthcare Crisis

(end 03/20/2004)

ERISAclaim.com Prophecy (11/17/2003):

The ruling from the Supreme Court will be that of Pegram + CICIO v VYTRA HEALTHCARE = Pegram II:

1. "Mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA. (Pegram);

2. "Without regard to Mr. Cicio's "constellation of symptoms" but in the abstract", Davila and Calad's medical claim (medications & discharge) decisions are not fiduciary decisions under ERISA. (CICIO)--(How to draw the line between mix or pure?=mix!)

The consolidated Davila and Calad case will be Pegram II, a contributing factor for fixing EFS, ERISA Failure Syndrome and determining factor to ERISA medical liability preemption.

Who Would Decide When to
Discharge A Patient?
(Copyright © 2004 by Jin Zhou, ERISAclaim.com)

U.S. SUPREME COURT Docket for 03-83

ORAL ARGUMENT TRANSCRIPTS (page 16-17 0f 49)

02-1845. Aetna Health Inc. v. Davila

03/23/04

"QUESTION: Yes, but in the situation in the hospital case, there was no time to get relief. How could they -- how could they get relief from the denial of the extra day in the hospital between midnight and the next morning?

.....

QUESTION: And what does that mean in the hospital setting? And what -- was she going to file a complaint with the Department of Labor?

MR. FELDMAN: These claims can be made orally, again, if the exigencies require, and she could -- she didn't try -- as far as we know, no one made a phone call to the insurer and said can I get the extra benefits; she needs it. We don't know what the results of that would have been.

QUESTION: Well let's assume the case -- because your preemption item would cover even the most extreme case. Assume the case in which the patient and the doctor both called the agency and appealed and they said we're too busy, we can't handle it and it later determines they were -- did not exercise due care.

MR. FELDMAN: But then --

QUESTION: Why are you preempting the state providing a remedy for that situation?

MR. FELDMAN: That would have been itself a denial of their obligations under the Department's claim processing --claims processing procedures. But let me say there's also --

QUESTION: It would have been a denial, but it wouldn't have given her the extra day in the hospital?

MR. FELDMAN: Right, but there are other backstops for her getting the extra day in the hospital. She is, at that point, in the same position as anyone else who can't pay for another day in the hospital but they need it.

QUESTION: I understand.

MR. FELDMAN: It's up to her doctor, with whom she has a doctor patient relationship that's a consensual relationship for providing medical treatment. It's up to her doctor to decide when she should be discharged from the hospital and when she shouldn't."

(Page 17-19)

JAMES A. FELDMAN, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the United States, as amicus curiae, supporting petitioners.

Who Can Be a Medical Reviewer under ERISA?
(Copyright © 2004 by Jin Zhou, ERISAclaim.com)

U.S. SUPREME COURT Docket for 03-83

ORAL ARGUMENT TRANSCRIPTS (page 46 0f 49)

02-1845. Aetna Health Inc. v. Davila

03/23/04

"QUESTION: Mr. Estrada, you can address what you would like but there are three points that have come up during the Respondent's presentation that I'd be interested with a response to.

Number one, is it true that the people who make the decisions for your client must be medical doctors in Texas?

MR. ESTRADA: Well it is true by virtue of DOL regulations which provide that no claim may be turned down without input from a medical professional in the relevant area"

New Federal Claim Regulation (Final Rule)

"Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)]
"The term `health care professional' means a physician or other health care professional licensed, accredited, or certified to perform specified health services consistent with State law." [page 70271 CFR § 2560.503-1(m)(7)]

	"medical doctors in Texas" = MD licensed to practice medicine in Texas for a Texas ERISA case;
	"a medical professional in the relevant area" = relevant area of state laws in license jurisdiction, scope of practice and relevant local standard of care;
	"licensed" = licensed by the State Government/licensing board;
	"to perform" = to practice medicine or health care services in the State;
	"specified health services" = medical procedures or services being reviewed or denied, instead of file review or insurance coverage reviews services;
	"consistent with State law" = consistent with State laws where the health care professional is legally licensed to practice medicine or health care services with respect to state jurisdictions, scope of license and state local medical standard of care.

"The term `health care professional' means, in layman term, a physician or other health care professional who is at least licensed in your state (and more, board certified too) to practice the specified/specific health services being reviewed or denied of your claims, consistent with your state law jurisdiction, scope of practice and local medical standard of care. Someone who is not licensed to practice the same health care services specified/denied in your claims is not qualified as an "appropriate health care professionals" as defined under ERISA § 2560.503-1(m)(7).

Someone who is not licensed in your state to practice "specified health services" but who is merely registered under state or other means (URAC, IME, SSD or Peer Reviews) to do Utilization Reviews (UR) is not qualified as an "appropriate health care professionals" as defined under ERISA § 2560.503-1(m)(7).

U.S. Supreme Court visited ERISAclaim.com in regard to ERISA § 2560.503-1(h) at 11:57:03 AM on Friday, November 21, 2003 for this No. one point. Click here for more coverage of Supreme Court Visiting at ERISAClaim.com.

U.S. SUPREME COURT Docket for 03-83

ORAL ARGUMENT TRANSCRIPTS (page 16-17 0f 49)

02-1845. Aetna Health Inc. v. Davila

03/23/04

"MR. FELDMAN: I -- it's not clear to me whether it would, because it's not clear to me whether there was a fiduciary involved in this case. Neither of the claimants in this case, neither they -- the people who denied the benefits on behalf of the plans may or may not have been fiduciaries.

QUESTION: But, as Mr. Estrada just told us that, for these purposes, both Aetna and CIGNA would be fiduciaries.

MR. FELDMAN: They -- well, whether the -- you know, I frankly haven't thought about whether the plan itself would be a fiduciary...... "

(Page 16-17)

JAMES A. FELDMAN, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the United States, as amicus curiae, supporting petitioners.

ERISA Shield Explosion? (Copyright © 2004 by Jin Zhou, ERISAclaim.com)
*PEGRAM et al. v.* HERDRICH U.S. Supreme Court, Decided 06/12/2000**	RUSH PRUDENTIAL HMO, INC. v. MORAN U.S. Supreme Court, Decided June 20, 2002
Kentucky Assn. of Health Plans, Inc. v. Miller U. S. Supreme Court, Decided: April 2, 2003	Aetna v. Davila Docket for 02-1845 SUPREME COURT SET FOR ARGUMENT Tuesday, March 23, 2004.

Black & Decker Disability Plan v. Nord (pdf)

U.S. Supreme Court, Decided 05/27/2003

02-469. Black & Decker Disability Plan v. Nord

04/28/03

Excerpt "Held: ERISA does not require plan administrators to accord special deference to the opinions of treating physicians.... [A]dministrators may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician. But courts have no warrant to require administrators ... to accord special weight to the opinions of a treating physician’s evaluation."

"In determining entitlement to Social Security benefits, the adjudicator measures the claimant’s condition against a uniform set of federal criteria. “[T]he validity of a claim to benefits under an ERISA plan,” on the other hand, “is likely to turn,” in large part, “on the interpretation of terms in the plan at issue.” Firestone Tire, 489 U. S., at 115. It is the Secretary of Labor’s view that ERISA is best served by “preserv[ing] the greatest flexibility possible for . . . operating claims processing systems consistent with the prudent administration of a plan.” Department of Labor, Employee Benefits Security Administration, http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html, Question B–4 (as visited May 6, 2003) (available in Clerk of Court’s case file). Deference is due that view."

ERISAclaim.com Comment: ERISA does not grant or require plan administrator/claim fiduciary with a rubber stamp to automatically reject or accept opinions from claimant's treating physicians, instead ERISA requires administrator/claim fiduciary to interpret particular terms of the plan at issue in accordance with ERISA prudent administration of the plan and obligated under fiduciary duties, specifically promulgated through new DOL Benefit Claims Procedure Regulation, Interpreted by DOL FAQ, B4, consistent decisionmaking requirement.

It is very important to note that U.S. Supreme Court now has clearly endorsed DOL's FAQ (New Guidance), effective for all ERISA plans after January 1, 2003, for its administrative interpretation of new Benefits Claim Procedure Regulation.

PACIFICARE HEALTH SYSTEMS, INC. v. BOOK

United States Supreme Court, Decided: April 7, 2003

02-215. Pacificare Health Systems, Inc. v. Book

02/24/03

"Physicians' claims that managed-health-care organizations violated the Racketeer Influenced and Corrupt Organizations Act (RICO) can be compelled to arbitration. Questions as to remedial provisions in an arbitration agreement and availability of RICO treble damages are premature. (FindLaw.com)

ERISAclaim.com Comment:

This Supreme Court ruling will have profound impact on any provider and managed-care dispute, affecting every managed-care contract between healthcare providers, managed-care organizations, plan sponsors and managed-care networks. Due to current political atmosphere on tort reform initiatives nationwide, medical associations, hospital associations and physician organizations will not be able to realize any significance of this landmark ruling from Supreme Court in managed-care industry.

This ruling is expected to most likely render a death sentence for all of the class-action lawsuits by medical associations because arbitration is only limited to provider contract dispute with managed-care organizations and networks/insurers and subscribers/participants & beneficiaries/patients benefit disputes in subscriber tract of parallel class-actions representing 143 million Americans are dismissed.

Only solution to managed-care nightmares for this nation is to educate everyone on ERISA claim procedure and SPD regulations, to prevent, avoid, minimize and resolve any potential disputes through statutorily prescribed appeal procedures under ERISA.

Check out how this ruling makes difference in provider's class actions defense later as to compelling arbitration as a ground for dismissal.

Thomas/Kutell, MD v. BCBS, Case #03-21296 - Judge Dubé

Jun 18, 04 Plaintiffs' Second Amended Class Action Complaint

Jun 28, 04 Solomon: First Amended Complaint - Class Action

Kentucky Assn. of Health Plans, Inc. v. Miller

United States Supreme Court, Decided: April 2, 2003

Kentucky Assn. of Health Plans v. Miller (Resources via Findlaw.com)
ERISA, Preemption of State Law, Health Insurance

00-1471. Kentucky Assn. of Health Plans, Inc. v. Miller

01/14/03

U. S. Supreme Court unanimously ruled on April 02, 2003 that Kentucky any willing provider statutes are not preempted by ERISA, another landmark ruling in Managed Care Industry.

"Held: Kentucky's AWP statutes are "law[s] ... which regulat[e] insurance" under §1144(b)(2)(A). Pp. 3-12."

"Today we make a clean break from the McCarran-Ferguson factors and hold that for a state law to be deemed a "law . . . which regulates insurance" under §1144(b)(2)(A), it must satisfy two requirements. First, the state law must be specifically directed toward entities engaged in insurance. See Pilot Life, supra, at 50, UNUM, supra, at 368; Rush Prudential, supra, at 366. Second, as explained above, the state law must substantially affect the risk pooling arrangement between the insurer and the insured. Kentucky's law satisfies each of these requirements."

"Footnote 1 Both of Kentucky's AWP laws apply to all HMOs, including HMOs that do not act as insurers but instead provide only administrative services to self-insured plans. Petitioners maintain that the application to noninsuring HMOs forfeits the laws' status as "law[s] . . . which regulat[e] insurance." §1144(b)(2)(A). We disagree. To begin with, these noninsuring HMOs would be administering self-insured plans, which we think suffices to bring them within the activity of insurance for purposes of §1144(b)(2)(A). Moreover, we think petitioners' argument is foreclosed by Rush Prudential HMO, Inc. v. Moran, 536 U. S. 355, 372 (2002), where we noted that Illinois' independent-review laws contained "some overbreadth in the application of [215 Ill. Comp. Stat., ch. 125,] §4-10 [(2000)] beyond orthodox HMOs," yet held that "there is no reason to think Congress would have meant such minimal application to noninsurers to remove a state law entirely from the category of insurance regulation saved from preemption."

ERISAclaim.com Comment:

1. State any willing provider statutes, along with state independent review laws as ruled in Rush Prudential HMO, Inc. v. Moran and state utilization review laws, are not preempted by ERISA;

2. State Insurance Law ERISA Preemption practice has "a clean break from the McCarran-Ferguson factors", two requirements instead of three requirements, directed at insurance and affected risk pool, instead of insurance policy;

3. From footnote 1, These state any willing provider statutes, external review statutes and utilization review statutes are not preempted by ERISA, and applicable to non-insuring HMO, non-insuring TPA's providing administrative service to self-funded ERISA plans. This ruling answered questions unanswered from Rush Prudential HMO, Inc. v. Moran for Texas Independent Medical Review Statutes, as to whether such state independent medical review statutes are applicable to self-insured ERISA plans.

'Any Willing Provider' Decision by Supreme Court Might Be More Than Meets the Eye (Managed Care Magazine)

Supreme Court's New Savings Clause Test Means More Indirect State Regulation of Self-Funded Plans (Thompson Publishing Group)

Supreme Court Articulates New Test for Determining Whether State Laws Regulate Insurance for ERISA Preemption Purposes [Kentucky Ass'n of Health Plans, Inc. v. Miller, 2003 U.S. LEXIS 2710 (U.S. 2003)]--(EBIA)

High Court Ruling Gives HMO Patients More Choices WASHINGTON (Reuters)

Excerpt: "WASHINGTON (Reuters) - A unanimous U.S. Supreme Court on Wednesday upheld state laws that require health maintenance organizations to open up their networks and give patients more choices of doctors or other medical providers.

The high court upheld two Kentucky laws that HMOs contract with any doctor or chiropractor in the region who agrees to abide by the plan's rules. About half of the nation's 50 states have such "any willing provider" laws."

Commentary: High Court Punches Another Hole in the Federal Law Shielding HMOs (American Medical News)

Federal court dissolves 'any will provider' injunction (Arkansas News Bureau)

RUSH PRUDENTIAL HMO, INC. v. MORAN [00-1021]

U.S. Supreme Court, Decided June 20, 2002

00-1021. Rush Prudential HMO, Inc. v. Moran

01/16/02

SUPREME COURT ALLOWS ILLINOIS STATUTE REQUIRING HMO TO PROVIDE INDEPENDENT MEDICAL REVIEW ON DEMAND

Excerpt (from unofficial syllabus): 'The Illinois HMO Act is directed toward the insurance industry, and thus is an insurance regulation under a commonsense view.... Congress recognized, the year before passing ERISA, that HMOs are risk-bearing organizations subject to state insurance regulation. That conception has not changed ..." (U.S. Supreme Court)

Supreme Court's Preemption Rollback Hangs Over Employer Health Plans, Managed Care Organizations (PDF) (Gardner Carton & Douglas)

Excerpt: "[Rush Prudential HMO, Inc. v.] Moran continues a string of decisions, begun by the [Supreme] Court in 1995, which narrow the 'ERISA preemption' doctrine that once seemed to put a stranglehold on states' ability to regulate healthcare. Moran may turn out to be the most significant of all these decisions, through applications of its analysis to other preemption issues."

ERISA 'Root Bound' in the States' Garden:

Highlights of Rush Prudential HMO, Inc. v. Moran (pdf)

Health Plan & Provider Report, By BNC, Inc

AAHP Statement on Supreme Court Ruling in Rush Prudential HMO, Inc. v. Moran and State of Illinois (6/20/2002)

Press Release - Boehner, Johnson Respond to Supreme Court Health Care Decision

Montemayor v. Corporate Health Ins.(U.S. 2002)

Supreme Court Orders 5th Cir. to Reconsider Its Decision on Texas "Independent Review" Statute (EBIA Weekly)

Excerpt: "In the [Rush Prudential HMO v. Moran] decision, the [U.S. Supreme] Court rejected the analysis of the Fifth Circuit, which had found a similar independent review law in Texas to be preempted because it conflicted with ERISA's civil enforcement provisions. The Supreme Court has now vacated the judgment in the Fifth Circuit case and sent the case back for further consideration in light of the Rush opinion."

Pennsylvania Supreme Court finds that State Law Claims Against Plan Decision-Makers for (Groom Law Group)

Egelhoff v. Egelhoff

"certiorari to the supreme court of washington

No. 99-1529. Argued November 8, 2000--Decided March 21, 2001

While David A. Egelhoff was married to petitioner, he designated her as the beneficiary of a life insurance policy and pension plan provided by his employer and governed by the Employee Retirement Income Security Act of 1974 (ERISA). Shortly after petitioner and Mr. Egelhoff divorced, Mr. Egelhoff died intestate. Respondents, Mr. Egelhoff's children by a previous marriage, filed separate suits against petitioner in state court to recover the insurance proceeds and pension plan benefits. They relied on a Washington statute that provides that the designation of a spouse as the beneficiary of a nonprobate asset--defined to include a life insurance policy or employee benefit plan--is revoked automatically upon divorce. Respondents argued that in the absence of a qualified named beneficiary, the proceeds would pass to them as Mr. Egelhoff's statutory heirs under state law. The trial courts concluded that both the insurance policy and the pension plan should be administered in accordance with ERISA, and granted petitioner summary judgment in both cases. The Washington Court of Appeals consolidated the cases and reversed, concluding that the statute was not pre-empted by ERISA. The State Supreme Court affirmed, holding that the statute, although applicable to employee benefit plans, does not "refe[r] to" or have a "connection with" an ERISA plan that would compel pre-emption under that statute."

PEGRAM et al. v. HERDRICH
U.S. Supreme Court, 06/12/2000

ERISAclaim.com Comment: Most Important ERISA Ruling for health-care providers, yet poorly understood.

1."Held: Because mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA,...."

Only pure eligibility/coverage decisions are ERISA business, mixed treatment/medical necessity and/then eligibility/coverage exclusion/denial are not ERISA business, not preempted by ERISA;

2. "(b) Under ERISA, a fiduciary is someone acting in the capacity of manager, administrator, or financial adviser to a "plan,"....Thus, in every case charging breach of ERISA fiduciary duty, the threshold question is not whether the actions of some person providing services under the plan adversely affected a beneficiary's interest, but whether that person was performing a fiduciary function when taking the action subject to complaint."

Performing medical necessity evaluation and making initial denial are not fiduciary functions, making denial decisions on appeals and interpreting plan coverage provisions are fiduciary functions, thus liable for fiduciary breach;

3. "...it could be argued that Carle is a fiduciary insofar as it has discretionary authority to administer the plan, and so it is obligated to disclose characteristics of the plan and of those who provide services to the plan, if that information affects beneficiaries' material interests."

On the most complicated but Alzheimer's ERISA land, whoever is making denial decision on appeals and making coverage interpretations (discretionary decision) is a fiduciary, and is obligated to disclose any secret and confidential documents used in claim denials and those who performed medical necessity reviews, if the patient's claims have been denied.

More discussions can be found on ERISA For Physicians

GREAT-WEST LIFE & ANNUITY INS. CO. v. KNUDSON [99-1786] U.S. Supreme Court, 01/08/2002

"Section 502(a)(3) of ERISA does not allow an employee health plan to seek to impose personal contractual liability on a plan beneficiary under the plan's reimbursement provision, because such relief is legal rather than equitable...."

Analysis: Supreme Court Rules Plan Cannot Sue for $400,000 as Reimbursement Despite Plan Language (EBIA Weekly)

Trial Court Rejects ERISA Reimbursement Claim, Following Supreme Court's Great-West Decision (EBIA Weekly)

Primax Recoveries, Inc. v. Sevilla (N.D. Ill. 2002). Excerpt: "EBIA Comment: This case illustrates how slippery the constructive trust remedy can be, since it depends so heavily on exactly who is holding the disputed amounts at the time a reimbursement claim is made."

Supreme Court Rules That ERISA Did Not Authorize Insurer's Suit To Enforce Subrogation Provision (Spencernet)

Supreme Court Ruling Bars Federal Lawsuits to Achieve Third-Party Recoveries (Thompson Publishing Group)

In Great West Decision, Supreme Court Gives Teeth to Its Mertens Decision (McCalla Thompson)