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Staff Attorney Offices Help Manage Rising Caseloads (02/17/04)

 

 

 

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)

 

 

 

ERISA Shield Explosion?

Dx from U.S. Supreme Court?

 

(Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

PEGRAM et al. v. HERDRICH

Decided 06/12/2000

Healthcare Quality by State Laws or ERISA?

RUSH PRUDENTIAL HMO, INC. v. MORAN

Decided June 20, 2002

Medical Necessity by State Laws or ERISA?

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

Decided: April 2, 2003

Managed Care Networks by State Laws or ERISA?

AETNA HEALTH INC. v. DAVILA

Decided June 21, 2004

Health Care Quality & Cost Control by State Laws or ERISA?

ERISA Shield Explosion!!!

ERISA Patient's Bill of Right from Supreme Court

(Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

04/28/2004

This will change entire health care and litigation landscape.

 

Click here for more details

 

06/21/04 02-1845 Aetna Health Inc. v. Davila

 

Breaking News:

 

Supreme Court Ruling today will change entire health care system. This ruling was correctly predicted by the publisher and editor of ERISAclaim.com, Dr. Jin Zhou, on 04/28/2004.

 

 

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MD Edgar Borrero v. United Healthcare of New York

 

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

(July 6, 2010)

http://www.ca11.uscourts.gov/opinions/ops/200815264.pdf

 

“Consistent with Connecticut State Dental, at least some of the claims pursued by the Appellants implicate legal duties dependent on the interpretation of an ERISA plan. These claims—about wrongfully denied benefits based on determinations of medical necessity—relate directly to the coverage afforded by the ERISA plans. Many of the other allegations in the complaint, for practices like downcoding and bundling, are based on independent provider-insurer contracts and do not implicate ERISA. But, because at least some of the allegations are dependent on ERISA, those claims are completely preempted and federal question jurisdiction exists. Because Appellants’ claims are completely preempted by ERISA, a federal court has subject matter jurisdiction over Appellants’ suit.”

 


 

 

SUPREME COURT OF THE UNITED STATES
Syllabus
KENNEDY, EXECUTRIX OF THE ESTATE OF KENNEDY,
DECEASED v. PLAN ADMINISTRATOR FOR DUPONT
SAVINGS AND INVESTMENT PLAN ET AL.


CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT
No. 07–636. Argued October 7, 2008—Decided January 26, 2009

 

""2. Although Liv’s waiver was not nullified by §1056’s express terms, the plan administrator did its ERISA duty by paying the SIP benefits to Liv in conformity with the plan documents. ERISA pro-vides no exception to the plan administrator’s duty to act in accor-dance with plan documents. Thus, the Estate’s claim stands or falls by “the terms of the plan,” 29 U. S. C. §1132(a)(1)(B), a straight for-ward rule that lets employers “ ‘establish a uniform administrative scheme, [with] a set of standard procedures to guide processing ofclaims and disbursement of benefits,’ ” Egelhoff v. Egelhoff, 532 U. S. 141, 148. By giving a plan participant a clear set of instructions for making his own instructions clear, ERISA forecloses any justification for enquiries into expressions of intent, in favor of the virtues of adhering to an uncomplicated rule. Less certain rules could force plan administrators to examine numerous external documents purporting to be waivers and draw them into litigation like this over those waivers’ meaning and enforceability......."

ERISAclaim.com Comments (02/4/2009)

 

    In this case, a unanimous U.S. Supreme court ruled that ERISA plan administrator must follow ERISA and Plan documents with no exceptions to decide whom and how much benefits to pay, disregard of state laws and other private non-ERISA agreements.

 

    Although the case background was based on a divorce dispute, the ERISA law is good for healthcare claims as well, 100% same for all claims under ERISA. This unanimous U.S. Supreme court ruling clarifies that ERISA plan must make payments to healthcare providers and accept appeals from healthcare providers if properly authorized under ERISA disregard of any state laws, Insurance Co. or TPA Policies  or managed care  PPO/HMO contracts.

 

This 2009 U.S. Supreme court unanimous answered our current questions if ERISA pre-empts and invalidates all PPO's and state laws!

This is the latest 2009 U.S. Supreme Court unanimous ruling on ERISA, and plan administration, with respect to ERISA, SPD and Sate laws or PPO's (divorce agreement), that ERISA plan administrator need only look at ERISA, SPD and ERISA plan documents, such as patient designation of authorized representive under ERISA, to make benefits decisions, and need to care less about what other private agreement, PPO or divorce agreement, or state laws, divorce decrees in this case, because that is what Congress intended in ERISA laws since 1974, or if that is not fair or right to certain people, they can fight out of my house (ERISA Plan) and sort out their problems in state court.

This is the latest, highest and unanimous ruling from U.S. Supreme court.

The main stream is only look at this case under and within divorce picture, but the ERISA legal principle from this case is for both pension and welfare - healthcare claims.
 

This ERISA assignment rule is also explained in DOL ERISA FAQ B3:

 

"B-3: When a claimant has properly authorized a representative to act on his or her behalf, is the plan required to provide benefit determinations and other notifications to the authorized representative, the claimant, or both?

 

Nothing in the regulation precludes a plan from communicating with both the claimant and the claimant’s authorized representative. However, it is the view of the department that, for purposes of the claims procedure rules, when a claimant clearly designates an authorized representative to act and receive notices on his or her behalf with respect to a claim, the plan should, in the absence of a contrary direction from the claimant, direct all information and notifications to which the claimant is otherwise entitled to the representative authorized to act on the claimant’s behalf with respect to that aspect of the claim (e.g., initial determination, request for documents, appeal, etc.). In this regard, it is important that both claimants and plans understand and make clear the extent to which an authorized representative will be acting on behalf of the claimant."

 


 

Hahnemann Univ Hosp v. All Shore Inc

3rd Cir., 01/29/2008

  1. Silent / Passive PPO's, No good!

  2. No Attorney’s fees during the pre-litigation administrative process under ERISA

 

"Upon receiving Hahnemann’s claim for benefits, BCI sought to determine whether a preferred provider organization (“PPO”) option applied to the claim. As a third-party claims administrator, BCI entered into contracts with various PPOs which allowed a health benefit plan access to the PPOs’ price discounts, even though there might not have been an agreement between the health benefit plan and the PPO itself. These are called passive PPOs. Upon analyzing Hahnemann’s claim for benefits, BCI determined that a 10 % discount might apply to Hahnemann’s claim based upon a PPO established by MultiPlan, Inc. (“MultiPlan”).

 

Hahnemann did not receive a check for the amount it requested, or even an amount applying a 10 % discount. Instead,the managing general underwriter concluded that a 40 % discount was applicable to Hahnemann’s charges through a different PPO. Specifically, the underwriter determined that the National Preferred Provider Network (“NPPN”) PPO applied. Thus, Hahnemann only received 60 % (or approximately $150,000) of the charges it originally submitted. Hahnemann received this payment in September 1999."

 

IV. CONCLUSION

 

In conclusion, we affirm the grant of summary judgment in favor of Hahnemann. However, because the District Court improperly included the amount of time spent by Hahnemann’s counsel during the pre-litigation administrative process, we vacate and remand the award of attorney’s fees for further proceedings  consistent with this opinion. The award of travel and expense costs is also vacated and remanded for further proceedings because the District Court awarded travel and related expenses to Hahnemann for its counsel located outside of the forum, even though there was no finding that forum counsel would have been unwilling or unable to represent Hahnemann. Finally, because the District Court separately awarded Court costs, as well as and travel and expense costs in its judgment, and the Appellants did not object on appeal to any part of the award of Court costs, we will not disturb the District Court’s award of Court costs.

 

 

 

 

 


 

Northeast Hospital Authority v Aetna Health Inc

S.D.Tex., October 17, 2007

 

PPO or ERISA???

Even for true PPO, Aetna asserted ERISA defense

 

"As in Pascack Valley Hospital and Anesthesia Care Associates, the crux of the parties’ dispute in this case arises from the terms of a contract-the Hospital Agreement-that is independent of the ERISA patients’ plans; the ERISA patients are not parties to the Hospital Agreement; and parties dispute the level, rate, or amount of payment, not the right to payment. Northeast does not challenge Aetna’s benefits determinations under the patients’ ERISA plans. Nor does Northeast challenge the scope of the plans’ coverage"

 

"Courts applying Davila have found that no there is no ERISA preemption when a health-care provider sues an insurance company to assert contract claims that exist independently of ERISA. The Third Circuit, for example, found no preemption in Pascack Valley Hospital, Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir.2004)."


 

 

SMS Fresno Community Hospital and Medical Center v. John Souza

EASTERN DISTRICT OF CALIFORNIA

July 3, 2007

 

ERISA Pre-emption v. State Laws

"The Ninth Circuit has explained that common law claims do not “relate to” an ERISA plan when the “adjudication of the claim required no interpretation of the plan, no distribution of benefits, and no dispute regarding any benefits previously paid. ....In contrast, where a claim requires interpretation of an ERISA plan or law, ERISA preemption exists.”

 

"Here, then, UMC can only escape ERISA preemption if it can either identify a separate contract between the parties, or allege a specific misrepresentation that would not require interpreting Teamster’s ERISA plan and would not affect the relationships between ERISA participants."

 

ERISA v. PPO

 

"Section 6.14 of the Blue Cross Contract provides as follows:

 

BLUE CROSS agrees to verify to HOSPITAL a person's BLUE CROSS  membership and to identify for HOSPITAL, based upon information provided by HOSPITAL, waivered conditions, current balance of lifetime maximum and any dollar limits applicable under the relevant Benefit Agreement. . . . A guarantee of eligibility is not a guarantee of payment. If HOSPITAL is notified that the member is eligible, HOSPITAL is entitled to payments for services rendered, covered under, and subject to the exclusions and limitations of the relevant Benefit Agreement."

 

This specific reference requires an examination and interpretation of the underlying Teamsters’ Plan and therefore distinguishes this case from those cited by UMC that found state law causes of action not preempted."

What to do

"The Court is also cognizant of UMC’s concern that, by denying payment based on an enrollee’s failure to follow procedures under their health plan, the risk of non-payment will be transferred to the hospital. Yet this argument assumes that UMC will be left with no recourse. To the contrary, UMC can step into the shoes of the patient/enrollees and sue under an assignment of benefits. Such a suit would, without question, be preempted by ERISA, and for this reason, UMC argues that it would be an enormous business burden to require it to seek payment in this way. This Court, though, is bound by the laws enacted by Congress and while it can interpret these laws, it cannot displace them.


For the reasons stated above, the Court finds that UMC’s First, Second and Third Causes of Action are preempted by ERISA."


 

 

 

ABATIE V ALTA HEALTH & LIFE

9th Cir. 08/15/2006

 

"In addition, this case requires us to consider how a court is to review an ERISA plan administrator’s decision when the procedure that produced the decision did not follow all statutory requirements. For the reasons that we will develop, we conclude that when a decision by an administrator utterly fails to follow applicable procedures, the administrator is not, in fact, exercising discretionary powers under the plan, and its decision should be subject to de novo review. Lesser irregularities, like the one in this case, do not remove the decision from abuse of discretion review, but rather should be factored into the calculus of whether the administrator abused its discretion.

 

.....We have held that an insurer that acts as both the plan administrator and the funding source for benefits operates under what may be termed a structural conflict of interest......."

ERISAclaim.com Comment:

For a healthcare provider  in appealing of denied medical benefits claims, he/she must be able to prove through the appeal that  "an administrator utterly fails to follow applicable procedures" in initial denial and subsequent appeal or reviews, among other things in a successful appeal practice. This is more important than arguing emotionally on medical merits of the claims, which most providers have been doing.

 

 

La. Health Serv. & Indem. Co. v. Rapides Healthcare Sys

 

FIFTH CIRCUIT REJECTS BCBS ERISA PREEMPTION CHALLENGE TO STATE ASSIGNMENT OF BENEFITS LAW REGARDLESS OF PPO PARTICIPATION BY PROVIDERS

 

 

00-MD-1334-MORENO - In Re Managed Care Litigation


Order granting summary judgment in favor of remaining defendants United and Coventry on all claims* (06/19/2006)
Final Judgment* (09/26/2005)
Order approving settlement among Prudential and physicians, physician groups & organizations, certifying class & directing entry of Final Judgment* (09/26/2005)
Final Judgment* (09/26/2005)
Order approving settlement among Health Net and physicians, physician groups & organizations, certifying class & directing entry of Final Judgment* (09/26/2005)
Final Judgment* (07/20/2004)
Order approving settlement, certifying class & directing entry of Final Judgment* (07/20/2004)
Omnibus Order granting in part and denying in part joint motion to dismiss the second amended consolidated class action complaint* (12/08/2003)

 

 

Semien, Kathleen v. Life Insur Co

7th Cir., 02/06/2006

 

Page 12:

"The reports by the physicians LINA hired to review Semien’s claim demonstrate a thorough consideration of the available information. These physicians found Semien capable of activities that would disqualify her from longterm disability coverage. Although Semien’s treating physicians reached different conclusions as to her abilities, under an arbitrary and capricious review, neither this Court, nor the district court, will attempt to make a determination between competing expert opinions. Instead, an “insurer’s decision prevails if it has rational support in the record.” Leipzig v. AIG Ins. Co., 362 F.3d 406, 409 (7th Cir. 2004). 


The two physician reports prepared for LINA, coupled with the Transferable Skills Analysis prepared based upon those reports, provide a sufficient basis and rational support for the conclusion that Semien was ineligible for long-term disability benefits. While the conclusions in the medical reports submitted by Semien are also rational, “[r]aising debatable points does not entitle [the claimant] to a reversal under the arbitrary-and-capricious standard.” Sisto v. Ameritech Sickness and Accident Disability Benefit Plan, 429 F.3d 698, 701 (7th Cir. 2005). 


No evidence in the record
demonstrates bias by the physicians LINA consulted. Nor has any evidence been presented to convince this Court that the appraisals by LINA’s physicians were so inherently flawed as to be rendered arbitrary and capricious. The confines of the ERISA statute and the constraints of judicial resources do not permit this Court, nor the district courts, to engage in the complex weighing of expert testimony when a plan administrator has been granted discretionary authority. Where an insurance plan gives discretionary authority to a plan administrator, ERISA provides a limited Article III review. Engaging in the type of in-depth review Semien advocates not only runs contrary to statutory intent, but..."

ERISAclaim.com Comment:

This court analysis of ERISA review standards indicates how claimant should appeal denials, not only on medical merits but also proof of "demonstrated bias" and "so inherently flawed" medical reviews.

 

The following case, although unpublished opinion, made the same ruling on this issue of trial discovery or appeal disclosure:

 

Donnell v. Metropolitan Life

4th Cir. 02/08/06
 


 

 

 

PRIMAX RECOVERIES v. GUNTER

[6th Cir.,  01/12/2006]

 

ERISA, Overpayment

 

 

 

Dunlap, Donald E. v. Nestle Incorpo

 

Opinion

12/12/2005, 7th Cir.

 


 

Krodel v. Bayer Corporation

(10/12/2005, D. Mass.)

 

Page 17 of 20

"Here, the Court holds only that where 1) a participant applies for coverage of a benefit which 2) is apparently covered under the language of an SPD and 3) the plan administrator thereafter re-interprets it in a more restrictive fashion and denies coverage 4) in contravention of the conclusions of all of the medical experts involved, that decision is arbitrary and capricious. The decision of the Plan Administrator will be reversed."

 

 


 

 

Krodel v. Bayer Corporation

(11/19/2004, D. Mass.)

 

Self-Insured Employer Simply Rubber Stamped the Decision of CIGNA and Violated New ERISA Claim Regulations

 

Bayer’s Denial of Dr. Krodel’s Claim

 

"1. Bayer violated ERISA by failing to "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. §1133(2); 29 C.F.R. § 2560.503-1(h)(1). Under that provision, a plan administrator is required to provide a review that "does not afford deference to the initial adverse benefit determination".29 C.F.R. § 2560.503-1(h)(3)(ii)."

 

"2. Bayer also violated 29 C.F.R. § 2560.503-1(h)(3)(iii) which provides that:

In deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other item is . . . medically necessary or appropriate, the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved the medical judgment. Id. § 2560.503-1(h)(3)(iii) (emphasis added).

As far as the record shows, Defendants failed to seek any medical advice in making their determination with respect to Dr. Krodel’s claim. Thus, a clear violation of the regulation occurred.

 

"3. Upon notifying Dr. Krodel of the denial of his claim, Bayer violated 29 C.F.R. § 2560.503-1(g)(1)(v)(A) which provides that, if a specific internal rule is relied on in making a determination, that rule must be provided or a statement made that it will be made available to the claimant free of charge. Id. § 2560.503-1(g)(1)(v)(A)."

 

"4. Bayer also violated 29 C.F.R. § 2560.503-1(g)(1)(v)(B), which states that:

If the adverse benefit determination is based on a medical necessity . . . either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request [will be provided to the claimant]. Id. § 2560.503-1(g)(1)(v)(B).

 

"5. Finally, Bayer violated its own internal rule by failing to inform Dr. Krodel that he might qualify for a different prosthesis."

 

"Second, Plaintiff contends that he is entitled to statutory penalties of approximately $40,000 (i.e. up to $100 per day for 400 days) based upon Defendants’ alleged failure to provide information to Dr. Krodel as required by ERISA. See 29 U.S.C. §1132(c). Specifically, Dr. Krodel alleges that the non-provision of the SOP constituted such a failure. His argument has merit because the SOP contained the underlying basis for his exclusion from coverage."

 

 


 

Buffonge v. Prudential Ins. Co.
1st Cr. 10-14-2005

"We have not previously addressed the issue raised in this ERISA appeal, which comes to us from the district court's entry of summary judgment concluding that a claims administrator's denial of long-term disability benefits was not arbitrary and capricious. The plaintiff appeals and asserts that his ERISA rights were violated because the administrator relied on material mischaracterizations of the medical record.......

 

We conclude that the process used was materially tainted, and the taint was sufficiently prejudicial, so as to render the process arbitrary. We remand to the district court to remand to the claims administrator for a new review of Buffonge's claim. We emphasize that we do not reach the issue of whether Buffonge was disabled."

 

 


 

 

McDonald, James v. Household Int'l

Seventh Circuit Court of Appeals

09/29/2005

 

Opinion

Oral Argument

Oral Argument

 

"‘make-whole’ relief"?

 

"It will be up to the McDonalds on remand to decide whether they wish to proceed with their case or to abandon it. In that connection, they may wish to take note of Justice Ginsburg’s comment in her concurring opinion in Davila, in which she drew attention to the Government’s suggestion that ERISA “as currently written and interpreted, may allo[w] at least some forms of ‘make-whole’ relief against a breaching fiduciary in light of the general availability of such relief in equity at the time of the divided bench.” Id. at 2504 (internal quotations omitted). (We note that in Davila, as here, the respondents had declined the opportunity to amend their state-law complaints to add ERISA claims, id. at 2502-03 n.7, but it appears that no one argued to the Court that this step was unnecessary, and it thus had no occasion to reach the point we have discussed in this opinion.)"

 

 

ERISA Patient's Bill of Right from Supreme Court

(Copyright © 2004-5 by Jin Zhou,  ERISAclaim.com)

 

 

Aetna Health Inc. v. Davila

06/21/04

Opinion of the Court

 

"Held: Respondents’ state causes of action fall within ERISA§502(a)(1)(B), and are therefore completely pre-empted by ERISA §502 and removable to federal court. Pp. 4–20."

 

"We hold that respondents’ causes of action, brought to remedy only the denial of benefits under ERISA-regulated benefit plans, fall within the scope of, and are completely pre-empted by, ERISA §502(a)(1)(B), and thus removable to federal district court. The judgment of the Court of Appeals is reversed, and the cases are remanded for fur-ther proceedings consistent with this opinion.7 It is so ordered."

"7  The United States, as amicus, suggests that some individuals in respondents’ positions could possibly receive some form of “make-whole” relief under ERISA §502(a)(3). Brief for United States as Amicus Curiae 27, n. 13. However, after their respective District Courts denied their motions for remand, respondents had the opportu-nity to amend their complaints to bring expressly a claim under ERISA §502(a). Respondents declined to do so; the District Courts therefore dismissed their complaints with prejudice. See App. 147–148; id., at 298; App. B to Pet. for Cert. in No. 02–1845, pp. 34a–35a; App. B to Pet. for Cert. in No. 03–83, p. 40a. Respondents have thus chosen not to pursue any ERISA claim, including any claim arising under ERISA §502(a)(3). The scope of this provision, then, is not before us, and we do not address it."

GINSBURG, J., concurring

"The Government notes a potential amelioration. Recog-nizing that “this Court has construed Section 502(a)(3) not to authorize an award of money damages against a non-fiduciary,” the Government suggests that the Act, as currently written and interpreted, may “allo[w] at least some forms of ‘make-whole’ relief against a breaching fiduciary in light of the general availability of such relief in equity at the time of the divided bench.” Brief for United States as Amicus Curiae 27–28, n. 13 (emphases added); cf. ante, at 19 (“entity with discretionary authority over benefits determinations” is a “plan fiduciary”); Tr. of Oral Arg. 13 (“Aetna is [a fiduciary]—and CIGNA is for purposes of claims processing.”). As the Court points out, respondents here declined the opportunity to amend their complaints to state claims for relief under §502(a); the District Court, therefore, properly dismissed their suits with prejudice. See ante, at 20, n. 7. But the Govern-ment’s suggestion may indicate an effective remedy others similarly circumstanced might fruitfully pursue.

Congress . . . intended ERISA to replicate the core principles of trust remedy law, including the make-whole standard of relief.” Langbein 1319. I anticipate that Congress, or this Court, will one day so confirm."

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)

 

 

 

 

 


 

 

Kalish v. Liberty Mutual

6th. Cir. 2005/08/18

"Even so, the Supreme Court has acknowledged “that physicians repeatedly retained by benefits plans may have an incentive to make a finding of ‘not disabled’ in order to save their employers[’] money and preserve their own consulting arrangements.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 832 (2003) (citation and quotation marks omitted). This court has similarly observed that a plan administrator, in choosing the independent experts who are paid to assess a claim, is operating under a conflict of interest that provides it with a “clear incentive to contract with individuals who were inclined to find in its favor that [a claimant] was not entitled to continued [disability] benefits.” Calvert v. Firstar Fin., Inc., 409 F.3d 286, 292 (6th Cir. 2005) (noting that the “possible conflict of interest inherent in this situation should be taken into account as a factor in determining whether [a plan administrator’s] decision was arbitrary and capricious”) (quotation marks omitted). Thus, although “routine deference to the opinion of a claimant’s treating physician” is not warranted, we may consider whether “a consultant engaged by a plan may have an ‘incentive’ to make a finding of ‘not disabled’” as a factor in determining whether the plan administrator acted arbitrarily and capriciously in deciding to credit the opinion of its paid, consulting physician. See Nord, 538 U.S. at 832.....

 

The fact that Dr. Rasak had the opportunity to physically examine Kalish on numerous occasions, while Dr. Conrad relied exclusively on a file review, makes Dr. Conrad’s failure to discuss the findings of Dr. Rasak all the more troublesome. See id. at 295 (concluding that the plan administrator’s reliance on a “‘pure paper’ review” was “just one more factor” that supported the court’s ruling that a denial of benefits was arbitrary and capricious); see also McDonald, 347 F.3d at 170 (“The evidence presented in the administrative record did not support the denial of benefits when only [the administrator]’s physicians, who had not examined [the claimant], disagreed with the treating physicians.”)."

 

 

 

 


 

 

 

JAMES M. MCGOWAN, SR.  v. NJR SERVICE CORPORATION; NEW JERSEY NATURAL GAS COMPANY

 

 

"1. ERISA’s Requirement that Plans Be Administered in Accordance with the Plan Documents

ERISA imposes a fiduciary duty on plan administrators to discharge their duties “in accordance with the documents and instruments governing the plan. . . .” 29 U.S.C. § 1104(a)(1)(D). As such, the statute dictates that it is the documents on file with the Plan, and not outside private agreements between beneficiaries and participants, that determine the rights of the parties. McMillan, 913 F.2d at 311-12 (“This clear statutory command, together with the plan provisions, answer the question; the documents control. . . .”); cf. Egelhoff v. Egelhoff, 532 U.S. 141, 150 (2001) (noting “ERISA’s requirements that plans be administered, and benefits be paid, in accordance with plan documents.”)."

 

ERISAclaim.com Comment: "ERISA’s Requirement that Plans Be Administered in Accordance with the Plan Documents" also regulates healthcare benefits disputes in managed care plans, such as PPO, HMO and POS or P4P networks, if "causes of action, brought to remedy only the denial of benefits under ERISA-regulated benefit plans".

 

 


 

 

 

Schneider, Janet M. v. Sentry Group

7th Cir. 09/07/2005

 

Oral Argument

Opinion

 

"The notice that Sentry afforded Ms. Schneider was indefensible as a matter of statute, regulation and case law."

 

Excerpt: "The notice that Sentry afforded Ms. Schneider was indefensible as a matter of statute, regulation and case law. In the first place, the April 23 letter failed to meet the requirement, contained both in § 1133(1) and in section 2560.503-1(g)(I), that the notification set forth the specific reasons for the termination of benefits. ....

 

Furthermore, even a cursory reading of the April 23 letter reveals that it did not identify the specific plan provision on which the denial was based, as required by section 2560.503-1(g)(ii). On the first two requirements set forth in section 2560.503-1(g), then, Sentry’s notice did not permit Ms. Schneider “a sufficiently clear understanding of the administrator’s position to permit effective review.” Halpin, 962 F.2d at 690.
We also must consider the requirements in section 2560.503-1(g)(iii) and (iv), which mandate that the notice contain “[a] description of any additional material or information necessary for the claimant to perfect the claim” and “[a] description of the plan’s review procedures and the time limits applicable to such procedures. .....

 

In short, the April 23 letter did not fulfill the purpose of the statute, which was to “afford the beneficiary an explanation of the denial of benefits that is adequate to ensure meaningful review of that denial.” Id. at 689-90. In light of the foregoing analysis, we must conclude that Sentry’s April 23 letter failed to comply substantially with the requirements of section 2560.503-1(g). Because we have determined that Sentry failed to provide Ms. Schneider with an explanation that is adequate to ensure a meaningful
review of the termination of her benefits, we conclude that Ms. Schneider is entitled to summary judgment on her claim that Sentry violated ERISA, 29 U.S.C. § 1133.3"

 

 


 

 

COMMUNITY MEDICAL CENTER, (Estelle Hopkins, Richard Sharkey) v. LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN

 

 

PPO Prompt Pay or ERISA?

 

"Community Medical Center (“CMC”) appeals the District Court’s orders granting summary judgment and awarding attorneys’ fees to Local 464A UFCW Welfare Reimbursement Plan (the “Plan”), and denying CMC’s motion for remand. For the reasons that follow, we will dismiss this appeal, vacate the District Court’s grant of summary judgment, and remand to the District Court with instructions to remand to the state court."

 

"We note that the Plan entered into a contract with MagNet, Inc., in 1995 that provided in relevant part:

 

Pursuant to a valid assignment from Eligible Person, Subscriber or its authorized agent shall directly pay Network Hospitals for Covered Services provided to Eligible Persons within thirty (30) days after date of receipt of submitted Clean Claims . . ."

 

 


 

 

Jamie N. Estes v. Federal Express
Opinion
U.S. Court of Appeals
Case No. 04-2582
Eastern District of Missouri
[PUBLISHED] [Riley, Author, with Wollman and Hansen, Circuit Judges]

 

"Jamie N. Estes (Estes) originally filed her lawsuit in the Circuit Court for the City of St. Louis, Missouri. After the defendants removed the lawsuit to federal court, the defendants filed a motion to dismiss Estes’s state law claims, contending the claims are preempted under the Employee Retirement Income Security Act ERISA), 29 U.S.C. §§ 1001-1461, and also requesting a court order directing Estes to file an amended complaint under ERISA. Estes opposed the motion, arguing her state law claims are not preempted because (1) she has established a prima facie case...... . District court did not err in finding defendant's claims were preempted by ERISA."

 

 


 

 

Ruttenberg, Andrew v. US Life Insur

Seventh Circuit Court of Appeals

 

Oral Argument (AUDIO FILE)

 

"Andrew Ruttenberg filed a claim for total disability benefits with his insurer, United States Life Insurance Company in the City of New York (“U.S. Life” or the “Company”). After protracted consultations with a number of physicians and  consultants produced no ruling on the claim, Mr. Ruttenberg filed suit. Originally, he alleged claims under Illinois law. The parties agreed to a stay in the proceedings while U.S. Life considered Mr. Ruttenberg’s claim. When U.S. Life denied the claim, the parties returned to the district court. The district court then determined that Mr. Ruttenberg’s claim was preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. It therefore dismissed the action with leave to file a claim under that statute.

 

After Mr. Ruttenberg filed an ERISA claim, the parties conducted discovery, and, eventually, each filed motions for summary judgment. The district court granted U.S. Life’s motion; it concluded that Mr. Ruttenberg did not qualify for coverage under the plan because he could not be considered a full-time employee under its terms.

 

Mr. Ruttenberg now appeals both the grant of summary judgment and the district court’s previous ERISA preemption determination; U.S. Life cross-appeals certain rulings made by the district court in the course of this litigation. For the reasons set forth in the following opinion, we reverse the judgment of the district court and remand this case for

proceedings consistent with this opinion."

 

 

 


 

"Any Willing Provider Law", ERISA Preemption

 

 Prudential Ins. Co. v. HMO Partners


06/29/05 Opinion

U.S. Court of Appeals
Eastern District of Arkansas

 

"[PUBLISHED] [Gruender, Author, with Riley and J. Gibson, Circuit Judges] Civil case - ERISA. See this Court's opinion in Prudential Insurance Co. of American National Park Medical Center, Inc. 154 F.3d 812 (8th Cir. 1998) (Prudential I). District court had authority to entertain and rule on defendants' Rule 60(b)(5) motion; argument that Arkansas repealed the Arkansas Patient Protection Act of 1995 when it passed the Freedom of Choice Among Health Benefit Plans Act of 1999 rejected; under Kentucky Ass'n of Health Plans v. Miller, 538 U.S. 329 (2003), the district court did not err in dissolving the Prudential I injunction with regard to plans other than self-funded plans, as ERISA does not preempt the Patient Protection Act with respect to ERISA plans which are not self-funded; however, the court erred in determining the Prudential I injunction should be dissolved with respect to self-funded ERISA plans; following Aetna Health Inc. v. Davila, 124 S. Ct. 2488 (2004), the court holds ERISA completely preempts the civil penalties provisions of the Arkansas Patient Protection Act as applied to suits that could have been brought under ERISA Section 502."

 

 

ERISAclaim.com Comments:

 

  1. ERISA does not preempt Arkansas "Any Willing Provider Law" except for self-funded ERISA plans;

  2. ERISA completely preempts any state laws if they regulate benefits claim or money from ERISA plans;

  3. If you want to join PPO or HMO, state law controls, if you want money from ERISA plans, ERISA controls.

Analysis: Eighth Circuit Opinion Issued in the Arkansas' AWP Battle (Attorney B. Janell Grenier on Benefitsblog)


 

 

 

PAUL D. GORMAN v. CARPENTERS' & MILLWRIGHTS' HEALTH BENEFIT TRUST FUND

[10th Cir. , 06/08]

 

ERISA Subrogation, SPD, Common Fund Doctrine & "Equitable Relief"

 

 

 


 

 

 

 

MAUREEN HEROUX v. HUMANA INSURANCE COMPANY

ND, IL, 06/08/2005

"B. Failure to Provide a Summary Plan Description

Heroux further alleges that Humana failed to supply her with a summary plan description as required by ERISA in §§ 1021(a), 1022, and 1024(b).6 This claim is brought pursuant to § 1132(c), which establishes a civil action for an administrator’s refusal to supply requested information that an employee welfare plan’s administrator is required to furnish to a participant or beneficiary under ERISA. 29 U.S.C. § 1132(c).

.....

Prior to the June 2000 amendment, the Policy identified Humana as its Administrator.Section 1024(b) mandates that the administrator furnish to each participant a summary plan description within 90 days after he or she becomes a participant. 29 U.S.C. §1024(b). Heroux started working for Duval in 1998 and was a plan participant. The June 2000 amendment to the Policy does not remove the initial duty owed to Heroux by Humana as Administrator prior to 2000. Accordingly, whether or not Humana’s June 2000 amendment to the Policy renders Duval the new plan administrator by default, Humana was the administrator prior to that amendment, and, as such, owed a duty to Heroux to provide her with a summary plan description. Thus, defendant’s motion to dismiss plaintiff’s claim against Humana for failure to provide a plan summary document under §§ 1021(a), 1022, and 1024(b) must be denied."

 

 

 

 


 

 

Employer Must Reimburse Medicare for Over Payments under MSP

 

Telecare Corp. v. Leavitt

(Fed. Cir. 2005)

"This case involves a dispute between Telecare Corp. (“Telecare”) and the government as to Telecare’s liability under the Medicare Secondary Payer statute, Social Security Act § 1862, codified at 42 U.S.C. § 1395y. The United States District Court for the Northern District of California held that Telecare was liable as a secondary payer. We affirm.

 

......

 

Therefore, we hold that the statute allows the United States to initiate an action against any employer that “sponsors or contributes to a group health plan,” where the group health plan “make[s] payment with respect to the same item or service (or any portion thereof) under a primary plan.” Such a construction gives reasonable meaning and effect to all the words in the statute, and is to be preferred over Telecare’s proposed interpretation, which would render parts of the statute inoperative. Telecare sponsors and contributes to the group health plan, and under the plain language of the statute it cannot prevail."

Medicare Secondary Payer: Improvements Needed to Enhance Debt, GAO Says (U.S. Government Accountability Office)

32 pages. Excerpt: "Last year, employer-sponsored group health plans ... were responsible for most of the nearly $183 million in outstanding Medicare secondary payer (MSP) debt. MSP debts arise when Medicare inadvertently pays for services that are subsequently determined to be the financial responsibility of another. The Centers for Medicare & Medicaid Services ... administers Medicare with the assistance of about 50 contractors that, as part of their duties, are required to recover MSP debt."

 

 

 


 

 

Benefit Concepts v. Macera

- 06/06/2005

The United States District Court
for the
Eastern District of Pennsylvania

 

---------

law.com - Article

 

ERISA Found to Pre-empt Motor Vehicle Law's Medical Caps
Shannon P. Duffy
The Legal Intelligencer
06-09-2005

 

 

 


 

 

 

CLEGHORN V BLUE SHIELD OF CALIFORNIA

 

9th Cir., 05/23/2005

 

OPINION

CANBY, Circuit Judge:


"We are presented once again with a question concerning the degree to which the federal Employee Retirement Income Security Act (ERISA) preempts state law. Douglas D. Cleghorn is a participant in his employers ERISA health plan offered by Blue Shield of California (doing business as Care-America) (Blue Shield). On one occasion he sought and received emergency medical services and Blue Shield denied reimbursement. Cleghorn sued Blue Shield in California state court, asserting state-law causes of action and alleging that Blue Shield had violated an emergency care provision in section 1371.4(c) of the California Health and Safety Code. Blue Shield removed the case to federal court and the district court held that Cleghorns claims were preempted by ERISA. When Cleghorn declined to amend his complaint to allege an ERISA claim, the district court dismissed his complaint for failure to state a claim. We affirm the judgment of the district court."
 

Statement of Sharon J. Arkin, Partner, Robinson, Calcagnie & Robinson [PDF] [HTM]

 

April 24, 2001

 

Statement of

Sharon J. Arkin, Partner, Robinson, Calcagnie & Robinson,

Newport Beach, California,

on behalf of Association of Trial Lawyers of America

 

Testimony Before the Subcommittee on Health

of the House Committee on Ways and Means

Hearing on Patient Protections in Managed Care

 

"H. Conclusion.

The ERISA "experiment" of total tort immunity is a dismal failure. People have suffered and died as a direct result. It is time to call a halt to this unwarranted and unprecedented immunity and to restore balance to the system.


Something must be done about ERISA's remedy limitations. And the need is not just the "superficial" one of fulfilling the fundamental principle of equity that "for every wrong there is a remedy." The need runs much deeper. As noted by Judge Young:

 

"A further cost of this near absolute immunity is its pernicious effect on our democratic system. Whenever Congress extinguishes a right which heretofore has been vindicated in the courts through citizen juries, there is a cost. It is not a monetary cost. It is a cost paid in rarer coin --the treasure of democracy self." (Andrews-Clarke, at p. 63, fn. 73.)

 

Comment from ERISAclaim.com:

 

In a lawsuit for reimbursement of emergency medical services fees for emergency room visit , plaintiff's California state court claim based on layperson standard, alleging that Blue of California violated an emergency care provision in section 1371.4(c) of the California Health and Safety Code, and plaintiff's refusal to follow ERISA rules when given a chance in federal court, is preempted by ERISA and therefore completely dismissed.

 

In simplest English-language, if anyone is disputing or claiming any money payment, even one penny from an ERISA sponsored health plan, regardless its managed-care shape, HMO or PPO, or its severity, emergency or nonemergency, ERISA law controls your dispute and lawsuit, your state laws are completely preempted by ERISA.

 

If your claim is from health insurance through employment in private sector, it is an ERISA claim.

 

ERISA claim regulation provides for better protections for patients and physicians.

 

From Doctors and Hospital Associations in California, without ERISA Education or Compliance in the Worst Healthcare Crisis

CMA Tells Supreme Court: Health Plans Must Not Be Allowed to Delegate Then Evade Payment Responsibility for Emergency Services 

 

Click here to read CMA's letter to the California Supreme Court.

Click here to read CMA's amicus brief in this case.

Court Rules Health Plans Can Evade Payment
Responsibility for ER Services; CMA Weighs Appeal
[Posted 09/19/03]

CMA Tells Court: Health Plan Must Pay for Emergency Services [Posted 10/24/02]

 

#######################################

April 2005 A Look at Managed Care Issues in 2005 California is among the .....

 

 

Once again, failure by providers and patients to follow ERISA claim regulation and to take legal action under ERISA will result in more damages to our entire healthcare system, by continuing to rely upon state laws to argue an ERISA claim and case.

 


 

 

 

ERISA For GM from the U.S. Court of Appeals for the Sixth Circuit:
 

Hill, et al v. Blue Cross of MI,

05/13/2005

 

OPINION

_________________


"KAREN NELSON MOORE, Circuit Judge. Plaintiffs-Appellants John L. Hill, Francine Barnes, Franchot Barnes, Francesca Barnes, and Glory Celestine (“Plaintiffs”) filed the instant putative class action against Defendant-Appellee Blue Cross and Blue Shield of Michigan (“BCBSM”), the third-party administrator for Plaintiffs’ employer-sponsored health insurance program (“the Program”). Plaintiffs allege that BCBSM’s handling of their claims for emergencymedical-treatment expenses resulted in the wrongful denial of benefits and constituted a breach of BCBSM’s fiduciary duties to Program members under the Employee Retirement Income Security Act of 1974 (“ERISA”). The district court granted BCBSM’s motion to dismiss Plaintiffs’ suit without prejudice on the ground that Plaintiffs failed to exhaust administrative remedies available under the Program prior to filing suit. Plaintiffs now appeal, alleging, inter alia, that exhaustion is not required for claims for breach of fiduciary duty, that exhaustion of administrative-review procedures would be futile, and that Plaintiff Hill has in fact exhausted his administrative remedies. For the reasons set forth below, we AFFIRM IN PART and REVERSE IN PART the district court’s order granting BCBSM’s motion to dismiss Plaintiffs’ complaint."

 

"b. Futility Exception to Exhaustion

 

    We also conclude that dismissal of Plaintiffs’ §§ 1104 and 1105 fiduciary-duty claims for failure to exhaust administrative remedies is improper because, in this case, exhausting administrative remedies would amount to an exercise in futility. We have recognized a general exception to the exhaustion requirement for ERISA claims when the remedy obtainable through administrative remedies would be inadequate or the denial of the beneficiary’s claim is so certain as to make exhaustion futile. See id. at 419. As we explained in Fallick:

The standard for adjudging the futility of resorting to the administrative remedies provided by a plan is whether a clear and positive indication of futility can be made.A plaintiff must show that it is certain that his claim will be denied on appeal, not merely that he doubts that an appeal will result in a different decision.

 

Id. (internal quotation marks and citations omitted).

 

    In their complaint, Plaintiffs allege that exhaustion of administrative remedies would be futile because: (1) BCBSM’s interests are aligned with GM, not the Program’s beneficiaries, and (2) BCBSM has refused to modify its claims-handling process, notwithstanding its long-standing knowledge that the current procedures violate Program provisions. As stated in the complaint:

Futility is particularly clear since Plaintiffs have sufficiently alleged breaches of fiduciary duty by BCBSM, and the existence of an inherent conflict of interest between BCBSM’s obligation as a fiduciary for ERISA plan participants, and BCBSM’s internal business motives. In fact, despite BCBSM’s direct knowledge that its practices have violated, and continue to violate, the express terms of the ERISA plans, BCBSM has refused to change its practice with respect to a large portion of its administrative services contracts. History has shown that BCBSM will only change its practice pursuant to threat of legal judgment......"

 

Comment from Jin Zhou, ERISAclaim.com: This case ruling indicates the entire GM health plan claim ERISA practice needs to be re-visited or revamped, as ERISA failure is the root cause of GM healthcare cost crisis and junk bond status, yet this GM ERISA bunker is least likely checked by GM for GM healthcare crisis and possible chapter 11. (Please e-mail  Jin Zhou at ERISAclaim.com for details of this Dx and more Rx)

 


 

 

ISLAND VIEW RESIDENTIAL TREATMENT CENTER, INC.,

 

v.

 

HARVARD PILGRIM HEALTH CARE, INC.,

VALUEOPTIONS, INC.,

GENETICS INSTITUTE, INC., and

WYETH,

(UT Dist, 04/14/2005)

 

Can ERISA SPD penalties be imposed on a plan administrator

in the absence of a request to that administrator?

 

Yes, but how?

 

"A number of Tenth Circuit cases have held, however, that under certain circumstances, a § 1132(c) penalty may be based on requests which were not made directly to the plan administrator. In McKinsey v. Sentry Insurance, 986 F.2d 401, 404 (10th Cir. 1993), the court rejected the proposition that penalties can be assessed against a “de facto” plan administrator, but stated that “if in practice, company personnel other than the plan administrator routinely assume responsibility for answering requests from plan participants and beneficiaries . . . the actions of the other employees may be imputed to the plan administrator.” In Boone v. Leavenworth Anesthesia, Inc., 20 F.3d 1108, 1110 (10th Cir. 1994), the court assessed a penalty against a plan administrator even though the request for plan documents was directed to the plan administrator’s counsel....."

 

 

 


 

 

Nichols v. The Prudential Insurance Company of America

(2nd Cir. 04/21/2005)

 

ERISA "Prompt Pay" or "Prompt Lawsuit"

Plan's failing to meet the deadlines in appeal decision making, claimant’s administrative appeal is deemed denied, and her administrative remedies are therefore exhausted, and plan lost deferential reviews standard

 

"The question of whether Nichols exhausted administrative remedies is in turn dependent on whether Prudential complied with the regulatory deadlines of 29 C.F.R. § 2560.503-1(h). This regulation requires that a plan administrator’s decision reviewing a denial of benefits must ordinarily be made within 60 days of the request for such review, but may be made within 120 days for special circumstances. 29 C.F.R. § 2560.503-1(h)(1)(i). Notice of any such extension must be given in writing before the commencement of the extension. 29 C.F.R. § 2560.503-1(h)(2). If no decision is rendered by the deadline, the claim for benefits is deemed denied on review. 29 C.F.R. § 2560.503-1(h)(4). Thus, if Prudential failed to meet the deadlines, Nichols’s administrative appeal is deemed denied, and her administrative remedies are therefore exhausted."

 

 

"In light of this reasoning, we conclude that we may give deferential review only to actual exercises of discretion. A “deemed denied” claim is not denied by any exercise of discretion, but by operation of law on the 60th (or 120th) day after the appeal is requested. We therefore hold that a “deemed denied” claim is entitled to de novo review, and place ourselves in harmony with Jebian, Gilbertson, and Gritzer."

 

 

2nd Circuit Orders Judge to Review Benefit Denial
Mark Hamblett
New York Law Journal
04-26-2005


 

ORNDORF v. PAUL REVERE LIFE INS

[1st Cir. 04/15/2005]

 

"LYNCH, Circuit Judge. This case requires us to address what is meant by de novo judicial review under ERISA of a denial of benefits when the ERISA plan does not preserve discretion in the plan administrator. That raises concomitant questions of whether the claimant is entitled to trial in the district court and what, if any, evidence may be admitted that is not in the administrative record before the ERISA administrative decision maker. Our conclusion is that given the nature of the claimant's challenge here -- that he did in fact establish his eligibility to benefits before the ERISA decision maker -- the claimant was not entitled to trial or to admit desired new evidence outside the administrative record or to discovery. Having defined the standards, we apply them to the facts, and uphold the denial of benefits."

 

ERISAclaim.com Comments: This illustrates the importance of ERISA appeals at administrative level by the claimant, not only the plan mandated level 1 and level 2 appeals, but also the voluntary level of appeal, before litigation is commenced.

 


 

 

 

LaMantia v. Voluntary Plan Administrators, Inc. HEWLETT-PACKARD COMPANY No. 03-15706
EMPLOYEE BENEFITS ORGANIZATION,

9th Cir, March 23, 2005

 


 

Kotler v. PacifiCare of California

Non-ERISA Case

CA SECOND APPELLATE DISTRICT, 2/10/05

 

Health Plan Lawsuit Watch (aishealth.com)


 

 

 

 

Gayle v. UPS

4th Cir. 03/09/2005

 

Attorney negligence in failing to timely file an appeal does not justify equitable tolling sufficient to excuse the lack of compliance with a ERISA-governed employee welfare benefit plan when a clear notice is given on timely limitation to appeal.

 

"OPINION
WILKINSON, Circuit Judge:


Lisa Gayle retained a law firm to represent her as she sought to preserve her disability benefits. For nearly seven months, the firm did nothing to press her claim. By the time it rediscovered her case, Gayle’s opportunity to appeal the denial of her disability benefits claim had expired. Under the terms of her ERISA-governed employee welfare benefit plan, Gayle could not pursue her claim in federal court until she had exhausted the internal appeals process. But the plan declined to consider her appeal since it was almost two months late. In this case, we consider whether attorney negligence justifies equitable tolling sufficient to excuse the lack of compliance with the plan’s appeal procedure. We conclude that it does not."

 

 


 

 

MINADEO v. ICI PAINTS

(6th Cir. 02/18/2005)

 

A Plan Administrator Must Either Provide the Documents Or Tell Why

 

"What Bartling says is that a plan administrator may require written authorization from a plan participant before satisfying a non-participant’s request for benefits information. Not inconsistent with that rule, we hold that a plan administrator is not entitled to ignore a request for pension benefits information made by an attorney on behalf of a participant, as Glidden did in this case for almost four months. Instead, plan administrator must either provide the requested information directly to the plan beneficiary (we note this option would have made a great deal of sense in the present case, as Murphy herself had first repeatedly requested the information by telephone before enlisting the aid of an attorney), or must act as the defendant in Bartling did, and inform the attorney that the information will be released upon the receipt of authorization signed by the plan participant. A plan administrator who fails to take either of these steps within the thirty day period imposed by 29 U.S.C. § 1132(c) is subject to the fines authorized by that same provision, at the discretion of the district court."

 


 

Roberts v. Independence Blue Cross

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 

 

Pre-certification under ERISA Plans?

 

Medical Necessity Or Summary Plan Description (SPD) Controls?

 

 

 


 

K Mings v Wal-Mart

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

01/18/2005

 

Pre-certification under ERISA Plans?

 

"On February 25, 2002, Plaintiff Andrea C. Mings underwent gastric bypass surgery. At the time, Mings was a participant in her employer’s employee welfare benefit plan. Prior to Mings’ surgery, her physician called Mings’ insurance carrier and received pre-certification for the procedure. Thereafter, Defendant Wal-Mart Stores, Inc. Associates Health and Welfare Plan (the “Plan”) denied coverage for the procedure claiming that it was not covered under the Plan’s terms and conditions. As a result of this denial, Mings filed her original complaint in the Marion Superior Court claiming that the Plan violated Indiana statutory law. ......"

 


 

Phelps v. C.T. Enterprises

(4th Cir. 01/12/2005)

 

Employer and plan sponsor are plan fiduciaries under ERISA if they're responsible for employees paycheck deduction and contribution, forwarding to TPA, for benefits claim payment.

 

"we conclude that a reasonable fact finder could find that C.T., and Theisen, Pomian and Templeton, the officers of C.T. who directed actions on its behalf, were fiduciaries under ERISA when, as representatives of the Employer and Plan Administrator, they directed that the Employees’ own paycheck contributions, which were then due for payment by the Claims Administrator (Kanawha) to third parties under the provisions of the Plan, be diverted instead for other purposes. Under the terms of the Plan documents, C.T. Enterprises, Inc., was identified as both the Plan Sponsor and Plan Administrator. As such, C.T., the corporate entity, was expressly made a fiduciary for administration of the assets of the Plan, which consisted of both corporate and employee contributions. In addition, it is not disputed that Theisen, Pomian and Templeton acting, respectively, as C.T.’s CEO, President and Controller, made the decision to pay other corporate expenses of C.T., rather than to remit the Employees’ own paycheck deductions to the Plan. Because they voluntarily assumed the responsibility of a fiduciary, they become subject to the obligations of a fiduciary under ERISA. In such circumstances, a renewed examination by the District Court of both Employees’ claims for breach of fiduciary duty is appropriate. Accordingly, it was error for the District Court to grant summary judgment against the Employees, and the judgment must be vacated and remanded for further proceedings."

 

 


 

 

Mullally v Boise Cascade Corp

(Northern District of Illinois, 01/10/2005)

 

"As to the first factor, the Seventh Circuit has held that "medical science confirms that pain can be severe and disabling even in the absence of `objective' medical findings, that is, test results that demonstrate a physical condition that normally causes pain of the severity claimed by the [plaintiff]" Carradine v. Barnitart, 360 F3d 751, 753 (7th Cir. 2004) (Carradine). Thus, while objective medical evidence must support a finding of an underlying impairment, subjective evidence can be used to demonstrate that the pain associated with that condition is disabling. Carradine, 360 F3d 753; see a/so Hawkins v. First Union Disability Plan, 326 F3d 914, 919 (7th Cit. 2003) (Hawkins)."

"CONCLUSION
For the foregoing reasons, Plaintiffs Motion for Summary Judgment is granted; and Defendant's Motion for Summary Judgment is denied."

 

 


 

 

 

VELTRI v. BUILDING SERVICE 32B-J PENSION FUND

(2nd Cir. 12/27/2004)

"In light of the regulation and Congress’s express policy, we hold that failure to comply with the regulatory obligation to disclose the existence of a cause of action to the plan participant whose benefits have been denied is the type of concealment that entitles plaintiff to equitable tolling of the statute of limitations."

 

 

 


 

 

RenCare Ltd vs. Humana Health Pln TX

(5th Cir. 12/30/2004)

 

"RenCare appeals the district court’s dismissal of RenCare’s claims for failure to exhaust administrative remedies and the district court’s partial denial of RenCare’s motion to remand its claims to state court. Because RenCare’s claims against Humana are not inextricably intertwined with a claim for Medicare benefits and because there are, in fact, no administrative appeal procedures for RenCare to pursue, we reverse both the district court’s dismissal of RenCare’s claims and the district court’s partial denial of RenCare’s motion to remand its claims to state court."

 

"III. CONCLUSION

Because there are no administrative remedies for RenCare to exhaust and because RenCare’s claims do not arise under the Medicare Act, we REVERSE the district court’s dismissal of RenCare’s claims and its partial denial of RenCare’s motion to remand its claims to state court."

 

Medicare Act Did Not Preempt Provider's State Law Claims Against HMO: Fifth Circuit (Spencer Benefits Reports)

Excerpt: "The Medicare Act did not preempt a health care provider's state law claims against an HMO seeking reimbursement for kidney dialysis services provided to Medicare beneficiaries. This was the ruling of the Fifth Circuit U.S. Court of Appeals in RenCare, Ltd. v. Humana Health Plan of Texas, Inc. (No. 04-50087)."

 

 


 

 

Chao v Crouse
    Cause No. 1:03-cv-1585-TAB-DFH 

11/22/04

 

Court Rules Indiana Marketing Firm and Executives Must Restore Losses to Health Plan

(DOL Media Release, 01/05/2005)

 

Pair accused in insurance scam ordered to pay (dailysouthtown.com)

"A Daily Southtown investigation found that Zanfei lived a comfortable life for years as thousands of TRG plan members struggled to pay medical bills that TRG defaulted on because it was out of money. An audit said unpaid claims could total $17.5 million."


 

 

PPO Fee Splitting

Vince Street Clinic v. Healthlink, Inc. No. 4-03-0876, (The Illinois Appellate Court, 4th District,)

"This case presents the question whether a company that creates a list of health-care providers that it makes available for a charge to members of health plans may enter into an agreement under which the health-care providers themselves would pay to be included on the list. We conclude the agreement improperly requires physicians to pay a fee for the referral of patients."

 

 

 

 

 

 

 


 

JOSEPH B. GORINI v. AMP, Incorporated,
or its Successor In Interest
TYCO ELECTRONICS, INC. Tyco Electronics, Inc.

3rd Cir. 12/08/2004

 

"RENDELL, Circuit Judge.

 

Tyco Electronics Corporation (“Tyco”) appeals from the final order of the District Court granting Joseph Gorini $78,934.10 in attorney’s fees and $5,909.88 in costs.1 Tyco contends the District Court erred in awarding Gorini attorney’s fees for duplicative work performed by multiple attorneys and for time spent on claims that ultimately were not successful. Tyco also asserts that the District Court erred in awarding costs for unauthorized items and items Gorini failed to demonstrate were necessary. We affirm because we conclude that the District Court did not abuse its discretion in determining as reasonable an award of attorney’s fees and costs."

 

"......Altogether, Gorini was awarded $162,743.25 in damages – $1,784.77 of which was deemed to constitute back pay, $178.48 deemed wages or vacation pay, and the remainder penalties for the ERISA violations awarded on summary judgment. Tyco was awarded $19,355 as reimbursement for duplicate severance pay. We affirmed the judgment of the District Court, see Gorini v. AMP Inc., 94 Fed. Appx. 913 (3d Cir. 2004), and later denied a petition for rehearing en banc."

================================================

 

 

 

Gorini v. AMP Incorporated(pdf)

 2004 U.S. App. LEXIS 7460 (3d Cir. 2004)

 

$160,000 Statutory Penalty for Failure to Provide SPD and Plan Document, Even No Benefits Available

Excerpt: "When considering whether to impose such penalties, the court can consider (1) bad faith or intentional conduct of the plan administrator, (2) length of delay, (3) number of requests made, (4) documents withheld, and (5) prejudice to the participant. Romero v. Smith Kline Beecham, 309 F.3d 113, 120 (3d Cir. 2002) (citations omitted). Here, the district court found that Tyco’s failure evinced a pattern of “conscious choices to decline to disclose” and “recalcitrance”4 in providing documents Gorini was entitled to under ERISA. JA 30-31. Although the court did not literally use the words “bad faith,” given the analysis of Tyco’s conduct, it is difficult to reach any conclusion other than that Tyco did act in bad faith."

================================================

Failure to Provide Plan Documents Resulted in Statutory Penalties of $160,000 (Employee Benefits Institute of America Inc. (EBIA))

 

Excerpt: "Although the trial court determined that the employee was not entitled to severance benefits, it assessed a penalty against the employer in the amount of $160,780 for the employer's failure to provide the requested documents. The employer appealed the penalty assessment, arguing that ... the employee was not a plan participant and consequently was not entitled to penalties under ERISA Section 502(c) ..."
 

=============================================

 

Nixon Peabody's August 2004 Benefits Briefs: Legal Developments for Employee Benefits (PDF) (Nixon Peabody LLP)

 

6 pages. Articles include: Getting burned by ignoring people with 'colorable' claims to plan participation; Court holds that ERISA forbids a plan from recouping excess benefit payments in court; Anti-cutback rule KOs suspension of benefits amendment.

 

 

 


 

 

Kress v. Food Employers Labor Relations Assn

 

4th Cir, 12/10/2004

 

OPINION

 

"WILKINSON, Circuit Judge:

Paul Kress, a participant in his employer’s welfare benefit plan, was injured by a third party in an automobile accident away from work. Under such circumstances, the plan will advance participants accident-related expenses. The Summary Plan Description emphasizes that such payments are in the nature of a "service" to the plan’s members, because "[r]ecovery from a third party can take a long time."


In order to receive the advance, participants and their attorneys must execute a subrogation agreement to reimburse the plan "before all others" from any third-party recovery. Kress’s attorney refused to sign the agreement. After the 180 day time limit expired, the claim for the advance was denied. Kress brought suit, alleging that denying benefits because of the attorney’s refusal to sign was wrongful under ERISA, 29 U.S.C. § 1001 et seq. The district court granted summary judgment to the plan. Because the SPD was clear and in no way violated ERISA, we affirm."

 

 


 

 

Callery v. U.S. Life Insurance Co. In the City of New York

(10th Cir.  12/10/2004)

FOR THE DISTRICT OF UTAH

(D.C. No. 02-CV-524-C)

------------------------------------------------------------------------------
Brian S. King, Salt Lake City, Utah, for Plaintiff - Appellant.

W. Mark Gavre, Parsons, Behle & Latimer, Salt Lake City, Utah, for Defendants - Appellees.

Karen L. Handorf, Deputy Associate Solicitor, (and Elizabeth Hopkins, Counsel for Appellate and Special Litigation Plans Benefits Security Division, with her on the brief, Howard M. Radzely, Acting Solicitor of Labor, Timothy D. Hauser, Associate Solicitor, and Adrienne K. Dwyer, Trial Attorney, Plan Benefits Security Division, on the brief), Office of the Solicitor, Plans Benefits Security Division, Washington, D.C., for Amicus Curiae.

Mary Ellen Signorille, (and Melvin R. Radowitz, on the brief), AARP Foundation, Washington, D.C., for Amicus Curiae AARP.

 

"Though the issue is close, we must adhere to the Supreme Court's rather emphatic guidance and therefore conclude that in a suit by a beneficiary against a fiduciary, the beneficiary may not be awarded compensatory damages as "appropriate equitable relief" under § 502(a)(3) of ERISA."

 


 

Chao v. Crouse

(11/22/2004, S.D. Ind. 2004)

 

MEWA Sponsor and Individual Corporate Officers Liable for Plan Losses and Outstanding Claims and Breach of Fiduciary Duty

"Secretary of Labor Elaine L. Chao (the “Secretary”) seeks to hold Defendants William Paul Crouse and Carmelo Zanfei, as well as their wholly-owned companies TRG Marketing, LLC and TRG Administration, LLC (collectively, “TRG”), responsible for various alleged breaches of fiduciary duty under Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) arising from their management of the TRG Health Plan (“the plan”). Although Crouse and Zanfei dispute their fiduciary status under ERISA, they “accept full responsibilities [sic] for their actions and fully agree to a court order directing the defendant’s [sic] to resolve all outstanding claims.”

 

 

 


 

 

 

Krodel v. Bayer Corporation

(11/19/2004, D. Mass.)

 

Self-Insured Employer Simply Rubber Stamped the Decision of CIGNA and Violated New ERISA Claim Regulations

 

Bayer’s Denial of Dr. Krodel’s Claim

 

"1. Bayer violated ERISA by failing to "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. §1133(2); 29 C.F.R. § 2560.503-1(h)(1). Under that provision, a plan administrator is required to provide a review that "does not afford deference to the initial adverse benefit determination".29 C.F.R. § 2560.503-1(h)(3)(ii)."

 

"2. Bayer also violated 29 C.F.R. § 2560.503-1(h)(3)(iii) which provides that:

In deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other item is . . . medically necessary or appropriate, the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved the medical judgment. Id. § 2560.503-1(h)(3)(iii) (emphasis added).

As far as the record shows, Defendants failed to seek any medical advice in making their determination with respect to Dr. Krodel’s claim. Thus, a clear violation of the regulation occurred.

 

"3. Upon notifying Dr. Krodel of the denial of his claim, Bayer violated 29 C.F.R. § 2560.503-1(g)(1)(v)(A) which provides that, if a specific internal rule is relied on in making a determination, that rule must be provided or a statement made that it will be made available to the claimant free of charge. Id. § 2560.503-1(g)(1)(v)(A)."

 

"4. Bayer also violated 29 C.F.R. § 2560.503-1(g)(1)(v)(B), which states that:

If the adverse benefit determination is based on a medical necessity . . . either an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request [will be provided to the claimant]. Id. § 2560.503-1(g)(1)(v)(B).

 

"5. Finally, Bayer violated its own internal rule by failing to inform Dr. Krodel that he might qualify for a different prosthesis."

 

"Second, Plaintiff contends that he is entitled to statutory penalties of approximately $40,000 (i.e. up to $100 per day for 400 days) based upon Defendants’ alleged failure to provide information to Dr. Krodel as required by ERISA. See 29 U.S.C. §1132(c). Specifically, Dr. Krodel alleges that the non-provision of the SOP constituted such a failure. His argument has merit because the SOP contained the underlying basis for his exclusion from coverage."

 

 


 

 

Stup v. UNUM Life Insurance

(4th Cir. 12/01/2004

 

"OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

 

UNUM Life Insurance Company of America appeals from the order of the district court granting Wanda Stup summary judgment on her claim that UNUM improperly denied her long-term disability benefits in violation of the Employee Retirement Income Security Act of 1974 (ERISA). UNUM does not dispute that Stup suffers from lupus, fibromyalgia, and other afflictions. Rather, UNUM argues that it acted reasonably in determining that, despite these disabilities, Stup

could perform a job commensurate with her training and, therefore, was not entitled to long-term disability benefits under the ERISA plan. The district court rejected this argument and concluded that UNUM abused its discretion in denying Stup long-term benefits. For the reasons that follow, we affirm."

 


 

 

Lopez vs. Premium Auto

5th Cir. 11/02/2004

 

"Plaintiff ...appeals the limitations based summary judgment in favor of defendant-appellee Premium Auto Acceptance Corporation (Premium) on her claims under the Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. § 1001 et seq., and the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986. We affirm.

......It remains for us to determine to what a claim under section 1166 is most closely analogous. The only published decision within the Fifth Circuit to address this issue concluded that section 1166 was subject to a two-year statute of limitations."

 


 

McCoy v. Meridian Auto Sys

(6th Cir. 11/19/2004)

 

Federal Appeals Court Issues Injunction Prohibiting Employer From Ending Retiree Health Care Benefits

_________________
OPINION
_________________


"SUTTON, Circuit Judge. Meridian Automotive Systems and Meridian Automotive Systems-Composite Operations (collectively “Meridian”) challenge the district court’s preliminary injunction restraining Meridian from terminating the medical benefits of retirees of an automotive-parts plant in Centralia, Illinois, as well as the benefits of their spouses (collectively “retirees”). Because no one disputes the potential for serious irreparable harm in the absence of a preliminary injunction and because we agree that the retirees have established a likelihood of success on the merits of their claim, we affirm."

 


 

LOCHER v. UNUM LIFE INSURANCE COMPANY

(2nd Cir. 11/12/2004)

 

"STRAUB, Circuit Judge:


Defendant-Appellant, UNUM Life Insurance Company of America, appeals from a judgment of the United States District Court for the Southern District of New York (Laura Taylor Swain, Judge) entered November 14, 2003, finding, after a three-day bench trial, that Plaintiff-Appellee Marianne Locher was entitled to disability benefits under a long-term disability plan provided by her employer through an insurance policy issued by Defendant-Appellant, and awarding benefits and attorneys’ fees and costs. Defendant-Appellant argues that the District Court erred in considering evidence outside the administrative record, finding Plaintiff-Appellee eligible for disability benefits, awarding benefits through the date of judgment, and awarding attorneys’ fees. We affirm the judgment of the District Court and write to clarify the standard to be applied by district courts in determining whether to consider evidence outside the administrative record upon a de novo review of factual issues bearing on an administrator’s denial of ERISA benefits."

 

 


 

Hawaiian Court Reverses Lower Court Ruling on ERISA Preemption of State Law on External Review

(The Supreme Court of the State of Hawaii)

Excerpt: "The Hawaiian Supreme Court ruled November 18, 2004, that a state law that gives Hawaii's insurance commissioner authority to conduct external reviews of health insurance plan decisions is 'impliedly' preempted by the Employee Retirement Income Security Act (ERISA)."

 

 


 

INSURANCE COMMISSIONER JOHN GARAMENDI SUES BROKER AND 4 MAJOR INSURERS OVER SECRET COMMISSIONS AND KICKBACK SCHEMES THAT NETTED “MILLIONS OF DOLLARS”

 

The Complaint and a copy of the settlement agreement can be accessed by clicking the links.

 

 


 

 

UnumProvident Settles Lawsuits for $127 Million: Will Reassess Claims of Those Denied Benefits
(The Chattanoogan.com)

 

 

 


 

 

 

Depenbrock v. Cigna Corp

 

"ROSENN, Circuit Judge.

 

This case is a by-product of corporate America’s recent effort to curb costs by, inter alia, scaling back the benefits provided under pension plans. John Depenbrock (“Depenbrock”) claims that his employer, CIGNA Corporation (“CIGNA”), violated the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., by denying him benefits without the required notice and lawful amendment to the pension plan. Depenbrock also alleges that CIGNA violated ERISA by failing to provide him an opportunity to review pertinent documents relating to his denial of benefits claim, and by breaching the fiduciary duty owed as plan administrator.

 

The District Court granted CIGNA’s motion for summary judgment and denied Depenbrock’s cross motions. We reverse the summary judgment in favor of CIGNA and remand with directions to enter summary judgment for Depenbrock."

 

ERISA Plaintiff Awarded $240,000 in Legal Fees (law.com)

"A federal judge has awarded more than $240,000 in attorney fees to a pair of lawyers whose $800,000 victory for their sole client in a pension benefits dispute with CIGNA Corp. directly led to increased benefits for another 178 workers."

 


 

 

 

Leonard J. Klay v. All Defendants

11th Cir. 11-05-2004

 

(All Physicians v. All Insurance Co.
& Managed Care in National Class Action Lawsuit)

 

 

Another Major Victory for Physicians

 

"This appeal requires us to determine the propriety of a district court order in light of prior appeals and the scope to be afforded to broad arbitration clauses. Based on our previous rulings and existing precedent, the district court refused to compel arbitration of various claims asserted by plaintiffs-appellees and declined to stay litigation of nonarbitrable claims. Because we previously affirmed the district court’s refusal to compel arbitration of RICO conspiracy and aiding and abetting claims in a decision not disturbed by the United States Supreme Court, the law of the case doctrine compels us to affirm the district court’s order regarding these claims. With respect to the scope to be given to broad arbitration clauses, matter not decided previously, we also affirm the district court’s ruling that broad arbitration clauses cannot be extended to compel parties to arbitrate disputes they have not agreed to arbitrate."

 

 

 

 


 

 

 

Gaither v. Aetna Life Insurance Co.

10th Cir. ,11/03/2004

 

"In the summer of 1999, Donald B. Gaither was suspended from employment because his employer determined that his medical condition--his use of narcotic painkillers--made him unable to perform his job. At the same time, his employer's ERISA plan administrator denied him disability benefits because his medical condition did not make him unable to perform his job. The plan administrator defends on the essential ground that it did not know, and was under no obligation to find out, why Mr. Gaither lost his job."

 

"The Plan Administrator (or such other party to whom duties of administration have been delegated, including without limitation, an Administrative Services Provider) shall perform its duties of administration as it determines in its sole discretion . . . . In particular, the interpretation of all Plan provisions, and the determination of whether an Employee is entitled to any benefit pursuant to the terms of the Plan, shall be exercised by the Plan Administrator (or other party referred to above) in its sole discretion."

 

"Aetna's position seems to be that as a plan fiduciary, it plays a role like that of a judge in a purely adversarial proceeding, where the parties bear almost all of the responsibility for compiling the record, and the judge bears little or no responsibility to seek clarification when the evidence suggests the possibility of a legitimate claim. The authority just cited suggests that Aetna has the wrong model. Indeed, one purpose of ERISA was "to provide a nonadversarial method of claims settlement." Sandoval, 967 F.2d at 382. In Gilbertson v. Allied Signal, Inc., we explained what this nonadversarial process should look like:

 

[ERISA and its implementing regulations require] a meaningful dialogue between ERISA plan administrators and their beneficiaries. If benefits are denied . . . the reason for the denial must be stated in reasonably clear language, . . . [and] if the plan administrators believe that more information is needed to make a reasoned decision, they must ask for it. There is nothing extraordinary about this: it's how civilized people communicate with each other regarding important matters."

 

"CONCLUSION

For the foregoing reasons, we REVERSE the district court's finding that Aetna's decision was not arbitrary and capricious, and REMAND the case for further consideration consistent with this opinion."

 


 

 

 

PASCACK VALLEY HOSPITAL, INC. v  LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN

(3rd Cir. 11/01/2004)

 

ERISA Does Not Pre-empt Hospital's PPO Discount Lawsuit

 

Excerpt: "The Supreme Court has recently clarified the inquiry in such cases:

 

It follows that if an individual brings suit complaining of a denial of coverage for medical  care, where the individual is entitled to such coverage only because of the terms of an ERISA - regulated employee benefit plan, and where no legal duty (state or federal)  independent of ERISA or the plan terms is violated, then the suit falls within the scope of ERISA §502(a)(1)(B). In other words, if an individual, at some point in time, could have brought his claim under ERISA §502(a)(1)(B), and where there is no other independent legal duty that is implicated by a defendant’s actions, then the individual’s cause of action is completely pre-empted by ERISA § 502(a)(1)(B)." (page 7)

 

"Coverage and eligibility, however, are not in dispute. Instead, the resolution of this lawsuit requires interpretation of the Subscriber Agreement, not the Plan." (page 10)

 

"The Ninth Circuit held that “the Providers’ claims, which arise from the terms of their provider agreements and could not be asserted by their patient assignors, are not claims for benefits under the terms of ERISA plans, and hence do not fall within § 502(a)(1)(B).” Id. at 1050. The court explained:


[T] he Providers are asserting contractual breaches . . . that their patient-assignors could not assert: the patients simply are not parties to the provider agreements between the Providers and Blue Cross. The dispute here is not over the right to payment, which might be said to depend on the patients’ assignments to the Providers, but the amount, or level, of payment, which depends on the terms of the provider agreements. Id. at 1051 (first emphasis added). 


Because the Providers asserted “state law claims arising out of separate agreements for the provision of goods and  services,” the court found “no basis to conclude that the mere fact of assignment converts the Providers’ claims into claims to recover benefits under the terms of an ERISA plan.” Id. at 1052.9" (page 11)

 

"Accordingly, removal in this case was improper, and the order of the District Court denying remand will be vacated. We will remand this case to the District Court with instructions that the District Court, in turn, remand to the Superior Court of New Jersey."

ERISAclaim.com Comments:

  1. ERISA does not preempt pure provider (PPO/HMO) contract dispute in state court.  This ruling is significant with profound impact in today's managed-care market, as provider contract disputes are as popular as ERISA benefits dispute but unsuccessfully pursued by providers due to ERISA preemption;
  2. Following the 11th Circuit Court ruling, Leonard J. Klay v. Humana, on national class actions by 950,000 physicians, that provider’s class-action all RICO-related claims don not have to be arbitrated, claims over provider contract dispute was improperly certified as a national class and such claims shall be tried in each state jurisdiction, more state lawsuits are expected to explode over provider’s claim over state RICO claims, claims over PPO discount, bundling and down coding and prompt pay violation arising out of PPO contract instead of ERISA plan provisions;
  3. This case is only limited to PPO discount dispute with a signatory party of subscriber agreement which happens to be the plan as well, where there is no coverage and eligibility dispute, ERISA is moot, or there is no denial from ERISA plan, and in absent of PPO discount, the claimant will be entitled to 100% reimbursement;
  4. It is very important to understand the difference of ERISA and PPO, if ERISA benefits are in dispute or not moot, taking this approach of state court lawsuit for medical claims is still a claims suicide practice.

 

 


 

 

FELIX v. LUCENT TECHNOLOGIES

[10th Cir., 10/26]

 

 

 


 

 

JO ORTLIEB v UNITED HEALTHCARE

8th Cir., 10/28

 

"....Thereafter, Ortlieb contested the denial of coverage by filing her case in the district court. The district court reviewed the benefit determination using an arbitrary and capricious standard of review. In opposing United HealthCare’s motion for summary judgment, Ortlieb submitted four technical documents discussing TPN, none of which were included in the administrative record. The district court declined to consider the new evidence. Based on the administrative record, the district court determined United HealthCare reasonably relied on the assessments of multiple doctors that TPN was an unproven therapy for Ortlieb’s medical conditions. The district court rejected Ortlieb’s argument that United HealthCare had failed to consider the “life-threatening condition” exception to the unproven service exclusion. The court granted summary judgment in favor of United HealthCare. Ortlieb now appeals......"

 

ERISAclaim.com Comment:         "No Appeals, No Science"

 

If healthcare providers didn't appeal under ERISA in a timely fasion, the federal court may not consider these new evidence at trial, even they could truly scientifically persvasive, as they are not considered as these new scientic eveidence are not part of administrative records the court will exam under ERISA.

 

Timely ERISA appeal is more important than "true science" under ERISA, as federal law and rules are also important things to follow.

 

This will help all of us here in recent denials crisis.

 


 

Baker v. Tomkins Industries Inc.,
D. Kan., No. 03-2434-KHV

 

20 pages. US District Judge Kathryn Vratil overturned the decision to deny coverage to the plaintiff for a cochlear implant after losing her hearing. Judge Vratil said the denial was 'arbitrary and capricious.' Vratil also ruled that the coverage denial notices the plaintiff received from the health insurance plan didn't meet the requirements of the Employee Retirement Income Security Act.

 

 

 


 

 

 Tythcott V. Aetna Life Insurance Co. (PDF)

(United States District Court, District of Connecticut)

(Aetna Cannot Be Sued Under ERISA for Denying Benefits)

11 pages. Aetna Life Insurance cannot be sued under ERISA because it is a third-party administrator. District Court of Connecticut ruled after considering the employer's plan documents: the master plan documents, the administrative services contract (SAO agreement), and the summary plan description (SPD) -- that Aetna was not a fiduciary or "a designated plan administrator" under ERISA.

 

Excerpt: "As evidence of the intent of the contract, defendant points to the Administrative Services Contract between defendant and Cooper Industries, which states, in relevant part:

Aetna in performing its obligations under this Contract is acting only as agent for the Contractholder [CooperIndustries] and the rights and responsibilities of the parties shall be determined in accordance with the law of agency except as otherwise provided. The Contractholder hereby delegates to Aetna authority to make determinations on behalf of the Contractholder with respect to benefits, subject, however, to a right of the Contractholder to review and modify any such determination. For the purposes of the Federal "Employee Retirement Income Security Act of 1974" and any applicablestate legislation of similar nature, the Contractholder shall, however, be deemed the administrator of the Plan.

The service contract clarifies the ambiguity present in the summary plan description relative to Aetna’s role. The service contract coupled with the plan documents evidence that Aetna was not intended to serve as a designated plan administrator for purposes of ERISA.

 

Further, both summary plan description and the service contract

provides for Aetna’s discretion to be curtailed by review and modification by Cooper Industries, which provisions are fatal to plaintiff’s argument that Aetna controlled the distribution of funds and benefit decisions. Accordingly, this case does not involve a factual dispute concerning which entity actually controls the distribution of funds and benefit decisions. See Am. Medical Ass’n v. United Healthcare Corp., 2003WL348963 (S.D.N.Y. 2003)(denying motion to dismiss against insurance companies where a factual dispute existed as to which entities were the plan administrators and whether any of the insurance companies controlled the distribution of funds and decided whether or not to grant benefits).

 

ERISAclaim.com Comment:

  1. Summary Plan Description (Is) Ambiguous;
  2. TPA Administrative Serves Only (ASO) Disclaims (Liability);
  3. Patient (People) Suffers;

  4. Whole country, No one cares; (McDougall vs Pelchart, et al (Aetna, UPS)

  5. SPD laws, legal logics helps? (who is the plan administrator?)

  6. Nothing matters (Aetna Health Inc. v. Davila)

  7. Solutions with "Aetna Fiduciary Options"

 


 

 

GUALANDI v. ADAMS

2nd Cir., 10/01/2004

 

A public school plan is not subject to ERISA.

 

 


 

 

PROVIDENCE HEALTH V MCDOWELL

9th Cir. 10/01/2004

 

"Overpayment" Recovery, ERISA Ordeal

"These appeals concern two actions by Providence Health Plan to recover benefits paid to its insureds, the McDowells. The first action, “McDowell I,” was for breach of contract and was filed in state court. McDowell I was removed to federal court and dismissed as completely preempted under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq. The second action, “McDowell II,” was filed in federal court as an action for equitable relief under ERISA’s civil enforcement provision, 29 U.S.C. § 1132(a). This action was also dismissed after the district court determined that Providence failed to state a claim under § 1132(a).

 

For the following reasons, we reverse the dismissal of McDowell I, but affirm as to McDowell II."

 

 


 

Mortgage Lenders Network USA, Inc. v. CoreSource, Inc.

 

ERISA, TPA, ASO, Fiduciary

Who & Where to Sue in Managed Care Dispute?

 

"The Department of Labor offers as an example the circumstances in which a "benefit supervisor" may be deemed to perform discretionary functions as opposed to "purely ministerial" ones. According to the regulation, if the plan designates as a "‘benefit supervisor’ a plan employee who has the final authority to authorize or disallow benefit payments in cases where a dispute exists as to the interpretation of plan provisions relating to eligibility for benefits," then "the benefit supervisor would be a fiduciary within the meaning of section 3(21)(A) of the Act." Id. at ¶ D-3. It is clear from the regulation that a benefit determination based on no more than application of a mathematical formula in accordance with the Plan rules is a ministerial, rather than a discretionary act, even if it is the final decision on the claim. See id. It is similarly clear that a benefit determination that requires interpretation of plan provisions is a discretionary, not ministerial, act if it is the final decision on a disputed claim rather than a mere recommendation." (page 14)

 

 


 

 

 

Jones v. Metro Life, GM, et al
6th Cir. 09/29/2004

"Discretion to interpret a plan, however, does not include the authority to add eligibility requirements to the plan. See Univ. Hosps. of Cleveland, 202 F.3d at 849-50.(5) We conclude that MetLife acted arbitrarily and capriciously when it interpreted the term “accident” in a manner that adds requirements not found in the Plan documents or supported by federal common law.

The Plan documents do not define the term “accident.” Specifically, the Plan documents do not require that an insured be engaged in “unusual activity” or meet with an “external force or event” in order for her injury to be considered an accident. MetLife could have expressly included such a requirement. Indeed, many of the insurance policies discussed in the cases cited by the parties did contain such a requirement. Because the policy at issue in this case did not include an “unusual activity” or “external force or event” requirement, MetLife attempts to rely upon federal common law to supply this requirement......

 

In this case, MetLife added an eligibility requirement under the guise of interpreting the term “accident” that does not exist in either the Plan documents or federal common law; therefore, MetLife’s interpretation of the Plan is arbitrary and capricious. When denying Jones’s claim for PAI benefits, MetLife applied an arbitrary-and-capricious definition of the term “accident.” Moreover, in its May 7, 2001 denial of Jones’s request for administrative review, MetLife indicated that it had not determined whether Jones was totally and permanently disabled. Because application of the correct definition of accident and the ultimate resolution of Jones’s claim requires additional findings of fact, we will remand this case to MetLife. Compare Univ. Hosps., 202 F.3d at 852, with Williams v. Int’l Paper Co., 227 F.3d 706, 715-16 (6th Cir. 2000)."

 

 


 

State of Connecticut v. Health Net, Inc.,

11th Cir. 09/10/2004

 

State Can NOT Enforce ERISA, Publicly or Privately

 

 

Appeal from the United States District Court

for the Southern District of Florida

________________________

(September 10, 2004)

"This appeal presents an issue of first impression in this Circuit: whether a state, after obtaining assignments from some of its citizens for claims that those citizens have under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (ERISA), has standing to assert those claims on behalf of its citizens in federal court. We conclude that Appellant, the State of Connecticut (“Connecticut”), in its capacity as assignee, has failed to demonstrate that it has suffered or will suffer an actual or imminent invasion of a legally protected interest that is concrete and particularized. Therefore, Connecticut does not have standing to pursue its claims, as an assignee, under Article III of the United States Constitution. We also hold that Connecticut does not have statutory standing under ERISA to pursue the claims of its citizens in its capacity as parens patriae. Accordingly, we affirm the judgment of the district court dismissing Connecticut’s Complaint."

ERISAclaim.com Comment:

State Can NOT Enforce ERISA, Publicly through regulation or Privately through assignment.

 

The State of Connecticut has tried very aggressively, in the patient rights campaign in past 10 years, to regulate managed care problems, with fatal obstacle of ERISA preemption, because most Americans obtained health insurance through employment in employer-sponsored health plans, either self-insured or fully-insured, governed under ERISA.

 

The State of Connecticut has tried, as the first State and the only one so far, the ERISA assignment practice to secure legal standing in federal court in order to enforce ERISA indirectly as private assignee or constitutional challenge to heal ERISA problems in managed care crisis, once again such effort has failed from this ruling.

 

For legislators, regulators, patient rights advocates, health care providers and industry experts, this case has taught all of us another lesson that ERISA regulation has to be enforced by federal government, Department Of Labor (DOL), interpreted and adjudicated in federal court. Entire country must get educated on ERISA clam regulation, especially for health care providers, American workers and state regulators.

 

If we ignore these hard lessons, from recent Supreme Court ruling in Aetna v Davila and this case, and continue to fantasize ourselves with state regulations on ERISA governed managed care problems and health care crisis, we will destroy our health-care system in this country.

 


 

 

 

CARPENTERS HEALTH V VONDERHARR

9th Cir. 09/15/2004

 

Personal Injury, ERISA Subrogation/Reimbursement/Pre-emption

 

"In sum, neither Harris Trust nor Great-West Life overruled our circuit precedent. Indeed, Great-West Life was a case affirming our circuit and referenced one of the cases that the Trust claims it overruled.

 

[4] The actions asserted by the Trust are nothing more than garden-variety legal claims for contractual restitution that are not cognizable under ERISA. Thus, the district court was entirely correct in its dismissal of the Trust’s ERISA claims."

ERISAclaim.com Comment:

Different rulings have be made by different appeals court in federal level, and then federal or state jurisdiction will continue to confuse every one. Supreme court has declined to hear this issue from 7th Cir. since Great-West Life.

 

This confusion will greatly impact current "over-payment" recoupment practice by the industry.

 

Wal-mart Benefits Committee will have to play by 7th & 9th Cir. rules.

 

 


 

 

 

Kosiba v. Merck & Co Inc

3rd Cir. 09/13/2004

 

"However, there is evidence of procedural bias in Merck’s intervention in the appeals process to request an independent medical exam. This is especially problematic because the record before the defendants prior to Dr. Dev’s examination provided reasonably sound as well as unequivocal support for Epps-Malloy’s claim for benefits; the choice to request a third medical opinion therefore strongly suggests a desire to generate evidence to counter Epps-Malloy’s physicians’ diagnoses. Because Merck’s intervention, notwithstanding its delegation of claims administration to a large and experienced carrier, undermines the defendants’ claim to the deference normally accorded an ERISA plan fiduciary with discretionary authority, we conclude that the District Court should have applied a moderately heightened arbitrary and capricious standard of review. Additionally, with respect to the merits, the District Court failed to address Epps-M alloy’s fibromyalgia diagnosis, an omission which itself alone would require a new trial. For these reasons, we will reverse the judgment of the District Court and remand for a new trial."

 

 


 

 


Post Supreme Court Davila Scoop:

ERISA Pre-emption of State Laws in Healthcare

 

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."

 

 

 


 

 

 

 

Leonard J. Klay v. Humana

 

"A Major Court Victory for All Physicans"

 

Appeal from the United States District Court
for the Southern District of Florida
_____________________
(September 1, 2004)

 

"This is a case of almost all doctors versus almost all major health maintenance organizations (HMOs), coming before us for the third time in as many years; there have been twenty-one published orders and opinions in this case from various federal courts. The plaintiffs are a putative class of all doctors who submitted at least one claim to any of the defendant HMOs between 1990 and 2002. They allege that the defendants conspired with each other to program their computer systems to systematically underpay physicians for their services. We affirm the district court’s certification of the plaintiffs’ federal claims, though we strongly urge the district court to revisit the definition of these classes, and reverse the district court’s certification of the plaintiffs’ state claims. We do not reach the district court’s certification of a California Subclass since the defendants did not specifically challenge the certification on appeal....."

 

"We have nothing but the defendants’ conclusory, self-serving speculations to support their claim that this trial could devastate the managed care industry. “Because considering the financial impact of a judgment presupposes success on the merits and requires the trial court to express an opinion on the harshness Vel non of a particular remedy prior to trial itself, it ought to be allowed only in extreme cases.” Roper, 578 F.2d at 1114. More importantly, however, if their fears are truly justified, the defendants can blame no one but themselves. It would be unjust to allow corporations to engage in rampant and systematic wrongdoing, and then allow them to avoid a class action because the consequences of being held accountable for their misdeeds would be financially ruinous. We are courts of justice, and can give the defendants only that which they deserve; if they wish special favors such as protection from high—though deserved—verdicts, they must turn to Congress."

 

V.

"For the reasons articulated above, we affirm the district court’s grants of class certification as to all RICO-related claims, though we urge it to reconsider the precise scope of the classes, and reverse the district court’s grant of class certification as to all state-law claims other than the claim based on California law. We do not disturb the district court’s certification of the California Subclass because the defendants did not specifically challenge that on appeal."

 

Given the number of parties involved in this case, it threatens to degenerate into a Hobbesian war of all against all. Nevertheless, we feel that the district court—a veritable Leviathan—will be able to prevent the parties from regressing to a state of nature. One can only hope that, on remand, the proceedings will be short, though preferably not nasty and brutish.

 

SO ORDERED."

ERISAclaim.com Comment on 09/01/2004:

 

  1. This federal 11th appeals court ruling is a major court victory for class action lawsuits for "almost all doctors versus almost all major health maintenance organizations (HMOs)";

  2. This ruling may signal a great likelihood of quick settlements for all major insurance companies as Aetna and CIGNA reached with 950,000 physicians;

  3. This ruling has given a green light for new class actions filed against almost every Blue Cross Blue Shield Plans and intermediaries;

    1. Nearly Sixty Blue Cross/Blue Shield Affiliates throughout the Country Sued by Physicians (HMO Crisis Newsroom)

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

    3. Jun 18, 04 Plaintiffs' Second Amended Class Action Complaint
      Jun 28, 04  Solomon:  First Amended Complaint - Class Action

  4. It is critical to understand physicians' state claims (breach of contract, HMO/PPO payment or fraud) were decertified except for California, and benefits claims by patients were previously dismissed.  The physicians' medical claims class-action status has been decertified except for California, the remaining litigation is about physicians' RICO claims;

  5. Now it is more important to revisit Aetna and CIGNA settlement: Settlements = ERISA + 3 E. B.

  6. Intriguing consequences of this ruling for physicians' state claims is whether individual state class actions by physicians and their state associations may motion back to their original jurisdictions, as original class-action consolidation has been proven by this ruling impractical and inappropriate, this ruling does not decide merits of physicians' state claims, but consolidated venue from all 50 states into Miami Florida and physicians state claims were not dismissed with prejudice.

 


Class-Action Status Is Upheld for Doctors Suing Insurers (The New York Times)

"An appeals court upheld class-action status yesterday for a lawsuit brought on behalf of at least 600,000 doctors contending that six of the nation's largest health insurers regularly reduce payments for medical services."

Eleventh Circuit Court of Appeals Affirms Class Certification for RICO Lawsuit Filed by the Nation’s Doctors Against Leading HMOs (hmocrisis.com)

"Plaintiff’s Lead Counsel Archie Lamb: Largest Physician Led Class Certification in Federal Court History Has Now Been Affirmed

 

Wednesday September 1, 2004:  The Eleventh Circuit Court of Appeals issued a sweeping decision today affirming class action certification in the landmark RICO case filed to combat widespread and chronic abuses by some of the nation’s largest for profit HMOs." 

 


 

Sidebar - Humor

(Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

 

Federal Court Managed Care Secret

 

The Judge: Counselors, it's tough, too many class action lawsuits across the Country.

 

HMO Lawyer: Your honor, we specialize in managed care "Bundling & Down Coding" Practice.

 

The Judge: Consolidating and bundling all of the class-action lawsuits across the country and decertifying and down-coding all of them?

 

Drs.'s lawyer: But, your honor, that's racketeering practice?

 

The Judge: Alright, I will allow RICO claims to go ahead, rest of them, dismissed.

 


 

 

 

THE PAUL REVERE LIFE INS. CO. v. DANIEL E. BROMBERG (1st Cir. 08/30/2004)

 

"We determined that ERISA was inapplicable to the individual policy because the employer's responsibility for administering and funding her coverage ended once its employee obtained the conversion policy."

 

 


 

 

BANUELOS V CONSTRUCTION LABOR

(9th Cir. 08/24/2004)

 

"ANALYSIS

A. Evidence Outside the Administrative Record

 

Banuelos argues that the district court’s decision to hear evidence of the Trust’s mistake at trial was erroneous because that evidence was not presented to the plan administrator. While the district court stated that its “review is generally limited to the administrative record,” it noted that “evidence outside the administrative record may be considered in limited circumstances.” The district court held that because it was hearing evidence to determine whether section 4.07(e) of the 1994 version of the plan actually was adopted, the general rule limiting its review to the administrative record did not apply. This was in error.

 

[6] Where, as here, an ERISA plan vests the administrator with discretionary authority to determine benefit eligibility, the district court reviews the administrator’s determinations for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). This court has clearly established that “the abuse of discretion standard permits the district court to ‘review only the evidence presented to the [plan] trustees.’ ” Taft v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1471 (9th Cir. 1993) (alteration in the original) (quoting Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480, 482 (9th Cir. 1990)). “[T]his conclusion is consistent with the nature of abuse of discretion review, furthers the goals of ERISA, and is in line with the decisions of nearly every other

circuit to consider the issue.” Id. 12075 BANUELOS v. CONSTRUCTION LABORERS’ TRUST FUNDS"

ERISAclaim.com Comment:

This case, in conjunction with recent 1st Circuit ruling in GLISTA v. UNUM LIFE INSURANCE [PDF] [WP] (1st Cir. 08/11/2004), demonstrated an important ERISA secret (compliance for winning) that the court shall not consider evidence not previously presented to the plan administrator or outside outside administrator records, and the court will not review the merits of reasons from the plan administrator not previously articulated or disclosed to the claimant at administrative appeals, especially when the plan has delegated discretionary authority to the plan administrator in order to gain advantages of abuse of discretion review standard.  Noncompliance and phantom reviews will backfire against the plan at judicial reviews.

 

 


 

 

Justofin v. Metro Life Ins Co

 

"IV. Conclusion

 

Contrary to the decision of the District Court, we conclude that the 1999 amendment to Loretta Justofin’s life insurance policy was not void as a matter of law, as it is for a jury to decide whether the misrepresentations in the application for the policy amendment were made knowingly or in bad faith and whether they were material. As to the other issues appealed: MetLife did not waive its right to contest the amended policy’s validity by failing to investigate Loretta’s statements pertaining to her arthritis; the District Court, while it may have good reasons to deny summarily the Justofins’ claim of bad faith against Metlife, needs to set out these reasons; the District Court did not abuse its discretion in granting MetLife’s motion to amend its pleadings to add a counterclaim; and, on remand, the District Court retains discretion to address the Justofins’ allegations of discovery abuse and motions for sanctions and additional discovery. In this context, we vacate the District Court’s grant of summary judgment and remand for further proceedings consistent with this opinion."

 

 

 


 

 

 

GLISTA v. UNUM LIFE INSURANCE [PDF] [WP]

(1st Cir. 08/11/2004)

 

"This case requires that we address for the first time two questions of general import: (a) the admissibility in ERISA cases of internal guidelines and training materials that interpret certain plan terms and are promulgated by the plan administrator; and (b) whether a plan administrator may defend a denial of benefits on the basis of a different reason than that articulated to the claimant during the internal review process.We decline to adopt hard-and-fast rules as to either question. We conclude that such internal documents are admissible under certain conditions, which are met here. We also conclude that where a plan administrator articulates in litigation an additional reason for denial of benefits that differs from the reasons articulated to the plaintiff, reviewing courts have a range of options available. Here, we decline to consider the merits of the reason not articulated to Glista. Considering only the reason articulated to Glista, we conclude that the denial of benefits was arbitrary and capricious."

 

"We reverse the grant of judgment in favor of Unum and hold that Glista is entitled to judgment. We remand with instructions that an order be entered requiring Unum to pay the benefits that Glista seeks, including all benefits past due, with any interest to which he may be entitled. Glista is awarded his costs."

ERISAclaim.com Comment:

This case ruling emphasized that the plan must disclose internal guidelines as "relevant document" under ERISA on internal appeal process, as clarified by new ERISA claim regulation, and any denial reasons or grounds not disclosed to the claimant on appeal process will not be considered by the court. This is also profound and significant for medical necessity determination, bundling and down coding, usual, customary and reasonable (UCR) fee dispute , pre-existing condition and urgent care  denials in managed-care crisis under ERISA.


 

EARNEST CLARDY V. ATS, INC.

 

 

"CONCLUSION


It is the opinion of this court that the Mississippi law requiring a Chancellor's approval before a parent may contract away a minor's legal rights is not preempted by ERISA in this case. As a consequence, the "reimbursement agreement" signed by Earnest and Nadine Clardy in this case is not enforceable against Kenneth Clardy in this case. The defendants' motion for partial summary judgment in this cause shall be denied."

 

 

 


 

 

Critchlow v. First Unum (2nd Cir.)

02-7585

 

Critchlow v. First Unum [Dissenting] (2nd Cir.)

02-7585

 

"On August 12, 2003, a divided panel of this Court, in an amended majority opinion by Judge Van Graafeiland, with B.D. Parker, J., concurring and Kearse, J., dissenting, concluded that the dismissal of the complaint should be affirmed. On August 27, 2003, a judge of this Court requested a poll to have the appeal reheard en banc. The mandate was issued inadvertently on August 28, 2003, and was recalled on June 21, 2004, in light of the pendency of the en banc poll. While the en banc poll was pending, Judge Parker reconsidered his earlier decision and voted to reverse the judgment. Therefore, with the issuance of the present opinion, the earlier decision in this case, reported at 340 F.3d 130 (2003), is vacated. For the reasons that follow, the judgment is reversed, and the matter is remanded for entry of judgment in favor of plaintiff."

 

"We conclude that the UNUM Policy provision excluding loss resulting from "intentionally self-inflicted injuries" does not unambiguously apply to a death resulting from autoerotic asphyxiation. And to the extent that that phrase, or the term "injuries" within it, is ambiguous, it must, in accordance with ERISA principles, be construed against UNUM. The district court should have rejected as a matter of law UNUM's contention that it properly denied plaintiff benefits on the basis of the exclusion for "intentionally self-inflicted injuries."

 

 

 


 

 

 

QualChoice Inc v. Rowland (6th Cir.)

Appeal from the United States District Court

for the Northern District of Ohio at Cleveland.

 

"This court has explicitly held that subrogation is not available in a situation such as this, when the plan participant or beneficiary has already recovered, because subrogation allows a plan fiduciary only to step into the shoes of a plan participant or beneficiary and assert the rights of the participant or beneficiary against another; subrogation does not allow a plan fiduciary to obtain a judgment of personal liability against a plan beneficiary or particpant. Mosser, 347 F.3d at 623-24; see also Dobbs at 588, 604. Therefore, QualChoice may have been able to use subrogation to step into the shoes of Rowland during the settlement negotiations with W & LE, but QualChoice may not now use the doctrine of subrogation to impose personal liability on Rowland.......

 

Applying the Supreme Court’s cases, we hold that a plan fiduciary’s action to enforce a plan-reimbursement provision is a legal action, regardless of whether the plan participant or beneficiary recovered from another entity and possesses that recovery in an identifiable fund."

 

 


 

Wiggin v. Bridgeport Hosp., Inc.,

ERISA preemption

 

"Plaintiffs’ counsel was given leave to amend, and, on August 6, 2002, filed an amended complaint alleging only four counts (fraudulent inducement, fraudulent misrepresentation, breach of fiduciary duty, and "common law") and principally seeking "medical and health insurance reimbursement for a medical condition which [plaintiffs were] told was covered under [plaintiffs’] health insurance coverage and other damages due [plaintiffs]." Nowhere in the amended complaint is there any mention of or reference to ERISA, any other statutory provision, or any federal cause of action."

 

"III. Conclusion

For the foregoing reasons, defendants’ motions to dismiss [Doc. ## 16 & 19] are GRANTED. The Clerk is directed to close this case."

 

 


 

 

 

Glynn v. Bankers Life and Casualty Co.

 

Motion to dismiss, ERISA preemption

 

 

 


 

 

Crawley v. Oxford Health Plans, Inc.,

 

Motion to remand, ERISA preemption

 

"Oxford has urged the application of ERISA to the facts of this case, because Crawley would not have been eligible for an individual policy with Oxford-NY without the conversion provision in his ERISA plan with his former employer. Oxford does not dispute, however, that Crawley was in fact eligible to convert to an individual policy. Since this conversion is now complete and the right to convert is not in question, these facts do not support application of ERISA."


 

 

 

Cole v. General Electric Co.

ERISA, failure to exhaust administrative remedies

 

"In sum, the Court finds that Cole failed to exhaust his administrative remedies on all of his claims – whether they were actually or constructively denied. Thus, GE is entitled to judgment on the entirety of Cole’s claims."

 

 


 

 

 

Smith v. Reliance Standard Life Insurance Company

06/16/04
 

"Accordingly, this Court accepts the opinion of Dr. Helffenstein, as it has no reason not to. In so doing, this Court is not stating that a plan or claim administrator is bound to provide an explanation of the reasons rejecting opinions of any physician, a requirement that might run afoul of the Supreme Court’s holding in Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 n. 4 (2003) (“we conclude that ERISA does not support judicial imposition of a treating physician rule, whether labeled “procedural” or “substantive.” ). Rather, this Court is applying the teaching of that case: “Plan administrators may not arbitrarily refuse to credit a claimant’s reliable evidence . . . .”
Nord, supra, 538 U.S. at 823."

 


 

 

Maximum Comfort, Inc v. Tommy G. Thompson

(06/30/2004, United States District Court for the Eastern District of California)

 "CONCLUSION



For the foregoing reasons, the court hereby ORDERS as

follows:

1. Plaintiff's motion for summary judgment and permanent injunction is GRANTED;

2. Defendant, and his agents, officers, employees, representatives, and all persons acting in concert or participating with him, are ENJOINED from recouping, offsetting or otherwise collecting from plaintiff any alleged overpayments for any of the beneficiaries which are the subject of this action from any amounts due and owing to plaintiff; and
......

IT IS SO ORDERED.

DATED: June 28, 2004."

ERISAclaim.com Comment:

This case ruling has profound impact on current "over-payment" refund and recouping practice in U.S. healthcare market. Please see more details at the conclusions of

 

 

 


 

 

Singh v. Prudential Health

(4th Cir., 07/03/2003)

"In sum, we conclude that Singh’s State common-law claims are claims for benefits due under the terms of an ERISA plan and are therefore "completely preempted," such that federal removal jurisdiction exists. In reaching the conclusion that Singh’s claims seek to enforce a term of the Prudential plan, we conclude that, although the Maryland HMO Act "relates" to an employee benefit plan, it is saved as a State regulation of insurance that does not conflict with § 502(a) of ERISA, such that it defines a term of the ERISA plan. Because Singh’s claims seek to enforce a term of the Prudential plan, as so modified by State law, they are within in the scope of § 502(a) and must be adjudicated as federal claims under that section. Finally, we conclude that any claimed relief that supplements, supplants, or conflicts with the remedies provided by § 502(a) must be rejected as preempted."

 

 


 

 

NW Memorial Hospital vs. Village of S Chicago Heights

 

 

 

 


 

 

Heffner vs. Delta Airlines Inc

 

"The Administrative Committee, appointed by the Board of Directors of Delta Airlines, is the Plan Administrator and performed the final review of Plaintiff's claim under the Plan. Plaintiff filed this action pursuant to the provisions of ERISA, 29 U.S.C. § 1131, et seq. seeking judicial review of the decision denying her long-term disability benefits.

Although, the parties appear to be at odds as to the timing and sequence of some of the facts alleged, the material facts generally are not in dispute. Plaintiff, who suffers back pain, applied for long-term disability benefits. Plaintiff's application for long-term disability benefits was denied by Aetna Life Insurance Company ("Aetna"), the Plan Administrator Designee, effective November 26, 1998. Plaintiff appealed the denial of benefits through the two levels of review available. The second level of review is by the Administrative Committee itself. The Administrative Committee concluded that as of November 26, 1998, Plaintiff was not physically disabled for purposes of the Plan...."
 


 

 

 

Knight vs. Amer Med Sec

 

 

"The court finds the case law holding that a conversion policy is not governed by ERISA to be persuasive and well reasoned. The court holds that the Knights' policy is not an employee welfare benefit plan subject to ERISA."

 

 


 

 

CAREFIRST BLUE CROSS BLUE SHIELD v. MERCK-MEDCO MANAGED CARE, LLP, PAID PRESCRIPTIONS, LLC, and NATIONAL RX, INC.
 

"Plaintiff then filed the present motion to remand on October 14, 2003, asserting that the defendants “have no valid basis for removing this action to federal court” because their claims are state law claims and are not subject to ERISA's complete preemption provision because defendants have long asserted that they are not ERISA fiduciaries and, therefore, cannot be charged with an ERISA fiduciary duty claim. (Pl. Br. at 4-6.)
    The Court heard oral argument on November 13, 2003 and defendants reinforced their long-standing position that they are not ERISA fiduciaries. They assert, though, that the claims against them are still completely preempted by ERISA because plaintiff has included allegations which, if true, would classify them as performing the functions of ERISA fiduciaries.

.....

 

III.    CONCLUSION
    
For the foregoing reasons, this Court finds that defendants have not established that this Court has federal jurisdiction over plaintiff's state law fiduciary duty claims and will therefore grant plaintiff's motion to remand this case to state court. The accompanying Order is entered."

 

 


 

 

 

CARTER V HEALTH NET OF CALIFORNIA

(9th Cir., 07/06/2004)

 

ERISA, PPO, Arbitration?

 

"Donald Carter (“Carter”) and his daughter Kathryn Carter (“Katie”) appeal the district court’s order vacating an arbitration award against Health Net of California (“Health Net”), an insurance company, on the ground that the arbitrator did not have jurisdiction over Health Net. The Carters argue that the district court lacked subject-matter jurisdiction over the opposing petitions to vacate and confirm the arbitration award because neither presented a federal question. We agree, and remand this case to the district court for remand to state court."

 

 

 


 

 

 

Knoblauch v. Metropolitan Life Insurance Company, Inc., et al.

(MANNION, M.J.)

"Again, the court is satisfied that the plaintiff has set forth a genuine issue of material fact as to whether the plan administrator complied with the procedures required by the plan.....

 

O R D E R

1. Defendants motion for summary judgment (Doc. No. 18) is DENIED;"

 

 


 

 

 

Sopp v. CNA Insurance Company, et al.

(MANNION, M.J.)

 

"As indicated above, the burden of proof remains with the claimant to establish total disability. Mitchell, 113 F.3d at 439. This court is not free to substitute its own judgment for that of the plan administrator in determining eligibility for plan benefits, and may reverse the administrator’s decision only if it was arbitrary and capricious. Abnathya, 2 F.3d at 45. The record on the whole establishes that the decision to terminate short term disability benefits as of August 31, 1999, and to not approve long term disability benefits, was not arbitrary and capricious. . Thus, summary judgment in favor of the defendants is warranted. Conversely, the plaintiff has failed to show there is a genuine issue of material fact that requires resolution by trial, nor that he is entitled to Summary Judgment as a matter of Law."

 

 

 


 

 

Hunter v. Federal Express

 

"The Plan names FedEx as its Administrator and empowers the Administrator to "receive, evaluate and process all . . . claims and . . . allow payment of benefits under the Plan in accordance with its terms." See App. 285-86,318. FedEx, however, elected to outsource the initial evaluation and processing of claims to Kemper. See App. 464-98. The Plan and the Kemper outsourcing agreement both recognize that FedEx has "sole and exclusive discretion" to determine whether it will pay long term disability benefits to any claimant under the Plan. ....

If Kemper denies benefits to a claimant, then FedEx's Benefit Review Committee ("BRC") must "conduct[ a] review[] of denial of benefits and provid[e] the claimant with written notice of the decision reached."

 

 


 

 

 

Algayer v. Metropolitan Life Ins.

 

"Conclusion

We therefore conclude that the Plan's three-year clause is applicable here and bars Algayer's claims. MetLife triggered the period of limitation on January 18, 2000 when it gave Algayer a final opportunity to submit proof of her disability, and the insurer unequivocally notified her on September 1, 2000 that it had decided to deny her claim for the resumption of benefits. At the latest, then, Algayer knew in September of 2000 that her only remaining option was to file suit within the limitation period set forth in the Plan. Algayer's unilateral decision in 2002 to submit additional proof did not reset the clock because, at that point, MetLife reasonably regarded her case as closed. By the time she filed suit in January of 2004, the limitation period had expired.

An appropriate Order and Judgment follow."

 

 

 


 

 

 

Madaffari  v. Metrocall Co Grp

 

Who can be sued as proper defendants?

Group insurer and the plan

"Nevertheless, because of its examination of the Jass opinion, and because the intent of ERISA is that the "party legally responsible for paying benefits governed by ERISA is a party that can be sued," the Court is unable to say that ReliaStar is not a proper defendant in this action.6 Penrose, 2003 WL 21801214*3 ReiaStar's motion to dismiss is therefore denied with respect to Count I."
 

 

 


 

 

 

Burris v. Five River Carpenter District Council Health & Walfare Fund

 

"This is an action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., concerning plaintiffs' rights to continuation of health insurance coverage provided for in the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") amendments to ERISA.

 

Plaintiffs' claim is solely for statutory penalties."

 

"ORDER FOR JUDGMENT

The Clerk shall enter judgment substantially as follows:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that judgment in the amount of Five Thousand Eight Hundred Eighty-five Dollars ($5,885.00)is entered in favor of plaintiffs Gregg Burris and Michelle Burris and against defendant Five River Carpenter District Council Health and Welfare Fund, plus interest as provided by law.

 

IT IS SO ORDERED.

 

Dated this 15th day of January, 2004."

 

 

 


 

 

 

Admin Comm Wal-Mart v.  Varco  

 

 


 

Leonard J. Klay v. Humana, Inc.

00-01334 MD-FAM

06-30-2004

 

"Before TJOFLAT, BIRCH and GOODWIN , Circuit Judges. *
TJOFLAT, Circuit Judge:


In this putative class action, physicians are suing many of this country’s 1 largest HMOs, alleging that these organizations conspired to systematically underpay them for their medical services. The defendant HMOs immediately moved the district court to stay the proceedings and compel the named plaintiffs to arbitrate their claims. The court held that certain claims were arbitrable, and others nonarbitrable.......

 

V.

For these reasons, the district court’s injunction, in its entirety, is REVERSED."

 


 

 

Federal Judge Sees 'Disturbing Pattern of Erroneous and Arbitrary' Denials by First Unum, Unum Life (PDF)

(U.S. District Court for the District of Massachusetts, via Brininger LTD ERISA Litigation Web Site at www.erisa.md)

 

At p. 45 of 76-page document; Trust v. First Unum Life Insurance Company of America (D. Mass. No. 02-12477-WGY, June 15, 2004). Excerpt: "[A]n examination of cases involving First Unum and Unum Life Insurance Company of America, which like First Unum is an insuring subsidiary of Unum Provident Corporation,19 reveals a disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics."

 

 


 

 

Klassy, Jim v. Physicians Plus Insurance Co.

(7th Cir., 06/15/2004)

"MANION, Circuit Judge. Jim and Barbra Klassy sued Physicians Plus Insurance Company (“Physicians Plus”) and Dr. Gary Johnson, alleging numerous claims stemming from Physicians Plus’s refusal to approve payment for a bloodless hip surgery for Barbra, who is a practicing Jehovah’s Witness. The district court dismissed the Klassys’ claims, one for failure to state a claim and the others as being completely preempted by the Employment Retirement Income Security Act of 1974. 29 U.S.C. §§ 1001, et seq. (“ERISA”). The district court then gave the Klassys the opportunity to amend their complaint to state a claim under ERISA, but they instead filed this appeal. On appeal, the Klassys challenge only the district court’s holding that Barbra’s medical malpractice claim against Dr. Gary Johnson is completely preempted by ERISA. We affirm."

 

 


 

Heinz v. Central Laborers' Pension Fund  (PDF) (Supreme Court of the United States) (June 7, 2004)

15 pages. Excerpt (from syllabus): "Held: ERISA §204(g) prohibits a plan amendment expanding the cate-gories of postretirement employment that triggers suspension of the payment of early retirement benefits already accrued."

Overview: Supreme Court Issues Opinion In Central Laborers' Pension Fund v. Heinz (Attorney B. Janell Grier on BenefitsBlog)

 

 

 

 


 

 

PEO Liable for Failure to Provide COBRA Notices; Over $300,000 Awarded (Employee Benefits Institute of America Inc. (EBIA))

 

 


 

Physicians' Multispecialty v. The Health

(11th Cir. 06-03-2004)

 
"V. CONCLUSION


We conclude that ERISA’s silence on the assignability issue cannot be interpreted to mandate affirmatively an absolute right to assign. Rather, we conclude that ERISA’s silence on the assignability issue leaves the matter of assignability of welfare benefits to the agreement of the contracting parties. The Plan provision in this case clearly provides that a participant or beneficiary cannot assign benefits. This is a valid, enforceable provision. Thus, PMG cannot maintain an ERISA action. Accordingly, we reverse the district court’s grant of summary judgment and remand this case to the district court for further proceedings consistent with this opinion.


REVERSED and REMANDED."

 ERISAclaim.com Comment:

 

    This is a 2001 claim, before the new ERISA claim regulation went into effect. The anti-assignment practice has been ruled inconsistently among different jurisdictions.

 

    This is why New ERISA Claim Regulation established new federal standard on assignment practice.

 
 

"The proposal eliminated a provision in the 1977 regulation that seemed to imply that representatives of a claimant must be ``duly authorized'' to act on behalf of the claimant. This change reflected the perception of the Department that no single Federal standard governs the authorization of a representative and that claimants should be able to freely name representatives to act on their behalf. Many commenters representing employers and plans responded that elimination of the concept of an ``authorized'' representative could be read to require plans to accept anyone who claimed to be a representative of a claimant, without permitting plans to establish reasonable procedures to verify that status. This could prevent plans from protecting the privacy or other rights of claimants. The regulation responds to this concern by reinstituting a concept of authorization with respect to claimants' representatives.\36\ Specifically, subparagraph (b)(4) provides that a plan's claims procedures may not preclude an authorized representative (including a health care provider) from acting on behalf of a claimant and further provides that a plan may establish reasonable procedures for verifying that an individual has been authorized to act on behalf of a claimant. However, subparagraph (b)(4) requires a group health plan to recognize a health care professional with knowledge of a claimant's medical condition as the claimant's representative in connection with an urgent care claim.

---------------------------------------------------------------------------

    \36\ This provision, which is a clarification of current law,
applies to all employee benefit plans covered under the Act.
---------------------------------------------------------------------------"

    It's my view that plan's anti-assignment practice would save plan's time and money from healthcare provider's appeals and court challenge, thus save money in short terms, but in long run such anti-assignment practice would have caused U.S. healthcare crisis in the past decades and caused plan's more money if no health service provider under ERISA could eventually resolve dispute with plan under any jurisdictions in U.S.A., thus providers increase the charges as the only way to take care of their problems.

 

   The new ERISA claim regulation is a step in right direction in solving this problem.

 

 


 

 

John Daniels v   Wayne Bursey  

 

"MATTHEW F. KENNELLY, District Judge:

 

Unfortunately, these rather elementary principles have been forgotten by several of the lawyers in this case, assuming they understood them to begin with. The level of invective in these lawyers’ presentations in this case has far exceeded the high end of the normal range. And at least some of the disputes have been without precedent in my own experience."

ERISAclaim.com Comment:

Why lawyers hate each other in court? Because it's ERISA, so frustrating, can't help. A must read, but don't follow.


 

Scott v. Hartford Life & Accident Ins. Co.

2004 U.S. Dist. LEXIS 8702 (E.D. Pa. 2004)
 

INSURER'S  DENIAL LETTERS MUST EXPLAIN SPECIFIC REASONS FOR DECISION AND COMPLY WITH DOL CLAIM REGULATIONS.

 

 


 

 

 

QualChoice, Inc. v. Rowland (6th Cir. 2004)

 

Sixth Circuit Holds Action to Enforce Plan Reimbursement Provision Under ERISA Is 'Legal'

(Employee Benefits Institute of America Inc. (EBIA))

 

 


 

American Chiropractic v. Trigon Healthcare

4th Cir. 05/06/04

Decision: Affirmed LOWER COURT INFORMATION: Western District of Virginia at Abingdon CA-00-113-1 James P. Jones (Presiding Judge)

 

"OPINION

 

WILLIAMS, Circuit Judge:

 

In this appeal, we consider whether Trigon Healthcare, Virginia’s largest for-profit health insurance company, and its affiliated companies (collectively, Trigon),1 were engaged in an anticompetitive conspiracy with medical doctors and medical associations whose purpose was to harm chiropractors. American Chiropractic2 filed this eight count complaint alleging violations of federal antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (RICO), and various state laws, claiming that Trigon and the medical doctors and associations were engaged in a conspiracy that used Trigon’s reimbursement policies and treatment guidelines to limit severely the flow of insurance dollars to chiropractors and steer those monies toward medical doctors. Trigon argues that no conspiracy exists, and that it implemented its coverage policies unilaterally based on market supply and demand. The district court agreed with Trigon, dismissing two counts of the complaint for failure to state a claim and disposing of the remaining counts by granting Trigon’s motion for summary judgment. Although we apply different reasoning than the district court in some areas, we affirm its disposition of the case in favor of Trigon."

 


 

 

 

Gorini v. AMP Incorporated

 2004 U.S. App. LEXIS 7460 (3d Cir. 2004)

 

$160,000 Statutory Penalty for Failure to Provide SPD and Plan Document, Even No Benefits Available

 

Excerpt: "When considering whether to impose such penalties, the court can consider (1) bad faith or intentional conduct of the plan administrator, (2) length of delay, (3) number of requests made, (4) documents withheld, and (5) prejudice to the participant. Romero v. Smith Kline Beecham, 309 F.3d 113, 120 (3d Cir. 2002) (citations omitted). Here, the district court found that Tyco’s failure evinced a pattern of “conscious choices to decline to disclose” and “recalcitrance”4 in providing documents Gorini was entitled to under ERISA. JA 30-31. Although the court did not literally use the words “bad faith,” given the analysis of Tyco’s conduct, it is difficult to reach any conclusion other than that Tyco did act in bad faith."

 

Failure to Provide Plan Documents Resulted in Statutory Penalties of $160,000 (Employee Benefits Institute of America Inc. (EBIA))

Excerpt: "Although the trial court determined that the employee was not entitled to severance benefits, it assessed a penalty against the employer in the amount of $160,780 for the employer's failure to provide the requested documents. The employer appealed the penalty assessment, arguing that ... the employee was not a plan participant and consequently was not entitled to penalties under ERISA Section 502(c) ..."
 


 

 

Cooperative Benefit Adm'rs, Inc. v. Ogden

 2004 U.S. App. LEXIS 7300 (5th Cir. 2004)

 

COURT DISMISSING FIDUCIARY'S FEDERAL COMMON-LAW UNJUST ENRICHMENT CLAIM FOR RECOVERY OF BENEFIT OVERPAYMENTS

 

 

 


 

 

Linder v. BYK-Chemie USA Inc.,

2004 U.S. Dist. LEXIS 6228 (D. Conn.2004)

 

Claimant Could File Suit Because Plan Failed to Decide Claim Within 90 Days (Employee Benefits Institute of America Inc. (EBIA))

 

Excerpt:  “......Linder argues, however, that under the Department of Labor regulations in effect since January 1, 2002, administrative remedies are deemed to be exhausted if the Plan Administrator fails to respond to a claim for benefits within 90 days. He argues that the Plan's claims procedures, which provide that a claimant may administratively appeal if the Plan Administrator fails to respond within 90 days, are invalid, as they fail to comply with ERISA's procedural requirements. The Court agrees.

 

Under the express terms of the regulations, Linder's claim is deemed exhausted, and he is entitled to bring suit in federal court. See 29 C.F.R. § 2560.503-1(l)."

 

ERISAclaim.com Comment:

 

In this latest 2004 case ruled under new ERISA claim regulation, a failure to render a timely decision by the plan administrator resulted in "deemed denial", "deemed exhaustion of remedy" and "loss of deferential review standard", the worst for the plan in ERISA litigation. (Please note this is a pension claim)

 

 

 


 


Guardsmark, Inc. v. Blue Cross & Blue Shield of Tenn., Civ. No. 01-2117 (W.D. Tenn. 2004)

Authority to Grant or Deny Claims and to Write Checks Makes Third-Party Administrator a Fiduciary (EBIA.COM)

 

 


 

 

PROVIDENT LIFE v SHARPLESS

 

"An ERISA restitution claim is equitable in nature and does not provide a right to a jury trial. Borst v. Chevron Corp., 36 F.3d 1308, 1323 (5th Cir. 1994); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir. 1980). Sharpless contends, however, that she was entitled to a jury trial because Provident’s claim was legal rather than equitable."

ERISAclaim.com Comment:

 

This (5th Cir.) is interesting point comparing to the recent 7th Cir. ruling on "equitable" v. "legal" claim when plan is asking for money back.

 

Leipzig, Steven v. AIG Life Insur Co (7th Cir. 03/25/2004)

"But the district court dismissed the counterclaim for want of subject-matter jurisdiction, ruling that because a demand for money is a “legal” rather than an “equitable” claim, it does not fall within ERISA’s grant of jurisdiction for claims by ERISA fiduciaries, as opposed to claims against them. See Leipzig v. AIG Life Insurance Co., 257 F. Supp. 2d 1152 (N.D. Ill. 2003), discussing §502(a)(3) of ERISA, 29 U.S.C. §1132(a)(3), and Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002)."


 

 

BAKER v METRO LIFE INS CO

 

"This appeal requires us to determine the degree of deference the Plan insurer, Metropolitan Life Insurance Company, is required to give the named Plan administrator, Burlington Resources Inc., under the terms of the Metropolitan Life Plan."

 

"Burlington’s consideration of that agreement in approving Baker’s clF">BAKER v METRO LIFE INS CO

 

"This appeal requires us to determine the degree of deference the Plan insurer, Metropolitan Life Insurance Company, is required to give the named Plan administrator, Burlington Resources Inc., under the terms of the Metropolitan Life Plan."

 

"Burlington’s consideration of that agreement in approving Baker’s claim exceeded its discretionary authority under the Plan. Thus, Burlington’s resort to an agreement extraneous to the Plan and its determination that Baker was entitled to the increased benefits are in direct conflict with the terms of the Plan; as such, Burlington’s decision is arbitrary and capricious and not entitled to “full force and effect” under the Plan. See Gosselink, 272 F.3d at 727; see also Wildbur, 974 F.2d at 638 (stating that an interpretation in direct conflict with the explicit language of the Plan indicates that the interpretation is arbitrary and capricious)."

ERISAclaim.com Comment:

 

Managed care practice nationwide employing MCO/PPO/HMO agreement, instead of the plan document, to make benefits determination  is a classical "resort to an agreement extraneous to the Plan".

 

 


 

DEBRA SHAW v THE MCFARLAND CLINIC

 

"III. CONCLUSION


Based on the foregoing, we hold that an employee’s action alleging the improper denial of preauthorization for health benefits by her employer is most analogous under Iowa law to an action for breach of a written contract. Because Shaw instituted the present action against McFarland well within the applicable ten-year statute of limitations, the judgment of the district court is AFFIRMED."

 


 

 

Dipietro  v.  Prudential Ins Co  

(03/25/2004)

 

Dipietro  v.  Prudential Ins Co

(05/04/2004)  

Excerpt: "...This record provides a clear-cut case, thus remand is unnecessary. After arbitrarily denying plaintiff's claim, defendant Is not entitled to develop a new record to evaluate plaintiff's initial eligibility while plaintiff waits without benefits. Defendant may certainly conduct new tests and exams to determine whether plaintiff should continue to receive benefits, but the present record establishes his initial eligibility....

 

CONCLUSION

For the foregoing reasons, defendant's motion to reconsider is denied."

 


 

Providence Health Plan v. McDowell
 2004 U.S. App. LEXIS 5476 (9th Cir. 2004)

 

STATE-LAW SUBROGATION/REIMBURSEMENT CLAIM NOT
PREEMPTED BY ERISA

 

 


 

 

Leipzig, Steven v. AIG Life Insur Co (7th Cir. 03/25/2004)

 

Deferential review standard and ERISA recoupment claims.

 

"But the district court dismissed the counterclaim for want of subject-matter jurisdiction, ruling that because a demand for money is a “legal” rather than an “equitable” claim, it does not fall within ERISA’s grant of jurisdiction for claims by ERISA fiduciaries, as opposed to claims against them. See Leipzig v. AIG Life Insurance Co., 257 F. Supp. 2d 1152 (N.D. Ill. 2003), discussing §502(a)(3) of ERISA, 29 U.S.C. §1132(a)(3), and Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002)."

 

"Section 502(a)(3) creates federal jurisdiction over equitable claims by pension and welfare plans. Great-West holds that, as a rule, a plan’s demand to be reimbursed for benefits wrongly paid out is not such a claim; it is instead a quest for money damages and thus is legal rather than equitable. AIG wants money, not the return of the checks it issued to Leipzig or the contents of a segregated fund, and Great-West rejected the possibility of applying the “restitution” label to demands of this kind. The claim therefore is legal rather than equitable. See Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544 (7th Cir. 2003). All AIG says in response—other than to rely on Justice Ginsburg’s dissent in Great-West, which can’t carry the day in a court of appeals—is that, because it has a good claim under federal law, there must be federal jurisdiction. Why so? Until 1875 the federal courts had no federal-question jurisdiction at all. State courts were, and remain, empowered to entertain claims arising under federal law. Although today almost every federal claim can be heard in federal court under §1331, Great-West shows that there are still lacunae. AIG can pursue its claim in state court without encountering a defense of preemption; ERISA preempts state-law theories, not claims arising under federal law.

 

AFFIRMED"

 

ERISAclaim.com Comment:   This ruling shall give 7th Cir. views on more and more popular plan's recoupment practice across the country.

 

 


Carey v. Conn. Gen. Life Ins. Co., Civ. No. 02-3642
(D. Minn. 3/8/04)

 

TELEPHONE CONVERSATION CAN CONSTITUTE A CLAIM DENIAL


 


 

Lowe v. McGraw-Hill Cos., 2004 U.S. App. LEXIS 4815
(7th Cir. 2004)

$35,050 civil penalties (determined by multiplying $50 per day by 701 days) for failing to provide the requested documents and $19,000 for attorneys' fees
.

"A failure to honor a request for plan documents by a plan’s participant or beneficiary within 30 days of the request exposes the plan to a statutory penalty of $100 (now $110) a day. 29 U.S.C. § 1132(c)(1); 29 C.F.R. § 2575.502c-1. Because the statute provides no criteria to guide determination of the amount to be awarded within that limit, that determination is left to the discretion of the district judge. Ziaee v. Vest, 916 F.2d 1204, 1210 (7th Cir. 1990); McDonald v. Pension Plan of NYSA-ILA Pension Trust Fund, 320 F.3d 151, 163 (2d Cir. 2003). The judge did not abuse her discretion in assessing a $50 a day penalty against the plan. The plan’s delay in giving Lowe documents to which he was clearly entitled was egregious, driving him to hire a lawyer and entangling him in litigation culminating in an absurd cross-appeal (of which more later). The offender—the McGraw-Hill plan—is a substantial entity that cannot claim to lack the resources necessary for processing document requests expeditiously. Not that poverty would be a defense, but it might—we do not hold that it would; the question is not presented—be a mitigating circumstance. Cf. Hicks v. Feiock, 485 U.S. 624, 638 n. 9 (1988); South Suburban Housing
Center v. Berry, 186 F.3d 851, 854-55 (7th Cir. 1999); Huber v.
Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995).

 

The McGraw-Hill plan can consider itself lucky that only half the maximum penalty was imposed. Compare Krueger Int’l, Inc. v. Blank, 225 F.3d 806, 811 (7th Cir. 2000); Law v. Ernst & Young, 956 F.2d 364, 375 (1st Cir. 1992). We add that the plan could have determined the significance of the judge’s factual mistake by moving under Fed. R. Civ. P. 59 for reconsideration of her decision."
 

Nixon Peabody's August 2004 Benefits Briefs: Legal Developments for Employee Benefits (PDF) 6 pages.(Nixon Peabody LLP)

 

"Gorini sued, and even though the court ruled that he was not eligible for the claimed severance benefits, it awarded him a penalty of $160,780 for Tyco’s refusal to hand over copies of the plan documents. Gorini v. Tyco Electronics, Inc., 2004 U.S. App. LEXIS 7460 (3d Cir. 4/16/04) (unpublished op.) The court held that the term “participant” means not only an actual participant but a person with a colorable claim to benefits. Colorable in this sense means a reasonable belief that one is entitled to benefits. The court refused to be lenient because it believed Tyco acted in bad faith, i.e., it displayed a pattern of “conscious choices” to withhold documents and “recalcitrance’’ in handing them over."

 

 

JOSEPH B. GORINI  v. AMP INCORPORATED or,

Its Successor In Interest, TYCO ELECTRONICS, INC.

09/18/2003

 

"Tyco was granted summary judgment on Gorini’s claim that Tyco had failed to disclose an annual report for one of the severance plans as required under ERISA. Gorini was granted summary judgment on claims that Tyco did not disclose other documents relating to the plans, and the court awarded a penalty of $160,780 under ERISA § 502(c)(1)(B) for four of the five nondisclosures. The court otherwise denied both motions."

 

 

 


 

 

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

"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:

 

  1. Supreme Court clarifies the definition of ERISA plan, even one employee, that's an ERISA plan;

  2. 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;

  3. 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)

 


 

 

 

HART, JUSTIN v. WAL-MART STORES HEAL [03/01]

(7th Circuit Court)

 

Excerpt: "In both of these earlier cases we held that a petition to apportion claims to a settlement fund between an ERISA plan subrogation claim and other lienholders was not preempted by ERISA’s civil enforcement provision and the allocation of the funds was a matter for determination in the state court. In the present case, Wal-Mart asks us to re-reconsider the issue, this time in the context of an award of $11,500 in attorney’s fees, which the district court taxed against Wal-Mart under 28 U.S.C. §1447(c). After serious consideration (mainly of the possibility of sanctioning Wal-Mart for bringing this presumptuous appeal), we reaffirm our previous holdings in Blackburn and Speciale and affirm the order of the district court."

 


 

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

 

 


 

 

 

Texas Prompt Pay Law Not Preempted by ERISA (PDF)
(Jenkens & Gilchrist) (
At page 3 of 5-page document)

 

 


 

 

Relying on New Claims Regulations, Court Orders Plan Insurer to Produce Additional Information to Claimant

(Employee Benefits Institute of America, EBIA)

 

Cannon v. UNUM Life Ins. Co., 2004 U.S. Dist. LEXIS 835 (D. Me. 2004)(PDF)

 

 

SPD Controlled Over Conflicting Language in Plan Enrollment Guide (Employee Benefits Institute of America, EBIA)

 

Bailey v. Cigna Ins. Co., 2004 U.S. App. LEXIS 1539 (5th Cir. 2004)

 


 

Scorsone v. United Food and Commercial Workers Union Local 1245

 

Benefit Denial Overruled Because Plan Failed to Consult Medical Expert About Benefit Appeal (Employee Benefits Institute of America, EBIA))

 

Excerpt: "The result in this case would have been even clearer under the DOL's new claims procedure regulations, which require that group health plan appeals involving medical judgment (including determinations of medical necessity) be decided in consultation with a medical expert."

 

ERISAclaim.com Comments:

 

Under new federal claim regulation, plan is required not only to consult with different medical experts at 2 level appeals for decisions involving medical judgment as in this case, but also to comply with new definition of medical experts/health care professional and disclose everything used in this decision making by medical experts and the plan:

 

  1. "Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)]

  2. "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)]

  3. A Full and Fair Review with new definitions and protection requires De Dovo reviews on two appeals by at least four (4) different people, two (2) different fiduciaries with ERISA plan, and two (2) different Health-care professionals independent to the ERISA plan. [Page 70252-70253, 70268-70269, CFR § 2560.503-1(h)(3)]

  4. Plan must disclose all the "secrets" under new definitions of relevant documents with better disclosure obligations, no more medical necessity secrets, UCR fee schedules are no longer confidential. [Page 70252 & 70271, CFR § 2560.503-1(m)(8)  (DOL FAQ B-5, C17)]

 

 


 

Statutory Penalties Upheld for Defective COBRA Election Notice (Employee Benefits Institute of America (EBIA))

 

 


 

 

Federal District Judge Set To Approve Settlement Between CIGNA, Doctors (KaiserNetwork.org)

 

 

 


 

Judge Rules RICO Suit May Proceed to Trial
(
California Physician)

 

Omnibus order granting in part and denying in part joint motion to dismiss the second amended consolidated class action complaint* (12/08/2003)

Click here to read Judge Moreno's ruling

 

RICO Lawsuit Resource Center (California Physician)

 

Major HMO's Fail to Stop Class Action Suit Brought by 700,000 Physicians (www.hmocrisis.com)

 

Federal Judge Permits Doctors To Seek Damages From HMOs for Violating RICO Act (KaiserNetwork.org)

Judge Sides With Doctors Over Insurers ( New York Times )

 

 


 

 

JEBIAN v. HEWLETT-PACKARD [9th Cir.,11/25/03]

 

 

Excerpt:  "[3] The primary question before us, of first impression in this circuit, is whether a plan administrator’s decision, other-wise within the administrator’s discretion, can be accorded judicial deference when the purported final, discretionary decision is not made until after the claim is, according to both the terms of the plan and Department of Labor (DOL) regulations, already automatically deemed denied on review. We conclude that where, according to plan and regulatory language, a claim is “deemed . . . denied” on review after the expiration of a given time period, there is no opportunity for the exercise of  discretion and the denial is usually to be reviewed de novo. While deference may be due to a plan administrator that is engaged in a good faith attempt to comply with its deadlines when they lapse, this is not such a case."

 

ERISAclaim.com Comments:

 

    This is consistent with DOL interpretation for § 2560.503-1(l) through CFR accompanying supplementary information on page 70255: “The Department’s intentions in including this provision in the proposal were to clarify that the procedural minimums of the regulation are essential to procedural fairness and that a decision made in the absence of the mandated procedural protections should not be entitled to any judicial deference.”

 

     This legal point of “deemed . . . denied”= "de novo review" will decide largely winning or losing in an ERISA claim in the federal court.

 

 

 


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

 

 

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

 

 

Both sides ready for HMO liability fight  (AMNews)

 

 

 

SUPREME COURT Docket for 02-1845
Aetna v. Davila
 

 

ARGUMENT Tuesday, March 23, 2004.

For petitioner Aetna Health Inc.

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

(Copyright © 2004 by Jin Zhou,  ERISAclaim.com)

04/28/2004


U.S. SUPREME COURT
Docket for 03-83
 

ORAL ARGUMENT TRANSCRIPTS

(Summary of Oral Arguments)

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:

 

  1. Not only contractual damage as in the past;

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

  3. However, no punitive available as contemplated by the most;

  4. 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)

 

 

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.7 That 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 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)

  1. "Plans must consult with appropriate health care professionals in deciding appealed claims involving medical judgment." [70268-70269, CFR § 2560.503-1(h)(3)(iii)]

  2. "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)]  

 

    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.

 

 

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.

 

 

 


 

 

ROARK v. HUMANA, INC.
01-10831.cv0 (PDF)

 

 

 


 

 

COMMUNITY HEALTH v. MOSSER

 

The district court lacked subject matter jurisdiction over an action by plaintiff insurance company to enforce its plan's subrogation provision.

 

 

 


 

 

Cheng v. UNUM Life Ins. Co.

Plan Insurer Violated ERISA by Failing to Describe Additional Information Required for Claim and by Not Considering Claimant's Comments (EBIA.com)

 

 

 


 

 

DiFelice v. Aetna US Healthcare
(3rd Cir. Ct) (pdf)(45 pages)

 

"Becker Calls on Congress, Justices to Fix ERISA" (law.com)
 

 

ERISAclaim.com Comment:

 

1) This ruling has completely misinterpreted PEGRAM et al. v. HERDRICH with respect to the Supreme Court holding that "Because mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA,...." and the Supreme Court in PEGRAM et al. v. HERDRICH does not require the actual delivery of medical care to be a nonfiduciary decisionmaking but only mixed treatment and eligibility decisionmaking to be a nonfiduciary decisionmaking;

 

2) This ruling is completely contrary to 2d Cir. Court ruling in CICIO v VYTRA HEALTHCARE, in which the mixed treatment and eligibility decision can be determined: "It may nonetheless be that, as a matter of fact, Dr. Spears's decision was purely one concerning eligibility, i.e., a determination that, without regard to Mr. Cicio's "constellation of symptoms" but in the abstract, double cell stem transplants were experimental as treatment for multiple myeloma. In that case, the claims would be completely preempted by ERISA and therefore subject to dismissal";

3) The Justice of the entire panel is completely frustrated as to the high court guidance and the Congress "remorse" for relief and corrections;

 

4) This ruling completely ignored the ERISA claim regulation with respect to benefits determination involving medical judgment under § 2560.503-1(h)(3)(iii), it requires that "Provide that, in deciding an appeal of any adverse benefit determination that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate, the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment;", and § 2560.503-1(m)(7) defines health care professional as: "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", although new regulation may not be applicable for this case while ERISA fiduciary duties call for consultation with healthcare professionals in order to make such mixed treatment and eligibility determinations to avoid tragedies and injuries;

 

5) No one in the case, plaintiff, defendant and Justices, recognized and emphasized ERISA appeal process, as prescribed by Congress in order to protect participants and beneficiaries in benefits dispute, such as this one.

 

 

 

NATALIE M. GRIDER v. KEYSTONE HEALTH PLAN

(2003 WL 22182905 (E.D.PA))

 

 

"CONCLUSION

In sum, the following of plaintiffs' claims are dismissed: (1) all RICO claims based on Section 1962(a); (2) Section 1962(c) and (d) mail and wire fraud claims stemming from an alleged statistically insignificant sampling of HMO member satisfaction; (3) Section 1962(c) and (d) mail and wire fraud claims based on alleged omissions of a general cost containment policy, variation of capitation rates by age and sex, inclusion of injections as part of capitated services, general averments of systematic delay and denial of reimbursement claims; (4) the Hobbs Act claim alleging inability to negotiate an arm's length contract; (5) the aiding and abetting claims; and (6) plaintiffs' state law claim regarding an implied duty of good faith and fair dealing.

 

The following plaintiffs' claims survive: (1) Section 1962(c) and (d) mail and wire fraud claims stemming from "shaving" capitation payments; (2) Section 1962(c) and (d) mail and wire fraud claims stemming from manipulation of bonus criteria (except for those relating to the insignificant statistical sampling); (3) Section 1962(c) and (d) mail and wire fraud claims stemming from misrepresentations and material omissions pertaining to the payment of medically necessary services, incentives for claim reviewers to wrongfully delay and deny payment owed, downcoding and bundling of claims, and participation in risk pools; (4) the Hobbs Act claim alleging fear of economic retaliation for disputing the delay and denial of claims; (5) claims relating to bribery and Travel Act violations and (6) plaintiffs' state law claim for prompt payment of claims pursuant to section 2166."

 

 

 

 


 

 

 

Tittle v. Enron Corp.
2003 U.S. Dist. LEXIS 17492 (S.D. Tex. 2003)]

entered October 1, 2003.
(pdf, 331 page document - may take up to 11 minutes to download.)

or

Text of Enron Memorandum and Order, Part I (PDF) (U.S. District Court for the Southern District of Texas)

 

Text of Enron Memorandum and Order, Part II (PDF) (U.S. District Court for the Southern District of Texas)

 

Text of Enron Memorandum and Order, Part III (PDF) (U.S. District Court for the Southern District of Texas)

9/30/2003. Excerpt: "The above referenced action is brought on behalf of Enron Corporation ... employees who were participants in three employee pension benefit plans governed by [ERISA], specifically the Enron Corporation Savings Plan ... the Enron Corporation Employee Stock Ownership Plan ... and the Enron Corporation Cash Balance Plan ... and also on behalf of Enron employees who received 'phantom stock' as compensation."

Court Refuses to Dismiss Fiduciary Breach Claims in Enron Litigation (EBIA WEEKLY)

 

Executive Summary – Enron ERISA Litigation Ruling (Groom Law Group)

Excerpt: "While the Court's ruling breaks little new ground, some of the more significant conclusions that it reached include: The individual officers and directors who act with respect to a benefit plan on behalf of a corporate fiduciary are themselves ERISA fiduciaries (disagreeing with the Third Circuit's ruling in Confer v. Custom Engineering Co., 952 F.3d 34, 37 (3rd Cir. 1991))."

Enron Case Moves Forward: Plan Fiduciaries Should Take Note (PDF) (Gardner Carton & Douglas)

 

 


 

 

Nearly Sixty Blue Cross/Blue Shield Affiliates throughout the Country Sued by Physicians (HMO Crisis Newsroom)

*00-1334-MD Transfer Order - 09/25/03 (pdf)

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

May 22, 03  Plaintiffs' Class Action Complaint / Part 1 / Part 2

May 22, 03  Civil Rico Case Statement Pursuant to Local Rule 12.1

Jun 29, 04 Subpoena Duces Tecum: National Account Service Company LLC (produce docs: 7/27/04)

 

Jun 18, 04 Plaintiffs' Second Amended Class Action Complaint

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

 


  

 

LINDA BROWN v AVENTIS

 


Excerpt:  "Defendants-Appellants Aventis Pharmaceuticals and Helen Hefner appeal the orders of the district court1 requiring them to pay the plaintiff, Linda Brown, $8030 in statutory penalties for a violation of COBRA notification, $11,550 in statutory penalties under ERISA for failure to supply summary plan documents after a written request, and a certificate of life insurance for $39,000 minus the amount of premiums that would have been incurred by the plaintiff in exercising her life insurance conversion rights. We affirm."

 

 

 

Courts Stress Importance of SPDs
(Thompson Publishing Group)

 

 


 

 

 

McDougall vs Pelchart, et al (Aetna, UPS)

 

 

ERISAclaim.com Comment:

 

Who shall be the defendant? Aetna or UPS?

 

or

 

your run-around

 

 

 


 

 

 CIGNA Healthcare Announces Settlement of Physician Class-Action Lawsuits, Sep 3, 2003 (Cigna.com)

 

CIGNA SETTLEMENT (HMOcrisis.com)

 

Excerpt:  "(3)       Time Limits for Completing Internal Appeals.

All internal appeals shall be completed within the time limits required by regulations  issued by the Department of Labor, even those internal appeals for which ERISA is not applicable. [page 50]

"(4)       Nothing contained in this Section 7.11 is intended, or shall be construed, to supersede, alter or limit the rights or remedies otherwise available to any Person under § 502(a) of ERISA or to supersede in any respect the claims procedures under § 503 of ERISA."
[page 53] 

 

00-MD-1334-MORENO - In RE: Managed Care Litigation
Order granting plaintiffs' motion for preliminary injunction* (12/12/2002)
Order granting provider track class certification and denying subscriber track class certification* (09/26/2002)

 

 


 

 

Penrose v. Hartford Life and Accident Ins. Co. (N.D. Ill. 2003)

 

Court Holds Plan's Insurer May Be Sued on ERISA Benefit Claim (EBIA Weekly)

 

 

Excerpt:  "It is plain enough in light of the ameliatory purposes of ERISA, the court of appeals is unlikely to hold that where the employer and/or administrator have failed to create or identify an entity known as a plan which can be sued, then a plaintiff is without a remedy in a suit to recover benefits. It is hardly debatable that the Congressional purpose behind § 1132(a)(2)(B) was, at the least, that a party legally responsible for paying benefits governed by ERISA is a party that can be sued. Everhart, 275 F.3d at 757. Here, it appears that Hartford not only has the final word on whether a claim for benefits will be paid to a beneficiary but also is the party that funds the plan. Absent any evidence that a plan entity exists, the court finds that Hartford is a proper defendant in a claim to recover benefits under the plan."

 

 


 

 

Three Cases Involving Alleged Fiduciary Breach for Failure to Disclose Information to Participants (EBIA Weekly)

 

 


Claim Denial Found Arbitrary and Capricious for Utterly Failing to Consider Plan Language (EBIA)

 

Wheeler v Aetna

MEMORANDUM OPINION
 

ERISAclaim.com Comments:

 

  1. Faulty Denial Notice:

    Initial Denial Notice/EOB from an ERISA plan by an insurer, Aetna in this case, must refer to specific and actual plan provisions (Summary Plan Description, SPD), instead of Aetna online "Coverage Policy Bulletin" on the web site, to include specific reasons for claims denials, "rational connection between the issue to be decided, the evidence in the case, the text under consideration, and the conclusion reached".
      In this case, a court found that Aetna's initial denial and subsequent two level appeals inadequate because “they utterly fail to consider the actual language to the plan at issue", "largely fail to connect Aetna's denial benefits to the specific situation and Bryce’s diagnoses. And Aetna's is cursory and simply states that claim/therapy is not covered without explaining why.
     

  2. "Necessary" and "Appropriate" Treatment Must Be Individually and Actually Determined:

     After reviewing the plan's definitions of "necessary" and "appropriate" treatment from the Summary Plan Description, the Court concludes:

     “It  is   clear   from  the   terms  of  the  plan   that  the necessary/appropriate determination will involve an individualized determination,  considering the particular circumstances,   medical condition,  and  health   condition, of the  possible outcome  of  a certain  treatment  relative  to alternative  treatments.   No such determination was made here with respect to Bryce.   Aetna does not state that the sensory integration therapy was not as  likely to produce a significant positive outcome as and no more likely to produce a negative outcome than any alternative    treatments,  nor does  Aetna  state  what the  possible  alternative treatments  are. Moreover,  there  was no  individualized determination of what  was necessary or appropriate treatment in light of Bryce's particular situation.    instead,  Aetna  refers   (in its briefs,  not  in its letters to the Wheelers)   to its "Coverage Policy Bulletin," which states that Aetna will not cover sensory integration therapy.
     

  3. Summary Plan Description (SPD), instead of Online "Coverage Policy Bulletin", Controls Coverage and Exclusion, Necessary and Appropriate Definitions:

     The court finds that the specific and actual plan's language must be referenced in benefits determination and be included in initial claim denial notice/EOB (Explanation of Benefits) instead of "Coverage Policy Bulletin" referenced and referred on Aetna's web site, which is a popular practice by Aetna and more and more health insurers, in the course of settling physician class actions and "compliance with" ERISA claim regulation.  SPD supersedes and invalidate any other "Coverage Policy Bulletin" and other company policy and internal guidelines if they are conflicted with the individual plan's SPD (Summary Plan Description).

 


 

 

 

ELLIOT v. FORTIS BENEFITS (via FindLawcom)


 

ERISA preempts state law claims against an insurer for compensatory and punitive damages under Montana's Unfair Trade Practices Act when an employee is covered by an fully-insured ERISA plan.

 

 

 


 

 

SONOCO PRODS CO v PHYSICIANS HEALTH PL [07/31/03, 4th Cir.]

 

The plan sponsor's claim against the insurer for increasing the premium as breaching of contract is not preempted by ERISA.

 

ERISAclaim.com Comment: This is the ERISA protection for business owners facing skyrocketing increasing in premiums.

 

 

 


 

 

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

 

An utilization review on medical necessity determination by a nurse of CIGNA in denial of inpatient hospital treatment is not a fiduciary function under ERISA as a question of pure coverage decision, thus a medical malpractice claim against CIGNA is not preempted by ERISA.

 

ERISAclaim.com Comment: This case ruling, in conjunction with CICIO v VYTRA HEALTHCARE  in accordance with PEGRAM et al. v. HERDRICH, clarified and enhanced federal court positions on utilization review of medical necessity by managed-care organizations and insurance companies as to whether ERISA preemption/ERISA shield protect them against state law medical malpractice claims, and other possible consumer fraud claims with potential of punitive damages.

 


 

 

 

ADMIN COMM WAL-MART v. VARCO, CLARA ( 7 thCir.)

 

 

An ERISA plan's subrogation claim, for medical expenses paid in connection with a personal injury case, was seeking an equitable remedy under ERISA 502(a)(3)(B). Illinois common fund doctrine is inapplicable in reducing reimbursement claims from a third-party settlement.
 

 


 

 

 

BURKE v KODAK RETIREMENT INCOME PLAN

 

Excerpt:  "The SPD was defective for omitting a critical restriction on Mrs. Burke’s eligibility for survivor income benefits as a domestic partner. Moreover, requiring plan participants or beneficiaries to show detrimental reliance to recover for a deficient SPD contravenes ERISA’s objective to promote distribution of accurate SPDs to employees. We now adopt a prejudice standard and find that Mrs. Burke was prejudiced as a matter of law."

 

 


 

 

Singh v. Prudential Health Care Plan, Inc.

 

Provisions of Saved State Insurance Law That Become Part of ERISA Plan May Be Enforced Only Under ERISA Section 502(a) (EBIA)

 

 

 


 

HUBERT BACK v DANKA CORPORATION

 

Plan's failure to inform participant of the available and required internal remedy was a violation of ERISA. 29 U.S.C. § 1022(b), therefore participant is excused from the exhaustion requirement.

 

 


 

 

 

Livingston v. Lange

 

ERISA has only conflict preemption, thus insufficient to preempt Illinois common fund doctrine in a case of Wal-Mart ERISA plan's claim for complete reimbursement from personal injury/automobile accident settlement for total medical expenses paid in connection with resulted injuries.

 


 

 

Burstein v. Retirement Account
 


When a summary plan description under ERISA conflicts with the complete, detailed ERISA plan document, a plan participant may nevertheless state a claim for plan benefits based upon terms contained in the summary plan description.

 

 


 

$40 Million Settlement Preliminarily Approved In Physicians' Class Action (Managed Care Liability Report)

 

 

Excerpt: "PHILADELPHIA -- A Pennsylvania judge on June 19 gave preliminary approval to a settlement between Independence Blue Cross (IBC), the Pennsylvania Orthopaedic Society and three physicians. The settlement agreement would resolve the physicians' class action lawsuit brought last year to challenge IBC's payment and reimbursement practices ......The settlement class comprises about 20,000 Philadelphia area physicians. The agreement includes, but is not limited to, all claims by providers for "downcoding" and/or "bundling," however described or characterized."

 


 

 

Neal v. General Motors Corp.

Court Allows Plan to Recover Overpayment (EBIA Weekly)

 

Excerpt: "In this case, the court permitted an ERISA pension plan to recover benefits erroneously paid to a participant's former spouse.... The court reasoned that the plan could recover the overpayment to the former spouse based on federal common law that provides a remedy for unjust enrichment if at least one of three requirements is met: ..."
 

 


 

 

Horvath v. Keystone Health Plan

 

HMO has no automatic disclosure obligations under ERISA for physician's financial incentives arrangement.

 

 


 

 

Black & Decker Disability Plan v. Nord (pdf)

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

 

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.

 

 


 

 

Chicago Foot Clinic vs. United Health Care Insurance, et al


"B. Preemption: Counts I-V

UHC argues that ERISA preempts each count of the Clinic's complaint, which is based on state law causes of action. Section 514(a) of ERISA provides, in relevant part, that ERISA "shall supersede any and all State laws insofar as they may. . . relate to any employee benefit plan." 29 U.S.C. § 1144(a). As such, the determination of whether ERISA preempts a state law requires an analysis of the following two issues: (1) whether the policy at issue is an employee welfare benefit plan, and (2) whether the state law "relate[s] to" the employee benefit plan. ......Neither party, however, provides this Court with a copy of Hernandez' insurance policy or the plan. In the context of this motion, we cannot find that the insurance policy UHC issued to Hernandez was part of an ERISA employee benefit plan. Consequently, we cannot further analyze UHC's contention that the Clinic's complaint is preempted by ERISA. This Court therefore denies UHC's motion to dismiss the Clinic's complaint on the ground of ERISA preemption...."

 

 


 

00-MD-1334-MORENO - In RE: Managed Care Litigation
Order granting provider track class certification and denying subscriber track class certification* (09/26/2002)

 

 

Aetna Settlement Approval  October 24, 2003, To view a copy of the Orders - Order 1 | Order 2

 

 

Aetna Reaches Agreement with Physicians, May 22, 2003

(Aetna.com)

 

CMA Settles with Aetna in Class Action Lawsuit

A Summary of the Settlement Agreement Prepared by CMA Attorneys

(calphys.org)

 

 

HMO-doctor suits seen persisting after Aetna deal
(Reuters via forbes.com)

 

Aetna to settle with doctors; other firms continue fight
(Baltimore Sun, MD)

 

Aetna Agreement With Doctors Envisions Altered Managed Care
 (New York Times; one-time registration required)

 

Excerpt: "Aetna, the big health insurance company, and medical leaders said yesterday that their agreement to settle a long-running lawsuit over billing and medical decisions promised a radical change in their often rancorous relationship and better treatment for patients."

 

ERISAclaim.com Comment: What appears to be the jackpot to the physicians and patients is going to be the moon in virtual reality if both sides do not understand what this agreement really means. Here Aetna has merely agreed to be fairer and more transparent as it clearly stated on Aetna's web site in compliance with new ERISA claim regulations, as reported by New York Times: "I would not say that certain things we said were not medically necessary — like a nose job — are now going to be medically necessary," said Dr. John W. Rowe, the chief executive of Aetna, in an interview yesterday. "What I would say is that it is going to be easier and less ambiguous to determine what meets the criteria of medical necessity". If physicians and health-care providers nationwide continue to ignore or fail to understand and to comply with new ERISA claim regulations in claim disputes, no agreement or promise will solve managed-care nightmares and solve health-care crisis in cutting skyrocketing health-care costs and improving access to quality health care in this country, especially when Aetna is nonfiduciary TPA for self-insured ERISA plans.

 

Although sincere intentions and unprecedented as well as positive changes are observed, the fatal flaws of this agreement, expected to be the leading and pioneering guidelines for the new era of health care industry, are the failures in "unambiguous and vigorous" recognition and promotion for immediate and nationwide compliance of ERISA claim regulations by each and every party in health care and employee benefits industry, including not only American employers, health insurers, health-care providers, American workers/patients and third party claim administrators/TPA's but also health-care attorneys, Federal and state health care and insurance regulators, because only good wishes and mutual expectations without fundamentally understanding and compliance of governing laws and regulations, ERISA, in health care and employee benefits claim practice will never be sufficient in fixing and reversing critically ill health-care and employee benefits industry.

 

 


 

Keogan v. Towers, Perrin, Forster & Crosby, Inc.,

 

The Employer Fined $64,900 in Statutory Penalty for Failing to Produce Plan Documents

 

Excerpt: "Section 502(c)(1) of ERISA states that the fine for an administrator’s failure to provide requested information shall be “in the amount of up to $100 a day.” 29 U.S.C. §1132(c)(1). Based on Towers’s inexcusable failure to provide Keogan with a copy of the January 1, 2000 Document (despite at least three requests from Keogan’s counsel for all plan documents), and in light of the erroneous assertion in Diljohn’s November 21, 2000, letter that the Answer Book was the plan document, the Court determines that a maximum daily penalty is warranted. At the rate of $100 per day, Towers has garnered a fine of $64,900. The Court will grant Keogan's motion and deny Towers's motion with respect to Keogan's claim for a statutory penalty under ERISA."

 

 


 

Court Case Emphasizes the Importance of Providing Requested Plan Documents (Faegre & Benson LLP)

 

Excerpt: "A recent Minnesota federal district court case (Keogan v. Towers, Perrin, Forster & Crosby, Inc., 2003 WL 21058167) awarded a disability plan participant nearly $65,000 in penalties under ERISA because the plan administrator/employer failed to provide the claimant with a copy of the applicable plan document."

 


 

 

 

Many HMO Lawsuits Melting Away (The Hartford Courant)

 

Excerpt: "Several health insurers, including Aetna, have quietly settled-- for token amounts-- a barrage of consumer lawsuits aimed at getting billions of dollars from the industry and an overhaul of managed care practices."
 

Aetna To Settle Suit By Doctors
(Chicago Tribune; one-time registration required)

 

Excerpt: "One of the nation's largest health insurers has agreed to settle a major class action brought by physicians and to overhaul business practices that doctors say have shortchanged patient care, according to sources close to the case.

 

The agreement also has ramifications for consumers because doctors say they often must charge more to make up the difference between their costs and what they are paid."


 

Tenth Circuit Finds 'Deemed Denial' Warrants De Novo Standard of Review (CCH Pension and Benefits News)

 

Excerpt: "The denial of a long-term disability plan participant's benefits by a plan administrator is subject to de novo review because it was a 'deemed denial' that was triggered by the plan administrator's failure to render a decision within the plan and ERISA's time limits, according to the U.S. Court of Appeals in Denver (CA-10)."

 


 

AMERICAN CHIROPRACTIC ASSOCIATION V. TRIGON HEALTHCARE, INC., 1:00CV00113, Issued - 4/25/03,

 

Excerpt: "For these reasons, the plaintiffs are unable to prove that the provider agreements with chiropractors breached any duty to avoid unconscionable terms. 20

IV

For the foregoing reasons, I will grant the defendants’ Motion for Summary Judgment and enter final judgment on their behalf. A separate judgment consistent with this opinion is being entered herewith."

 

Footnote:  "20 In view of my finding that there is inadequate evidence on the merits as to the state law claims, it is not necessary that I resolve the defenses that these claims are barred by the applicable statutes of limitations or preempted by ERISA." (Bold added)

 

ERISAclaim.com Comment:  This is another significant ruling from federal court in a class-action by chiropractic physicians nationwide against insurance industry, in the wake of U.S. Supreme Court unanimous ruling in PACIFICARE HEALTH SYSTEMS, INC. v. BOOK, favoring managed-care industry's argument that health-care providers class-action should pursue arbitration first prior to federal court actions, in responding to national class actions by health-care providers as a result of decades of managed-care nightmares and increasing conflicts between health-care providers and managed-care/health insurance industry.

In dismissing chiropractic physicians' claims, with footnote 20, the federal judge expressed his judicial wisdom in reminding providers of ERISA remedies being the prescribed legal
avenues for their claims.

 


 

Court Says Exempt Governmental Plan May Not 'Opt In' to ERISA Coverage (EBIA Weekly)

Michel v. United Healthcare of Louisiana, Inc. (E.D. La. 2003).

 

 


 

Chicago Foot Clinic v. United Healthcare

 

 


 

 

 

PACIFICARE HEALTH SYSTEMS, INC. v. BOOK

United States Supreme Court, Decided: April 7, 2003

 

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

 


 


AAHP: Supreme Court Ruling a Victory for Alternative Dispute Resolution in Health Care (4/7/2003)
 

 


 

 

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

 

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)

 

 


PRIMAX RECOVERIES v. SEVILLA, RICHARD (pdf)
Seventh Circuit

 

Excerpt:  "Anyway we have held that ERISA does not preempt common fund claims. Blackburn v. Sundstrand Corp., supra, 115 F.3d at 495."

 


 

Court Affirms Dismissal of Plan's Claim for Reimbursement Without State Common Fund Doctrine (EBIA Weekly)

 

 


 

TANGO TRANSPORT v HEALTHCARE FINCL SVC

 

A collection agency for a health-care provider with a valid assignment has derivative legal standing to sue for benefits from an ERISA governed group health plan.

 

Excerpt:  "In addition to following Hermann I, granting Healthcare derivative standing is also consistent with the Supreme Court's decision in Mackey, 486 U.S. 825 (1988). As we discussed supra, the Supreme Court in Mackey used similar reasoning when it held that ERISA's antiassignment/alienation provisions for pension benefit plans did not preclude a collection agency from attaching welfare benefit plans. Id. at 836. According to the Supreme Court, the absence of such anti-alienation protection with respect to ERISA welfare benefit plans must mean that the benefits of those plans are freely alienable. Id. at 837. Because ERISA-governed welfare plans are alienable, to hold that the original participant can alienate them, but that a subsequent assignee cannot, would make little sense. It is likewise nonsensical for an original health care provider assignee to receive both welfare benefits and the right to enforce them via derivative standing, but a subsequent assignee can receive only the benefits, but not the right to sue to enforce them.

 

........

 

Conclusion There is no express language in the statute that prohibits a health care provider who has a valid assignment from the plan participant or beneficiary to subsequently assign its rights to enforce an ERISA-governed employee welfare benefit plans. To read an anti-alienation provision into section 1132 of ERISA would hinder the underlying goals of ERISA and the effective provision of medical services. Healthcare has derivative standing to enforce the very same rights MBMC had as an assignee of Huff’s benefits. Accordingly, we REVERSE the district court’s holding that Healthcare does not have derivative standing and REMAND to the district court to determine the scope of Huff’s assignment to MBMC consistent with this opinion."

 

ERISAclaim.com Comment:

 

1. The 5th Circuit authorized the derivative standing for a sub-assignee of health-care provider, as a statutory beneficiary with derivative legal standing through a valid assignment from ERISA plan participant or beneficiary;

 

2. This 5th Circuit ruling is consistent with U.S. Supreme Court's decision in Mackey, 486 U.S. 825 (1988);

 

3. This 5th Circuit ruling is consistent with new ERISA claim regulation, § 2560.503-1(b)(4), the ERISA plan may not have anti-assignment to preclude health-care providers as an authorized representative, but it may verify such assignment, an extremely important protection for health-care providers and plan participant, as explained in DOL SUPPLEMENTARY INFORMATION on page 70255 (underline added):

"The proposal eliminated a provision in the 1977 regulation that seemed to imply that representatives of a claimant must be ``duly authorized'' to act on behalf of the claimant. This change reflected the perception of the Department that no single Federal standard governs the authorization of a representative and that claimants should be able to freely name representatives to act on their behalf. Many commenters representing employers and plans responded that elimination of the concept of an ``authorized'' representative could be read to require plans to accept anyone who claimed to be a representative of a claimant, without permitting plans to establish reasonable procedures to verify that status. This could prevent plans from protecting the privacy or other rights of claimants. The regulation responds to this concern by reinstituting a concept of authorization with respect to claimants' representatives.36 Specifically, subparagraph (b)(4) provides that a plan's claims procedures may not preclude an authorized representative (including a health care provider) from acting on behalf of a claimant and further provides that a plan may establish reasonable procedures for verifying that an individual has been authorized to act on behalf of a claimant. However, subparagraph (b)(4) requires a group health plan to recognize a health care professional with knowledge of a claimant's medical condition as the claimant's representative in connection with an urgent care claim.

 

\36\ This provision, which is a clarification of current law, applies to all employee benefit plans covered under the Act"

 

 


Health Plan & Provider Report - Health Care Provider's Assignee Can Sue  (BNA.com)

"The assignee of a health care provider who has a valid assignment from a health plan participant has derivative standing to bring a cause of action to recover benefits from an Employee Retirement Income Security Act-governed health plan, the U.S. Court of Appeals for the Fifth Circuit ruled March 12 (Tango Transport v. Healthcare Financial Services LLC, 5th Cir., No. 02-60284, 3/12/03)."

 


 

 

 

Proposed Cigna Settlement Transferred to Miami Judge (New York Times; one-time registration required)

 

 


 

CONOVER v. AETNA U.S. HEALTH CARE INC.

 

Excerpt:  "In sum, we conclude Gaylor still controls the resolution of this case. Oklahoma's bad faith law is not saved from preemption under Employee Retirement Income Security Act because it does not "regulate[] insurance." 29 U.S.C. § 1144(b)(2)(A). Oklahoma's bad faith law is therefore preempted because it "relate[s] to an employee benefit plan" and conflicts with the Employee Retirement Income Security Act's civil enforcement scheme. See 29 U.S.C. §§ 1144(a) and 1132(a). We AFFIRM the district court's decision."

 

 


 

 

CICIO v VYTRA HEALTHCARE

Cicio v. Vytra Healthcare (pdf)

 

ERISA Shield Gone: Medical Malpractice Lawsuit Can be Brought against Health/ERISA Plans If the Patient's Symptom and Treatment Specific Decisions Made by The Plan and Reviewer Physician.

 

 Excerpt:  "We therefore hold only that a set of facts consistent with the allegations contained in the complaint would permit the granting of relief -- oddly, in this case, remand to state court for a determination, inter alia, of whether the complaint states a cause of action under the law of New York. If Dr. Spears's actions that are the subject of the complaint indeed constituted a medical decision or a mixed medical and eligibility decision, then Ms. Cicio's remaining medical malpractice claims should not be dismissed, but remanded to state court for resolution. See Giordano v. City of N.Y., 274 F.3d 740, 754-55 (2d Cir. 2001). It may nonetheless be that, as a matter of fact, Dr. Spears's decision was purely one concerning eligibility, i.e., a determination that, without regard to Mr. Cicio's "constellation of symptoms" but in the abstract, double cell stem transplants were experimental as treatment for multiple myeloma. In that case, the claims would be completely preempted by ERISA and therefore subject to dismissal."

 

ERISAclaim.com Comment:   This is the best clarification and application of Supreme Court unanimous ruling in PEGRAM et al. v. HERDRICH:

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

Together with BUI v. AMERICAN TELEPHONE and Isaac v. Seabury & Smith, Inc. as well as New ERISA Claim Rules, ERISA loophole is closed or ERISA shield is gone.

 

With state cases on this "medical decision" issue, it would be clear this would a a medical decision under Murphy v. Board of Medical Examiners, 949 P.2d 530, 190 Ariz. 441, 247 Ariz. Adv. Rep. 35 (Ariz.App.Div.1 07/15/1997). The court concluded:  "Although Dr. Murphy is not engaged in the traditional practice of medicine, to the extent that he renders medical decisions his conduct is reviewable by BOMEX. Here, Dr. Murphy evaluated information provided by both the patient's primary physician and her surgeon. He disagreed with their decision that gallbladder surgery would alleviate her ongoing symptoms. S.B.'s doctors diagnosed a medical condition and proposed a non-experimental course of treatment. Dr. Murphy substituted his medical judgment for theirs and determined that the surgery was "not medically necessary." There is no other way to characterize Dr. Murphy's decision: it was a "medical" decision."

 

Sadly and ironically neither side of Patients' Rights advocates and debaters truly understands the critical mechanisms and significance of this case, as they did contradictorily and oppositely  in initially hailing and complaining about the U.S. Supreme Court ruling in PEGRAM et al. v. HERDRICH.

 


Precedent allows medical malpractice claims against HMOs (BenefitNews.com)

 

 

2d Circuit: Certain Mixed Eligibility/Treatment Decisions Raise State-Law Malpractice Claims (Thompson Publishing Company)

 

 

Federal Appeals Court Says Patients Can Sue Health Plans for Medical Malpractice (KaiserNetwork.org)

 

 

US Appeals Court Expands Patients' Rights Over HMO's
New York Times - 17 Feb 2003

 

2d Circuit Court of Appeals Decision Recognizes Patients' Right to Sue HMO for Medical Malpractice (New York Times; one-time registration required)

 

 

Insurers That Refuse Treatment Can Be Sued - Salt Lake Tribune

 

 

HMO Can Be Sued for Denial - Newsday 

 

 


 

Wal-Mart Health and Welfare Plan v Jean Hummell

 

ERISA Subrogation/SPD Provision Supersedes Illinois Common Fund Doctrine

 

Abstract: "These are cross-motions for summary judgment in a dispute between a Wal-Mart health and welfare plan (“the Plan”) and an employee – Jean Hummell – covered under the Plan. Hummell was injured in an accident, and the Plan paid $16,698.10 in medical benefits on her behalf. She subsequently retained a lawyer to prosecute a personal injury case. The attorney, working on a one-third contingency fee, secured a settlement (after the second day of a jury trial) in the amount of $150,000. The lawyer offered to reimburse the Plan for its expenses but only after deducting one-third of the amount to compensate him for securing the recovery. The offer was refused, but there was agreement by Hummell’s lawyer to keep the full amount in his client trust fund account until a final judicial decision was made on the question of the lawyer’s entitlement to any part of the amount now held in the trust account. This issue has arisen from time to time in this and other courts."

 

"Subrogation is when Wal-Mart pays your medical charges relating to your accident while waiting for the responsible party to settle. Repayment to the Plan of 100% will be made at the time the settlement is received by the associate, dependent, or their attorney."

 

"Therefore, I agree with Judge Reinhard on the merits. There is too much support for the proposition that state law cannot void explicit and lawful provisions in ERISA plans."

 

"For the reasons above, the plaintiff’s Motion for Summary Judgment [7-1] is GRANTED. The defendant’s Motion for Summary Judgment [8-1] is DENIED."

 

ERISAclaim.com Comment: This case ruling will be a big surprise to those personal injury practitioners, especially in the state of Illinois. After Supreme Court ruling in GREAT-WEST LIFE & ANNUITY INS. CO. v. KNUDSON, boxing ring hasn't been quiet in ERISA Subrogation/reimbursement litigation in connection with personal injury settlement, common fund doctrine, and "make whole" application. In this case, $16,698.10 in medical expenses the Wal-Mart ERISA plan advanced and subrogated is much smaller than the one-third of $150,000 in personal injury settlement, however with Wal-Mart anti-make-whole" provision in SPD", if a personal injury settlement is equal or less than medical expenses the ERISA plan paid health-care providers, the personal injury attorney may end up working free as an ERISA plan subrogation contributor. Maybe every personal injury practitioner should have done what Wal-Mart argued and advised in this case:

"...they say, a lawyer, who should know of the possible constraints on fees, can get a copy of the Plan and, if it precludes fees, can tell the prospective client that recovery will be reduced by costs and by reimbursement to the plan, and that the fee will be one-third of what remains".

Personal injury practitioners should obtain a copy of SPD from every ERISA plan from the beginning of any personal injury case and study ERISA to avoid working for free.

 

 


 

 

Scaglione v. CIGNA HealthCare of St. Louis Inc.

 

Court Overturns Claim Denial Because of Inconsistent Decisions on Similar Claims (EBIA Weekly)

 


 

DARLAND v. FORTIS BENEFITS INS



 
Excerpt:       "Applying the treating physician rule in this case, the district court should have deferred to the opinions of Darland's treating physicians absent substantial evidence in the record contradicting those opinions. Here, there was medical evidence conclusively showing that Darland could not perform all the material duties of his job as an executive vice president of Market Finders. Although Fortis' second peer review panel concluded that Darland could perform all the material duties of his position, the views of these non-treating and non-examining medical consultants hired by Fortis were unduly speculative, as there was nothing in the record to indicate that Darland could stand or sit for prolonged periods of time. Quite to the contrary, the medical opinions of the physicians who actually examined or treated Darland substantiated his disability under the terms of the Fortis policy."

 


 

 

CORPORATE HEALTH INSURANCE, INC. vs. TEXAS DEPARTMENT OF INSURANCE

 

Excerpt: "In sum, the Moran opinion requires that our opinion be modified in part. We hold that the IRO provisions of the Texas statute are not preempted by ERISA because they are within the saving clause of ERISA and do not offer an additional remedy in conflict with ERISA’s exclusive remedy. Because self-funded ERISA plans are not covered by ERISA’s saving clause, ERISA preempts any application of the IRO provisions to self-funded plans.
Accordingly, we REINSTATE our opinion as modified herein."

 

ERISAclaim.com Comment:  This ruling finally settles ERISA preemption of Texas IRO for fully insured ERISA group health plans, and seemingly precludes application of Texas IRO to self-funded ERISA plans. However from practical standpoint, under New Federal Claim Regulations, § 2560.503-1 (k)(2) & (h)(3)(iii), self-funded ERISA plans must comply with state laws in utilization review to the extent that if any utilization review is conducted by a person or entity other than plan sponsor, and employer and plan fiduciary, AND plan must consult with a health-care professional who has appropriate training and experience in the field of medicine involved in the medical judgment consistent with state laws. The New Claims Procedure, after its effective date of January 01, 2003, will automatically require compliance with state laws involving  medical judgment, and will make this argument practically moot.

 

1. § 2560.503-1 (k)(2) [page 70270, New] ERISA does not preempt state laws so long as utilization review or independent external review is conducted by a person or entity other than plan sponsor or fiduciary, but a plan sponsor or fiduciary won't and shouldn't decide medical necessity/medical judgment on utilization and external reviews because of potential medical malpractice liability, such as in BUI v. AMERICAN TELEPHONE and Isaac v. Seabury & Smith, Inc.


2. § 2560.503-1 (h)(3)(iii) [page 70270] self-funded plan and its fiduciary shall consult with a health-care professional, independent to the plan, registered, licensed or certified with state for utilization and external reviews, in more than 40 states, if benefits determination involves medical judgment, the independence and de novo requirements for health-care professionals under ERISA are similar or more stringent than state laws, a full and fair review requires at least two levels of appeals with two health-care professionals, § 2560.503-1 (h)(2)(iv) [page 70269] licensed, accredited or certified to perform specified health services consistent with state law . § 2560.503-1 (m)(8) [page 70271]


3. § 2560.503-1 (b)(3) [page 70266] ERISA Plan Procedure prohibits imposing a fee or costs as a condition to making a claim or to appealing, including fiduciary obligation to consulting with a health-care professional, the reviewer could not be an agent of a self-funded ERISA plan. Under footnote 35 [page 70255] A State Law requirement for fully-insured ERISA plan carrier to provide funds to pay for the review will not qualify the reviewer as an agent of an insurer.


4. Under New Claim Regulations, a self-funded plan must comply with Full and Fair Review requirements by initiating compliance demand from ERISA to state law, in utilization and external reviews as well as applicable state law in scope of practice in licensing and regulations, while fully-insured group health plans must comply with both ERISA and state laws simultaneously under dual federal and state jurisdictions, the practical outcome and actual process are the same except for insignificant compliance mechanisms.

 

 


 

 

HAYNES v PRUDENTIAL HEALTH

 

 

"CONCLUSION Though the end result of Haynes losing part of his leg is tragic, his claim is based solely on the administration of his health benefits. A review of recent Supreme Court jurisprudence reflects that such a claim is expressly preempted by ERISA. For the foregoing reasons we AFFIRM the district court’s dismissal."

 

 

ERISAclaim.com Comment:    Apparently the end result of this case is a tragedy, that no remedy could have restored the life quality of this ERISA plan participant and patient. As the court reasoned that the decision is purely based on administrative function of ERISA plan, even end result is tragic medical consequences, pure treatment/medical end result, ERISA preempts a negligent claim solely based on pure eligibility determination made under ERISA claim procedure and specific plan SPD. It appears tragedy specified in this case may not be anyone's fault, health-care professionals did not appear to have deviated from medical standard practice, ERISA plan/fiduciary did not seem to have made any medical decisions on medical necessity or pre-existing condition, even with punitive damage remedies available under the state laws, health-care professionals could not have been liable in any way, ERISA plans did not have doctor-patient relationship and made no medical decisions.

It is the ERISA claim regulations and understanding, compliance and enforcement of ERISA claim regulations by every one that could have prevented this type of tragedy from ever happening in the first place on land of ERISA in U.S.A.. The health-care providers should not have to wait for any approvals or prior authorizations, and ERISA plans will never be allowed to require prior authorizations under this type of circumstances-"urgent care" circumstances.

It is extremely important for everyone, insurers, ERISA plans, TPA's, managed care organizations and health-care providers to understand that New Federal Claim Regulations provide practical solutions to avoid, to prevent, and to minimize any tragedies such as described in this case. If the case/medical condition involves an urgent care, pre-certification or prior authorization will not be required by any ERISA plans, health-care providers SHOULD NEVER wait for such nonmedical approvals before rendering immediate medical care to prevent loss of life and any damages to any patient health, and only if health-care providers and ERISA plans are fully convinced, fully committed with full understanding of New ERISA Claim Regulations.

ERISA § 2560.503-1, (b)(3) [[Page 70266]]

"(b) Obligation to establish and maintain reasonable claims procedures.
 

  Every employee benefit plan shall establish and maintain reasonable procedures governing the filing of benefit claims, notification of benefit determinations, and appeal of adverse benefit determinations (hereinafter collectively referred to as claims procedures). The claims procedures for a plan will be deemed to be reasonable only if--

.....


(3) "The claims procedures do not contain any provision, and are not administered in a way, that unduly inhibits or hampers the initiation or processing of claims for benefits. For example, a provision or practice that requires payment of a fee or costs as a condition to making a claim or to appealing an adverse benefit determination would be considered to unduly inhibit the initiation and processing of claims for benefits. Also, the denial of a claim for failure to obtain a prior approval under circumstances that would make obtaining such prior approval impossible or where application of the prior approval process could seriously jeopardize the life or health of the claimant (e.g., in the case of a group health plan, the claimant is unconscious and in need of immediate care at the time medical treatment is required) would constitute a practice that unduly inhibits the initiation and processing of a claim;"

 

ERISA § 2560.503-1, (m)(1) [[Page 70271]]

"(m) Definitions. The following terms shall have the meaning ascribed to such terms in this paragraph (m) whenever such term is used in this section:
    (1)(i) A ``claim involving urgent care'' is any claim for medical care or treatment with respect to which the application of the time periods for making non-urgent care determinations--
    (A) Could seriously jeopardize the life or health of the claimant or the ability of the claimant to regain maximum function, or,
    (B) In the opinion of a physician with knowledge of the claimant's medical condition, would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim."
 


 

 

Sunderlin v. First Reliance Std. Life Ins. Co.

 

Insured Plan Sponsor to Pay $17,000 Penalty for Failure to Furnish SPD (EBIA Weekly)

 

 


 

 

CIGNA HealthCare Reaches Agreement with Physicians to Improve Relations and End Lawsuits (PR Newswire via NewsAlert.com)

 

Press release. Excerpt: "CIGNA HealthCare announced today that it has reached an agreement to resolve bill payment claims brought on behalf of physicians and other health care providers in state and federal courts.... As part of the agreement, Appoint a third-party administrator to review certain claims that were denied since January 1, 1996, to determine whether they should be paid ..."

 

 


 

 

 

Richard B Roush Inc v. New England Mutl
Three-year ERISA statute of limitations


Under the three-year ERISA statute of limitations for a claim for breach of fiduciary duties, the exact date on which the cause of action accrued does not commence until the claimant has "actual knowledge" of an ERISA cause of action.

 


BUI v. AMERICAN TELEPHONE

 

Excerpt: "CONCLUSION    ERISA does not preempt claims of medical malpractice against medical service providers for decisions made in the course of treatment or, in this case, evaluation. That is true even if those medical service providers also serve, at other times, as administrators. Accordingly, summary judgment on preemption grounds may not be granted as to Bui’s claims against SOS and as to her claims against Lucent for negligence based on Lucent’s failure to reveal the expedited passport procedure and for negligence and delay in the provision of medical advice, at least on the record as it currently stands. We reverse and remand as to those claims. Summary judgment on preemption grounds was appropriately granted as to the remaining claims against Lucent and as to all the claims against AT&T. We affirm as to those claims."

 

ERISAclaim.com Comment: As Supreme Court ruled in PEGRAM et al. v. HERDRICH, only pure eligibility/coverage determination is fiduciary function under ERISA, pure treatment decisions or mixed treatment and eligibility decisions are not fiduciary functions under ERISA.  A medical decision made by service providers in the course of the administrating an ERISA plan is a pure treatment function or mixed treatment and eligibility function at least, not a fiduciary function under ERISA, therefore subject to state standards instead of federal standards, and not subject to ERISA preemption. This ruling is significant for any decisions made by TPA's in pre-certification, prior authorization, medical necessity reviews and case management in connection with medical treatment for any ERISA plans.

 


 

Connecticut General Life Ins. Co. v. Ins. Comm'r for Maryland

Maryland's Highest Court Finds State's External Review Law Not Preempted by ERISA

Excerpt: "In this opinion, the highest court in the state of Maryland followed the U.S. Supreme Court's recent decision in Rush Prudential HMO v. Moran to uphold Maryland's external review law against the preemption challenge of an insurer targeted by the state insurance commissioner for enforcement under the law.... Over 40 states have enacted external review laws ..."   (EBIA Weekly)
 


 

Holy Cross Hosp v.   Bankers Life

 

ERISA v. PPO contract dispute.


 

Transitional Hospitals Corp. of La., Inc. v. Advantage Health Plan, Inc., Civ. No. 01-2200 (E.D. La. 10/17/02).

Hospital's State-Law Misrepresentation Claims Against ERISA Plan Are Not Preempted by ERISA (EBIA Weekly)

Excerpt: "As group health plans scramble to finalize claims procedures that comply with the DOL's new regulations, it bears remembering that the vast majority of group health claims are made, not by plan participants and beneficiaries, but by medical service providers like the hospital that was the plaintiff in this case."
 


VENCOR HOSPITALS v. AETNA LIFE INSURANCE COMPANY

 

Excerpt: "Conclusion:    Aetna has moved for summary judgment, arguing that Plaintiff Vencor’s state law claims must be preempted by ERISA. Vencor counters that ERISA does not preempt such claims because they arise independently of the underlying benefits plan and Vencor has not sought to enforce or expand any benefits under the plan. As set forth in our discussion above, we find that (1) Vencor’s state law claims are not preempted by ERISA, but (2) Vencor cannot maintain a claim for negligent misrepresentation because Indiana does not recognize such cause of action. Accordingly, we grant in part and deny in part Aetna’s motion for summary judgment."

 


 

Romero v. SmithKline Beecham

Document Request to "Those under the Administrator's Supervision" Was Sufficient Request for ERISA Documents under § 502 (c) (1).

 

Excerpt: "Second, because section 502(c)(1) requires a response within a rather short time (30 days) "after [the] request," the statute appears to contemplate that the request will be delivered in a manner that permits the administrator or the appropriate subordinates to work on the matter soon after the request is made. Accordingly, we believe that the 30-day period should not begin to run until the request is actually received either by the administrator or those under the administrator’s supervision. This requirement, we conclude, provides adequate protection for an administrator in a situation in which a request for information is not delivered or sent directly to the administrator."


ERISAclaim.com Comment: This case may suggest that document request to any individuals under the Plan Administrator's Supervision, Including TPAs, shall be sufficient request for ERISA plan documents, especially SPD requirements, under § 502 (c)(1), especially under new DOL claim regulations, when a TPA was involved in fiduciary decision making.

 

 


 

Parke v. First Reliance Standard Life Ins. Co.

Overpayment Recoupment or "Over-Delay Rrecoupment"?

 

ERISAclaim.com Comment: Contrary to the present popular practice in managed care industry faced by providers for overpayment recoupment and recent Supreme Court ruling in Great-West v. Knudson, regarding the enforcement of the subrogation/reimbursement rights under ERISA, this case provides a new twist from plan participant in seeking "over-delay recoupment" under ERISA from the plan. The court reasoned in this case: "By not awarding her benefits during the periods which she claims were rightfully owed to her, [the plan] made a profit on that money in the form of interest earned. [The participant] merely seeks to have [the plan] disgorge the interest it earned on the money due to her". "Over-delay recoupment", the award of interest was an equitable remedy recoverable under ERISA Section 502.

 

Excerpt: "ORDER      Based on the submissions of the parties, the arguments of counsel, and the entire file and proceedings herein, IT IS HEREBY ORDERED that:

 

1. Defendant shall pay to the plaintiff interest on delayed benefits in an amount to be determined by the Court. In order to make this determination, plaintiff shall submit within ten (10) days of this Order a brief which sets forth the amount of interest it claims is owe d for the two time periods in question. Defendant may respond ten (10) days after the plaintiff’s submission.

2. Within thirty (30) days of this Order, Plaintiff shall submit a brief and affidavit(s) setting forth the attorney’s fees and costs it expended prosecuting this lawsuit and during the administrative process. Defendant may respond within thirty (30) days after receipt of the plaintiff’s submission."


 

Court Awards Interest on Improperly-Delayed ERISA Benefits, Relies on Knudson Case (EBIA Weekly)


 

Shepley v. New Coleman Holdings

 

 "the district court reasoned, "turns on the word 'overpayment'" in Section 9.2(c). The district court defined the word as "payment in excess of what is due" (citing Webster's Third New International Dictionary (1986)) and found "that a return on an investment does not constitute an 'overpayment.'" Because "the surplus assets in the Plan resulted from a high return on monies invested in the Plan, not from excess money contributed to the fund," the district court concluded that the surplus did not result from "overpayment," and therefore that Coleman was not entitled to the surplus."

 


 

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS
HEALTH AND WELFARE FUND v. NEUROBEHAVIORAL ASSOCIATES, P.A.,

Excerpt: "Central States provided medical coverage to Fred Piert and his daughter Tammy. On September 14, 1992, Tammy Piert received medical treatment from Neurobehavioral for which Neurobehavioral submitted to Central States a claim for $100.00. A clerical error in Central States' processing of the claim resulted in payment to Neuro-behavioral for $10,000. Upon discovering the error, Cen-tral States requested that Neurobehavioral return the $9,900 excess payment./1 Neurobehavioral refused."

 


 

Dandurand v. Unum Life Ins. Co. of America

No Recoupment for Insurer That Mistakenly Overpaid Disability Benefits for Four Years [EBIA WEEKLY]

 


Bailey v. CIGNA Ins. Co.

SPD Trumps Conflicting Language in Plan Enrollment Guide
(EBIA Weekly)

Excerpt: "[A]lthough the Enrollment Guide did not specify a limit on the number of physical therapy sessions that were covered annually, the SPD did. Under ERISA, when there is a conflict between a plan's SPD and the terms of the policy itself, the SPD's terms will control. The court held that the Enrollment Guide did not meet the requirements of an SPD and therefore did not bind the claims administrator."


Spanos v. TJX Companies, Inc.,

Who may decide the appeal?  "there is nothing in the SPD which even mentions, let alone gives, any authority whatsoever to [the insurer's appeals committee]"


 

CAFFEY v. UNUM LIFE INS CO

Excerpt: "On appeal, Caffey argues: (1) that the district court erred in ruling that her state-law claims were preempted by ERISA; (2) that the district court erred in finding that she was not entitled to certain equitable relief; (3) that the district court erred in failing to impose a statutory penalty for UNUM's failure to supply certain plan information on request; (4) that the district court erred in its calculation of prejudgment interest; (5) that the district court erred in declining to award postjudgment interest on its award of legal fees and prejudgment interest; (6) that the district court's findings of fact concerning UNUM's bad faith were in error; and (7) that the district court omitted one month's payment of disability benefits in calculating its award. After reviewing the briefs and the record of the proceedings below, we determine that the district court erred only in failing to order payment of postjudgment interest on its prejudgment interest and attorney fees awards. We therefore AFFIRM IN PART, REVERSE IN PART, and REMAND to the district court solely for the purpose of entering an appropriate award for postjudgment interest."

 

" We reversed the district court's grant of summary judgment to UNUM. Caffey, 1997 WL 49128, at *3. We noted that the district court improperly placed the burden of proof on Caffey, whereas ERISA places the burden of proving an exclusion from coverage in an ERISA-regulated welfare plan on the plan administrator. Id. We further concluded that genuine issues of material fact existed as to whether the similarity between the symptoms reported by Caffey in August 1989 and those reported in the summer of 1990 established that Caffey's lupus was a pre-existing condition."

 

"III. CONCLUSION     Based upon the foregoing discussion, we AFFIRM the district court's rulings in all respects but its failure to order payment of postjudgment interest. We therefore REVERSE IN PART and REMAND to the district court for the limited purpose of entering an appropriate award for postjudgment interest."


 

Isaac v. Seabury & Smith, Inc

Excerpt: "This is a case of first impression in our circuit. It ultimately turns on the proper interpretation of Pegram v. Herdrich, 530 U.S. 211, 120 S.Ct. 213.23, 13.27 L.Ed.2d 164 (2000). The parties have crystallized the issues in well-prepared briefs. Based on our reading of Pegram and the parties’ submissions, we conclude that the claims alleged in the complaint arise in an area that is not occupied by ERISA so that the case was improvidently removed. In other words, plaintiff’s complaint is not subject to complete preemption by ERISA. Accordingly, we GRANT plaintiff’s motion to remand and DENY defendants’ motion for summary judgment."

 

ERISAclaim.com Comment:   This case explained and answered the one of the most important and complicated questions, what is or isn't an ERISA issue in health care claim denials and dispute, in accordance with most recent U.S. Supreme Court ruling in Pegram et al. v. Herdrich: "Held: Because mixed treatment and eligibility decisions by HMO physicians are not fiduciary decisions under ERISA,...." (ERISA issue). Only pure eligibility/coverage decision is fiduciary function (ERISA issue). "Mixed treatment and eligibility decisions" or mixed quality (medical) and quantity (coverage) decisions are not ERISA issues, not subject to ERISA preemption, but subject to state law cause of actions and remedies, including medical malpractice, consumer fraud protection and punitive damages/bad faith. In managed care world, most medical necessity determination, utilization review, pre-certification, case management and discharge decisions are such mixed treatment and eligibility, mixed quality and quantity decisions, subject to the state law causes of action. This case ruling is extremely important for anyone with concerns of managed care debate, legislation and benefits administration.

 

TPAs Can Make Mixed Eligibility/Treatment Decisions That Subject Them to State-Law Challenges (Thompson Publishing Group)

 

    Excerpt: "A federal district court ruled that third-party administrators (TPAs) can be subject to state-law claims if they use health care providers to make medical necessity determinations; such determinations would be classified as mixed eligibility and treatment decisions."


 

Cicio v. Vytra Healthcare

Health plan on trial: Decisions bring responsibility
"A New York lawsuit presents a major test of how health plans can be held accountable for their treatment decisions."

 

Excerpt: "Mixed eligibility and treatment decisions" is a rather bland and bureaucratic combination of words that may nevertheless hold the key to much greater accountability by managed care plans for their meddling in patient care. The outcome of an appeal before the 2nd U.S. Circuit Court of Appeals in New York is expected to signal just how powerful those words might be."


 

N.Y. case raises question of health plan accountability

 


 

Moran Ruling Could Spur Increased Health Costs for Plan Sponsors (PDF) (Gardner Carton & Douglas)

Excerpt: "The recent U.S. Supreme Court decision in Rush Prudential HMO, Inc. v. Moran held that ERISA does not preempt an Illinois law allowing for an independent review to resolve disputes over the necessity of medical treatments."


 

MARK FRITCHER v. HEALTH CARE SERVICE CORPORATION

 

Excerpt: "HCSC also points to language in its "Administrative Services Agreement" ("ASA") between HCSC and MMMA as evidence that HCSC enjoys "discretion" under the terms of the "Plan." There are two problems with this argument. First, the language cited—"the Claim Administrator in its sole discretion reserves the right to pay any benefits that are payable under the terms of this Agreement directly to the Covered Employee or to the Provider of the service"—has nothing whatever to do with discretion in awarding benefits. It simply provides that HCSC can pay whomever it wishes in the first instance for services rendered. This court has expressly held that discretionary language appearing in a non-relevant passage of an ERISA plan "does not grant the administrator discretion to determine eligibility for benefits." Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 539 (7th Cir. 2000)."

 

".....Dr. Fucik, the HCSC employee who was largely responsible for the benefit reduction, admitted that the periodic monitoring of the oxygen content in Lucas’ bloodstream was a skilled service, (R. at 585), and that the periodic monitoring of Lucas’ breathing was a skilled service. (R. at 625.) He further admitted that his own notes reflected the fact that Lucas was receiving "a scattering of skilled services" that were "being provided during approximately 18 hours per daily nursing services." (R. at 581; Dep. Ex. Fucik #3). Dr. Fucik also admitted that he ignored the frequency of Lucas’ seizures when making his determination, (R. at 587), even though the nurses’ reports—the same ones that Dr. Fucik claimed to have reviewed while making his determination (R. at 541, 548)—showed that Lucas frequently had seizures. (Def.’s Ex. #50.) ....."

 

"IV. CONCLUSION

We hold that the district court’s decision to grant the plaintiffs’ motion for summary judgment was proper, as was the district court’s award of attorney’s fees, costs, and prejudgment interest."


 

HALL v. UNUM LIFE INSURANCE COMPANY OF AMERICA
 

Excerpt: The court properly considered evidence of surgeries occurring after filing of an ERISA suit, though such evidence was outside of the administrative record relied upon by an ERISA plan administrator when it terminated benefits " (FindLaw.com)

 


 

HICKMAN v. GEM INSURANCE COMPANY, INC.

 

Excerpt: "In the policies, the term "Usual and Customary" is defined as:
        
                   . . . (t)he currently prevailing charge made for a medical
                   service or item by a majority of health care providers of the
                   same discipline [or] type within the same geographical area as
                   determined by the Company. (emphasis supplied) 
       
The policies clearly stated that benefits were not provided for "charges which are in excess of Usual and Customary."

 

"We AFFIRM the district court's grant of summary judgment to the defendant."


 

Court Upholds Insurer's Determination of "Usual and Customary" Charges (EBIA Weekly)


 

Court Enforces Plan-Imposed Time Period for Filing Suit Despite Lack of Denial Notice Under DOL Regs (EBIA Weekly)


 

Rosenbaum v. UNUM Life Ins. Co.

Pennsylvania District Court Judge OKs Bad Faith Claim Against Long-Term Disability Carrier (PLANSPONSOR.com)

 

Trial Court Allows State-Law Bad Faith Claim to Proceed Against ERISA Plan Insurer (EBIA Weekly)

Excerpt: "The [federal district] court found that the Pennsylvania bad faith statute for insurance claims fell within ERISA's savings clause, which exempts from preemption any state law that regulates insurance.... EBIA Comment: This is yet another case in a litigation trend that could make ERISA administration more troubling and costly for insurers."


 

Employer's Procedures for Distributing SPDs Enough to Prove That Employee Received It (EBIA Weekly)

 

Hunter v. Lockheed Martin Corp. (N.D. Ca. 2002).

Excerpt: "[U]nder the terms of the plan, the participant was eligible for benefits only if she submitted a claim within two years of being laid off.... The participant then brought suit, claiming that she had never been provided with a summary plan description (SPD) or any other information about the terms of the disability plan."
 


 

Jean Hummell  v. Yellow Freight Systems, Inc.

 

Excerpt: "After plaintiff Jean Hummell settled a personal injury claim arising out of a car accident with defendant Yellow Freight Systems, Inc. for the sum of $150,000, an issue remained as to a claim for reimbursement of the defendant/counter-plaintiff Administrative Committee of the Wal-Mart Stores, Inc. Associates’ Health and Welfare Plan (the "Plan") for medical benefits the Plan previously paid in the amount of $16,698.10."

"For the foregoing reasons, plaintiff’s motion to remand [4-1] is GRANTED."


 

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

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

 


 

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."
 


 

BERGT v. THE RETIREMENT PLAN (pdf)

 

Excerpt:  "OPINION      Neil G. Bergt ("Bergt") appeals the lower court’s summary judgment order denying him retirement benefits covered under the Employment Retirement Income Security Act, 29 U.S.C. §§ 1001 et. seq. ("ERISA"). The central question in this case is how to interpret an ERISA plan when the provisions of the plan master document are more favorable than, and conflict with, the statements of the plan summary. This Circuit has provided little guidance on this issue. The lower court held these conflicting provisions, when considered together, created an ambiguity that allowed the court to consider extrinsic evidence to determine the meaning of the ERISA plan. We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse."

 

ERISAclaim.com Comment: When Summary Plan Description (SPD) of an ERISA Plan is conflicting with plan master document, and plan master document is more favorable to plan participant, unambiguous plan master document supersedes Summary Plan Description (SPD) and interpretation of such plan documents is made against document drafter, eligibility and benefits are allowed.  It is extremely important to request for plan master  document in addition to SPD after claim for benefits is denied.  This is consistent with 7th Circuit ruling in PAMELA HERTEL MERS v MARRIOTT INTL GROUP ACCIDENTAL DEATH AND DISMEMBERMENT PLAN, discussed below on this page.

 


 

HOTZ v. BLUE CROSS
ERISA, PROMPT PAY Law

 

Excerpt:  "In March 2001, Marjorie Hotz brought suit in state court against her health insurer, Blue Cross and Blue Shield of Massachusetts ("Blue Cross"). Hotz claimed that Blue Cross violated a state law prohibiting unfair claim settlement practices by insurance companies, see Mass. Gen. Laws ch. 176D, § 3(9) (2000), when it waited nearly three months before approving payment for a course of follow-up therapy recommended by her physician after the removal of her cancerous tonsil. Hotz alleged that Blue Cross's delay caused her condition to worsen and sued under Mass. Gen. Laws ch. 93A, § 9(1) (2000), which was amended in 1979 to extend its private remedies provisions to violations of chapter 176D, § 3(9) (2000). (1)"


"Because a claim against an insurer for unfair claim settlement practices involves a "benefit" under ERISA, removal jurisdiction was proper; claim is preempted by ERISA and does not fall under the "saving clause" exempting any state law that regulates insurance." from FindLaw.com

 

ERISAclaim.com Comment: This case has possibly answered one of the most popular questions: is the state law requiring prompt pay preempted by ERISA? Or does a group health insurer for private sector have to comply with state prompt pay laws? Based on this case ruling, the answer is no. The first point that most physicians and health-care providers as well as patients have failed to realize or understand is that a group health insurance plan insured through an insurance policy offered to private sectors is an ERISA plan. (Health insurance through employment in private sectors = ERISA). The second point is that if ERISA preempts state prompt pay laws, the answer from this ruling is clearly no. For the second point, most state Department of Insurance regulators are not sure as to what exactly is the answer. In this case, the plaintiff challenged improper claim practice act found in most state statutes relating to insurance industry, although the case does not specifically challenged the delay under prompt pay laws for unreasonable delay of claim payment. This case does not challenge any medical decision making in the context of benefits payment delay, or mixed treatment and eligibility determination. It appears it is a pure coverage or benefits determination dispute. It also inevitably makes it important that health-care providers nationwide must pay attention to the new federal claim regulation for timely payment protections, which regulates about 80% of health-care claims in the U.S..

 


 

MOGCK v. UNUM LIFE INSURANCE (pdf)
Contracts, ERISA, Injury and Tort Law, Insurance Law, Labor & Employment Law


"Where an insurer, in its correspondence to its insured, did not utilize language from its own policy which would inform the insured that the contractual time limitation for legal proceedings would begin to run, such a limitation was never rendered operative and did not run in an insured's action for disability benefits."
from FindLaw.com

 


 

 

LISA HOWARD v COVENTRY HEALTH CARE (pdf)
ERISA, Health Law


"The Women's Health and Cancer Rights Act does not create a private right of action which would permit a plaintiff to maintain an action for tortious breach of a statute. Also, plaintiff's state law claims that her insurance plan's failure to cover the costs of breast reconstruction surgery violated Iowa public policy, were a breach of contract, and done in bad faith, were all preempted by ERISA."
from FindLaw.com


 

DeBartolo v. Piano Molding CoP, et al.

 

Excerpt: "Anti-Assignment Clause
The Seventh Circuit has held that "[o]nly if the language of the plan is so clear that any claim as an assignee must be frivolous is jurisdiction lacking." Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991). Further, the possibility of direct payment in a health benefits plan is enough to establish subject-matter jurisdiction, notwithstanding an anti-assignment clause. Id at 701; see also Hosp. Group of Ill. v. Comm. Mut. Ins. Co., No. 94 C 1351, 1994 WL 713.2598, at *2 (ND. Ill. Dec. 21, 1994). The Plan in this case provides in pertinent part: "[n]o covered person shall have the right. . to assign. . . any payments under the plan. .. .. Any covered person, however, may authorize the Company to pay benefits under the plan directly to the person or organization on whose charges a claim is based." Because the Plan allows for direct payment, DeBartolo's claim as an assignee cannot be deemed "frivolous" and he therefore has standing to bring this claim."

 

ERISAclaim.com Comment: " 'Because the Plan allows for direct payment, DeBartolo's claim as an assignee cannot be deemed "frivolous" and he therefore has standing to bring this claim.' Ambiguous and hidden anti-assignment clause contained in group insurance policies and ERISA plan documents is the main hurdle for physicians to claim benefits under ERISA. This ruling has certainly make this issue much more favorable to physicians under ERISA, about 80 percent of health-care claims in U.S.. This ruling also illustrates the importance of ERISA claim denial and appeals by physicians. Exhaustion of administrative remedy/appeals is the prerequisites of successful claims dispute/lawsuit. For more specific details and how to complete sophisticated and sufficient appeals by health-care providers, please refer to "ERISA for Physicians".


 

HOOVER v. PROVIDENT LIFE

 

Excerpt: "The district court reversed Provident's decision to terminate Hoover's benefits. The court noted that although Dr. Roseman did not totally endorse Dr. Vinson's assessment, he did not refute it. In addition, Dr. Roseman had suggested further testing, which was never pursued by Provident. It then explained that opinions by treating physicians are to be accorded more weight than non-treating physicians and Provident had failed to present sufficient proof for discounting the opinions of Hoover's treating physicians. The court also noted that Provident was operating under a conflict of interest and that such conflict must be taken into consideration when reviewing this type of benefit determination. Finally, it noted that the administrative record was void as to the credentials, qualifications and specializations of Provident's Drs. O'Connell, Geer and Blalock. Accordingly, it concluded that the denial of benefits was arbitrary and capricious because it was not supported by the evidence in the administrative record. The district court later awarded Hoover attorneys' fees and prejudgment interest."

 

"The evidence presented in the administrative record did not support the denial of benefits when only Provident's physicians, who had not examined Hoover, disagreed with the treating physicians. Under these circumstances, the district court's decision to reverse Provident's denial of residual benefits to Hoover was correct and it is obvious that no other result was possible had the de novo standard of review been utilized."

 

ERISAclaim.com Comment: Significantly to health care providers, the court conclusion that "Finally, it noted that the administrative record was void as to the credentials, qualifications and specializations of Provident's Drs. O'Connell, Geer and Blalock." has provided greatest guidance for physician's appeal demanding disclosure of credentials, qualifications and specializations of reviewing physicians employed by insurance companies in reviewing denials, a title of "Dr." will not satisfy ERISA requirements. More importantly, new ERISA Claim Regulation/Guidance has provided more specific protections for physicians, while health-care providers across the country have totally disregarded such new protections as they have done in past 28 years.


 

District Court Finds Louisiana's Benefits Assignment Statute Not Preempted by ERISA (U.S. District Court for the Middle District of Louisiana)

Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana v. Rapides Healthcare System et al. (No. 00-694-D, M.D. La. 2002).

 Excerpt: "Blue Cross' refusal to recognize certain assignments of benefits by patients is included as a provision in its contracts for health benefit plans, including its ERISA plans.... However, Blue Cross' refusal to honor assignments is in direct conflict with the Louisiana Assignment Statute ...

Furthermore, the court finds that the language of Blue Cross' health care plans requires that Blue Cross honor a patient's assignment of benefits. This is because the anti-assignment provisions in the Blue Cross plans state that assignments of benefits will not be honored "except as required by law." ERISA is silent on the issue of assignment of health care benefits, and therefore, "except as required by law" must necessarily refer to requirements of state law, including Louisiana's requirement in La. R.S. 40:2010 that assignments of benefits are honored.
Moreover, Blue Cross' policies issued in Louisiana contain a clause providing that any policy term that conflicts with state law is amended to conform to state law. As a result, Blue Cross' anti-assignment provision is automatically amended, by the terms of the policy, to conform to the requirements of the Louisiana Assignment Statute, and Blue Cross is required to honor assignments of benefits.

Accordingly, the motion for summary judgment (doc. 50) filed by the plaintiff, Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana, is hereby DENIED."

ERISAclaim.com Comment: if this ruling is not appealed or reversed, this ruling will be the one of the most significant from federal court in ERISA claim dispute, protecting health care providers.  Not only will this ruling prevent Blue Cross Blue Shield plans across the country from cornering providers to join Blue Cross Blue Shield managed care networks/plans, to accept managed care discount, subsequent bundling and down coding, but also invalidating anti-assignment provisions in any ERISA plan will perfect the protection for health care providers in ERISA dispute as provided by new FEDERAL CLAIM REGULATION.


 

McCoy, et al. vs. Central States, Southeast & Southwest Areas Health & Welfare Fund

 

Excerpt: "Plaintiffs, Linda and Kenneth McCoy, Martin Fortier, M.D. and Morsay Medical and Rehabilitation Clinic, have filed an amended complaint against defendant, Central States, Southeast and Southwest Areas Health and Welfare Fund ("Central States"), alleging Central States violated the Employee Retirement lncome and Security Act, 29 U.S.C. § 11 32(a)(1)(B), by improperly denying benefits for medical care Linda McCoy received in 1999. Jurisdiction and venue are proper under 29 U.S.C. § 1132(e). Before the court are the parties' cross-motions for summary judgment, filed pursuant to Federal Rule of Civil Procedure 56.

 

All parties agree, as does the court after conducting its own independent review of the relevant plan language, that Central States' plan confers upon the plan administrator sufficient discretionary authority to interpret the terms of the plan such that its decision to deny benefits should be reviewed under the deferential arbitrary and capricious standard. See generally Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989); Exbom v. Central States, SE. & S.W. Areas Health & Welfare Fund, 900 F.2d 1138, 113.21-42 (7th Cir. 1990). But deferential review does not mean no review at all, See Gallo v. Amoco Corp, 102 F.3d 918, 922 (7th Cir. 1996), cert. denied, 521 U.S. 1129 (1997), and the court finds Central States did act arbitrarily by not paying for certain tests and physical therapy sessions Dr. Fortier prescribed to treat Linda's carpal tunnel syndrome....."

 

ERISAclaim.com Comment: If health-care providers complied with ERISA appeal process, medical necessity denials should be pursued in federal court. Apparently both parties requested for summary judgment on the issue of medical necessity without apparent dispute on legal standing and exhaustion of administrative remedy, which might indicate that patient and providers have completed two levels of administrative appeals and with the patient as the plaintiff, legal standing argument may not be applicable.  The sole issue is about medical necessity determination and abuse of discretion by plan administrator.  A straightforward judicial review has repealed that plan's determination of medical necessity review by Central States is apparently flawed. ERISA does provide protection for plan participant and health-care providers.

 


 

Gregory DeLeon v. Brisol-Meyers Squibb Company Long Term Disability Plan

 

Claim Administrator Assessed for $2,550 Statutory Penalty for Failure to Provide Plan Documents and SPD

 

Excerpt: "As noted above, Defendant's first contention is that Section 1132(c)(1) permits penalties to be assessed only against the "plan administrator." 29 U.S.C. §1002(16)(A) defines the term "administrator" as "the person specifically so designated by the terms of the instrument under which the plan is operated" or, "if an administrator is not so designated, the plan sponsor . . ." The Plan designates the "Corporate Senior Vice President, Human Resources of Bristol-Myers" as the "plan administrator." Bristol-Myers also is the Plan's sponsor. At first glance, that might seem to preclude any liability for the Plan or CORE.

 

In the instant case, however, Bristol-Myers delegated the entire claims process to CORE as the claims administrator and designated CORE as the plan "fiduciary." Bristol-Myers advised Plaintiff in June 1999, that CORE had been appointed as the claims administrator and provided him with CORE's address and telephone number. CORE contacted Plaintiff directly to advise him that it intended to review Plaintiff's claim for LTD Benefits. Thereafter, all communications concerning Plaintiff's claim were with CORE or CORE's legal counsel. It was CORE that reviewed Plaintiff's claim and made the decision to deny benefits. The notice terminating benefits was on CORE's letterhead. It was also CORE to whom Plaintiff appealed that decision, and to whom any additional evidence or argument was to be submitted. CORE made the final decision to deny plaintiff's appeal, and the notice denying that appeal was on CORE's letterhead. Plaintiff's request for the Plan and the Summary, which he asserted he needed to pursue his claim, was initially submitted to CORE, who purported to make arrangements for Bristol-Myer to furnish them. Similarly, Plaintiff's request for a copy of his medical and administrative records were made directly to CORE.

 

This court has previously intimated that, under these circumstances, CORE is liable as the plan administrators delegate for failure to provide pertinent copies to claimants within 30 days of the claimant. ......

 

The court finds that CORE violated Section 1133 by failing to provide Plaintiff his administrative file on a timely basis.....

 

CONCLUSION

Defendants' motion (21) for partial summary judgment is DENIED and Plaintiff's motion (25) for summary judgment is GRANTED, in part, and DENIED, in part Defendants' decision to terminate Plaintiff's LTD Benefits is REVERSED and the court directs Defendants to award Plaintiff LTD Benefits effective February 1, 2000. Additionally, the court assesses a $2,550 penalty against CORE for violation of 29 U.S.C. §1133(b).

 

IT IS SO ORDERED and DATED this 28th day of January, 2002."

 

ERISAclaim.com Comment: Group health and disability insurance companies and third party claim administrators have long enjoyed making claim appeal denial decisions and disclaimed responsibilities to provide ERISA plan relevant documents based on which those denial decisions were made by claiming they are not the plan administrator so designated in SPD and not liable for violation of 29 U.S.C. §1133(b). This ruling will send a clear message to anyone who exercised discretionary authority by making claim appeal denial decisions, although different federal courts may rule things differently.


 

Insurer Liable for $100 Per Day Statutory Penalties for Failure to Provide Participant's Claim File (EBIA Weekly)

 

DeLeon v. Bristol-Myers Squibb Co. Long Term Disability Plan (D. Ore. 2002).

 

Excerpt: "Most penalty claims arise from a failure to provide the specifically-enumerated documents in ERISA Section 104(b)(4) (plan documents, SPDs, etc.). We certainly agree that documents must be provided as part of a plan's claims process, but we think that it is a stretch to find the per day penalties applicable to this kind of failure to provide documents."
 


 

Confidentiality Concerns Do Not Justify Refusal to Furnish Requested Plan Documents [Staib v. Vaughn Indus., Inc., 2001 U.S. Dist. LEXIS 12969 (N.D. Ohio 2001)] (EBIA Weekly)

 

 


 

Russo v. B&B Catering, Inc.

 

Failure to Timely Notify Employees of Cancellation of Group Health Insurance Policy Violated ERISA (EBIA Weekly)

Russo v. B&B Catering, Inc. (N.D. Ill. 2002). Excerpt: "[T]he court found that the employer was responsible as plan fiduciary under ERISA Section 104(b)(1) for notifying covered employees of the termination of coverage. (ERISA Section 104(b)(1) requires that a summary of material modification (SMM) be provided within 60 days of the adoption of any 'material reduction in covered services or benefits' under a group health plan.)"
 


CHRISTOPHER VARTANIAN vs. METROPOLITAN LIFE INS. CO.

 

 Excerpt: "......Around January 31, 2000, MetLife forwarded all of Mr. Vartanian's medical records and information to an independent medical consultant, Mark A. Moyer for review. MET 09 I 5. Dr. Moyer is a physician with Network Medical Review. Dr. Moyer is board certified in both internal medicine and infectious diseases. MET 0819. Dr. Moyer reviewed records from at least 9 physicians as well as numerous reports and test and lab results. MET 0813.245. Dr. Moyer determined that Mr. Vartanian no longer met the criteria for a diagnosis of CFS. MET 0909-13.2. Mr. Vartanian's physician, Dr. Korotkin responded that Mr. Vartanian was experiencing a "honeymoon" form CFS. MET 0891. In March, 2000, Mr. Vartanian's cardiologist reported that Mr. Vartanian was experiencing trouble with his repaired heart valve. MET 0825......

....MetLife had two doctors review Mr. Vartanian's medical records. Both of these doctors were with Network Medical Review. MetLife continually uses doctors from Network Medical Review. SeeLaddv. ITT Corp., 13.28 F.3d 753, 755 (7th Cir. 1998). InLadd, the Seventh Circuit determined that MetLife's decision to deny benefits was arbitrary and capricious. Id. The court based this on the facts that the Ladd's condition in that case was worse at the time of claim denial than it had been when the Social Security Administration had granted it, that no doctor who examined Ladd, including the doctor selected by MetLife, found her capable of work, and no reasons were given for disagreeing with the doctors' conclusions. Id. at 756.......

 

MetLife relied solely on reviewing doctors opinions over those of Mr. Vartanian's treating doctors. Were MetLife acting in good faith in terminating Mr. Vartanian's benefits, it seems it should have hired an independent physician to actually examine Mr. Vartanian. Had this been done and properly documented, there would be no basis to overturn its decision. However, that is not the case. In addition, MctLife initially terminated Mr. Vartanian's benefits immediately before a second heart surgery that even the reviewing doctors said would incapacitate Mr. Vartanian for a period. We can determine no reasonable or rational basis for such an action. A reasonable decision maker, one not operating under a predisposition or inclination to terminate benefits, would have atleast deferred any action until the full results of Mr. Vartanian's cardiac rehabilitation were actually known. We discern not a reasonable and objective approach and decision making process, but rather a hurried determination to terminate benefits based upon the thinnest of evidence and a prediction as to the ultimate results of a second surgery and cardiac rehabilitation. Given the solid evidence and history of prior prolonged incapacity, this determination is not only erroneous, its downright unreasonable.

 

For the reasons set forth above, Plaintiff's motion for summary judgment is granted. Defendant's cross-motion for summary judgment is denied.


 

CONNECTICUT v PHYSICIANS HEALTH

 

Excerpt: "For example, we have held that a healthcare provider that spends money on behalf of a patient for drugs and in return receives an assignment of the patient's rights to reimbursement under the healthcare plan has standing as assignee in a lawsuit under ERISA against the plan that refused the reimbursement. See I.V. Servs. of Am., Inc. v. Trs. of Am.Consulting Eng'rs Council Ins. Trust Fund, 136 F.3d 113.2, 117 n.2 (2d Cir. 1998). In I.V. Services, the injury -- the unreimbursed cost of drugs prescribed for the assignor -- was assumed by the assignee, and in return the right to seek redress for it passed from the patient to the provider under the assignment. We noted our agreement "with our sister circuits that, under federal common law, the assignees of beneficiaries to an ERISA-governed insurance plan have standing to sue under ERISA." Id. (citations omitted). By sustaining the plaintiff's standing as a matter of federal common law, we implicitly held that healthcare providers under these circumstances have constitutional standing."


 

Federal Judge Dismisses Connecticut Lawsuit Against Physicians Health Services (Henry J. Kaiser Family Foundation)

Excerpt: "A federal judge has dismissed a class-action lawsuit filed in December by Connecticut Attorney General Richard Blumenthal (D) against Physicians Health Services, the state's largest health plan, saying the state does not have the legal standing to bring the action. But U.S. District Court Judge Stefan Underhill ruled that the federal ERISA statute, which governs employee-benefit plans, limits the "persons authorized to bring an ERISA civil enforcement action" to "either a participant, beneficiary or fiduciary" of the health plan in question, a statutory requirement the state does not meet...."

 

ERISAclaim.com Comment: This case illustrates the futility of state government, Department of Insurance or Attorney General, in policing ERISA health-care claim denials and managed care industry ERISA claim practice either as an ERISA plaintiff in federal court or exercising its state jurisdiction, while physicians and their medical societies are lobbying for state legislation, such as prompt pay laws, and gambling with physician complaints with state agencies in hope to remedy the ERISA claim denials and delays.  Physicians nationwide totally ignored the importance of ERISA protections for their claims as statutory beneficiaries of ERISA plans with proper legal assignment of benefit and understanding of the ERISA claim regulations. Lack of understanding of ERISA by physicians and compliance with ERISA claim regulations by ERISA plans and insurance companies is the main and vital causes of skyrocket health-care costs in U.S. in last two decades.
 


Neurological Testing vs. John Alden Life Insurance Company

 

 Excerpt: "To strike its first blow in what used to be called in the fight game "the old one-two," John Alden Life Insurance Company ("John Alden") timely removed this action from the Circuit Court of Cook County on federal question grounds: the premise that Neurological Testing Services, L.L.C. ("Neurological Testing") has implicitly advanced its claims under ERISA,' even though the claims are expressed in state law terms. Neurological Testing has sued John Alden as the assignee of three individuals covered by group health plans established by their employer--"employee benefit plans" within the meaning of ERISA, so that those claims by Neurological Testing could indeed qualify for assertion under ERISA.

 

Now John Alden has followed up with what it hopes is a knockout blow--a Fed. R. Civ. P. ("Rule") 12(b) (6) motion to dismiss Neurological Testing's Complaint (which comprises four counts, each speaking--as already stated--in terms of a state-law claim) as fully preempted by ERISA. But that attempted haymaker, although it does knock Neurological Testing down for four counts,2 does not succeed in knocking it entirely out of the federal court ring.

As assignee from the insureds who are adverted to in its Complaint, Neurological Testing stands in their legal shoes and is hence authorized to bring an action under Section 1132 (a) (1) (B). ....."

 

ERISAclaim.com Comment: This case illustrates how important it is for health care providers to understand ERISA and its governing power-"a knockout blow" to health-care providers by ERISA plans/insurance companies, how as assignee from their patients, health-care provider may seek for protection in federal court.  However not every time the plaintiff will be so lucky in federal court to be afforded an opportunity that "Instead Meurological Testing's lawyers are ordered to reshape their Complaint into one asserted under ERISA, by filing an Amended Complaint in this Court's chambers (with a copy to be delivered to John Alden's counsel) on or before April 1, 2002.", And whether the plaintiff will survive challenge from defendant for failure to exhaust administrative remedy  remains to be seen.

 

Health-care providers and their attorneys should realize the significance of ERISA and be able to identify ERISA claims before the services were rendered and comply with ERISA appeal procedures before commencing litigation to assure favorable judgments.


 

IN RE: HUMANA INC. [03/13.2]

U.S. 11th Circuit Court of Appeals

 

Court of Appeals Allows Physicians' Lawsuit to Go Forward Against HMOs Despite Arbitration Clause (The Miami Herald)

Excerpt: "A federal court Friday rejected an effort by health insurance companies to stop a nationwide lawsuit by doctors claiming that they were victims of a racketeering conspiracy to reduce their fees."
 


Watson v. UnumProvident Corp. (PDF)
(17 pages, February 19, 2002).

Court Awards LTD Benefits to Claimant Where UnumProvident Based Denial on Wrong Records

 

Excerpt: "Unum not only failed to review what its in-house reviewers had every reason to believe were Watson's records from Dr. Perry during the initial review of Watson's continuing eligibility, but Unum also failed to examine what its reviewers reasonably should have believed were Dr. Perry's records for Watson during the appeal process ... Unum's behavior in this case ... bordered on outright fraud."


 

Thompson v. Life Ins. Co. of North America and CIGNA CORPORATION  (4th Cir. 2002)]

 

Appeals Court Refuses to Accept New Denial Reasons Not Disclosed from Initial Denial Notice-The Most Popular ERISA Violation

 

In this case a plan participant's long-term disability claim was denied on the ground of pre-existing condition exclusion disclosed from initial explanation of benefits (EOB), the participant appealed initial denial and insurer/ERISA plan affirmed initial denial on the same ground of pre-existing condition exclusion.  The participant filed lawsuit in federal court and insurer/ERISA plan changed its denial reason from pre-existing condition to active service provision.  The District Court entered summary judgment for the insurer/ERISA plan but appeals court reversed such erroneous judgment and reasoned:

 

 "LINA would have us bypass ERISA's procedural safeguards. Here, LINA denied Mr. Thompson's claim for benefits in September 1998, explaining that his cardiac condition disqualified him from receiving benefits under the Plan's pre-existing condition limitation. LINA also relied on the pre-existing condition limitation to affirm the denial on appeal. When Mr. Thompson filed suit, LINA's Answer to Mr. Thompson's Complaint again set forth the pre-existing condition limitation as the sole reason for its denial. Not until the summary judgment stage in November 2000, did LINA assert the Plan's "active service" provision as the rationale for its denial of benefits. At this late stage, allowing LINA to raise a new basis for denial would deprive Mr. Thompson of the procedural fairness guaranteed to claimants under ERISA. Quite simply, Mr. Thompson and every other claimant is statutorily entitled to expect that plan administrators will follow mandatory rules of procedure. LINA had a fiduciary duty to consider Mr. Thompson's claim fully and fairly and to provide him with the specific disqualifying  reason or reasons. See Weaver, 990 F.2d at 158. A district court's review is limited to whether the rationale set forth in the initial denial notice is reasonable. A court may not consider a new reason for claim denial offered for the first time on judicial review. We find that the district court erred in relying on LINA's "active service" argument when it reviewed LINA's decision for abuse of discretion.
 

ERISAclaim.com Comment: This is one of the most popular ERISA violations and improper claim denials by insurance companies/ERISA plans in 80 percent of U.S. health-care claims affecting 13.25 million Americans in $1.55 trillion health-care expenses each year.  Ambiguous, incomplete and misleading initial claim denial notice on EOB was given to health-care providers by an insurance company/ERISA plan, then immediately these initial reasons were changed to different grounds on appeal or in judicial review (lawsuit) to deprive claimant from a full and fair review guaranteed by ERISA. Unfortunately health-care providers have never understood ERISA statutes and regulations to complete appeal process, and federal District Court frequently makes errors such as this one in allowing insurance companies/ERISA plans to abuse discretionary authority in benefits determination and judicial review.  Most common case scenarios will be policy exclusion on initial denial on EOB, then medical necessity or pre-existing condition will be the new reason for denial on appeal or judicial review in federal court; or not medically necessary on initial denial, then policy exclusion or failure to obtain pre-certification on appeal; or policy specific exclusion on initial denial without any reference to plan provision or plan document, then changes to experimental therapy without any explanation on appeals or judicial review; or even worse, after changing many times of reasons for denial, insurance company/ERISA plan may simply assert anti-assignment provision in last-minute in judicial argument to completely deny any rights of a full and fair review while instructing providers to endless appeal to utilization review companies that has no authorities to make decisions on appeal, unfortunately most of the time district court will accept such "bypass ERISA's procedural safeguards" argument such as occurred in this case.

 

As the appeal court points out: "Quite simply, Mr. Thompson and every other claimant is statutorily entitled to expect that plan administrators will follow mandatory rules of procedure." Unfortunately health-care providers nationwide have rarely followed ERISA appeal procedures and regulations to enjoy such ERISA protections.


 

NEUMA, INC. vs. AMP, INC., et al  02/20/2002

 

Assignee of ERISA Claim Awarded $5215.00 in statutory penalties

 

"MEMORANDUM OPINION AND ORDER

The case is before the Court on remand from the Seventh Circuit, which instructed us to: (1) determine whether statutory fines should be assessed against AMP for its alleged failure to comply with Neuma's requests for plan documents (Count IV of Neuma's First Amended Complaint) and (2) determine whether AMP is liable under state law for negligent misrepresentation (Count II). Neuma, Inc. v. Amp, Inc., 259 F.3d 864, 881 (7th Cir. 2001). Neuma has submitted a Federal Rule of Civil Procedure ("Rule") 56(e) motion for summary judgment on Count IV. AMP has submitted a Rule 5 6(c) motion for summary judgment on both claims. For the reasons set forth below, Neuma's motion for summary judgment is granted and AMP's motion for summary judgment is granted in part and denied in part.

 

Conclusion

 

For the reasons stated above, there is no genuine issue of material fact on the claim Neuma asserts against AMP in Count II of its first amended complaint for negligent misrepresentation, and AMP is entitled to judgment as a matter of law on that claim. AMP's motion for summary judgment on that claim is, therefore, granted. There is also no genuine issue of material fact on the claim Neuma asserts against AMP in Count IV of its first amended complaint for violation of 29 U.S.C. § 1132(c), and Neuma is entitled to judgment as a matter of law on that claim. Neuma's motion for summary judgment is, therefore, granted and the Court awards it $5215.00 in statutory penalties on that claim. AMP's motion for summary judgment on Count IV is denied. This is a final and appealable order."

 

ERISAclaim.com Comment: This is the first case to establish that assignee of any ERISA claim is entitled to ERISA statutory penalty for violation of ERISA plan document disclosure, violation of 29 U.S.C. § 1132(c). This is an extremely important case for health-care providers, as assignees of ERISA claims from their patients, plan participants and beneficiaries, as the only protection and leverage in pursue for any wrongly denied health care claims, as intended by Congress in ERISA, in absence of traditional punitive damage claims and state law preemptions, and  without/or before Patient Bill Of Rights from Congress. The remand from the Seventh Circuit specifically established circumstances when such statutory penalty claim might be brought by an assignee of ERISA plan.  For further discussion of this important subject, please reference ERISA For Physicians.


 

Zervos v. Verizon New York, Inc. (2d Cir. 2002).

 

BENEFIT DENIAL BASED ON EXPERIMENTAL TREATMENT EXCLUSION OVERTURNED

 

Excerpt: "[T]he Second Circuit found that the insurer had 'in effect added additional    language to the policy' by requiring HDCT to be superior to other  treatments while the experimental exclusion required only that the  treatment be effective and appropriate, not more effective than alternatives." (EBIA Weekly)

 

2nd Circuit Orders Health Plan to Cover HDCT in Light of Improper Benefits Denial, Medical Urgency (Thompson Publishing Group)

Excerpt: " Empire denied coverage ... because it deemed [high-dose chemotherapy treatment] ... was 'not of proven benefit' or 'was not generally recognized by the medical community as effective or appropriate for that condition, as determined by the Claims Administrator.' ... [P]lans should review their exclusionary language to ensure that the provisions clearly state the intended standard and the level of treatment effectiveness needed for coverage."
 



Olive v. American Express LTD Benefit Plan (C.D. Cal.).

 

DETAILED REASONS FOR DENYING LTD CLAIM MUST BE IN INITIAL DENIAL NOTICE  

   Excerpt: "[I]n the Ninth Circuit (and certain others), the stricter de novo standard can apply even where the plan document confers discretion, where (as here) the administrator has a conflict of interest and procedural irregularities (such as the defective initial denial letter) show that the conflict adversely affected the decision." (EBIA Weekly)


 

Hermann Hosp. v. MEBA Medical and Benefits Plan

 

"CONCLUSION    Mrs. Nicholas made a valid assignment of her right to payment for benefits furnished by Hermann under the Plan. Her assignment was unambiguous and was not destroyed by her reservation of the right to sue MEBA in the event that coverage was denied. MEBA is estopped to assert the anti-assignment clause asserted for the first time by MEBA more than three years after Hermann first requested payment. The law of the case is that ERISA preempted Hermann's state law claims. No exception to that doctrine applies here as there has been no controlling authority making a contrary decision on the issue.
 

Hermann is entitled to recover payment as an assignee for the services it rendered to Mrs. Nicholas under the Plan, but is not entitled to assert state law claims as proposed here because they are preempted. We therefore AFFIRM the judgment of the district court to the extent it refused to address Hermann's state law claims, but REVERSE the judgment of the district court to the extent it denied Hermann's recovery as an assignee and taxed costs against Hermann, and RENDER judgment in favor of Hermann in the principal amount of $341,921; but we REMAND to the district court for the limited purpose of issuing a final judgment, including interest, costs and, if proper, attorneys' fees, consistent herewith.    SO ORDERED."
 

ERISAclaim.com Comment: Health-care providers will have right to sue for payment of benefits if a valid assignment of benefit and right to sue was obtained from the patient.  Frequently an anti-assignment clause asserted by the insurance company/ERISA plan without proper and timely disclosure may not be enforceable to destroy health-care provider's right to pursue for payment as a statutory beneficiary under ERISA and the insurance company/ERISA plan is estopped to assert and enforce such anti-assignment clause in the court.  Practical strategies for health-care providers are to obtain a valid assignment of right to pursue and request for disclosure of any possible anti-assignment clause.


 

PACIFIC COAST HOSPITAL v. AETNA HEALTHCARE

"requesting payment of benefits and/or to discuss the matter in further detail" by hospitals are wasting time and money

 

"Plaintiffs assert state law claims for breach of contract, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-1 et seq., fraudulent misrepresentation and insurer bad faith pursuant to 42 Pa. C.S.A. § 8371 in this action arising from decedent's stay in Pacific Coast Hospital in Playas de Tijuana while visiting Mexico. This action was removed from the Philadelphia Court of Common Pleas by defendant which has now moved to dismiss.

 

Defendant asserts that plaintiffs' claims are preempted by the Employment Retirement Income Security Act ("ERISA") and that plaintiffs cannot state a cognizable ERISA claim because their complaint was filed and served beyond the limitations period, they seek damages not available under ERISA, they failed to exhaust administrative remedies, Pacific Coast Hospital lacks standing and they have no rights against Aetna U.S. Healthcare.(1)....

 

(ERISA preempts claims for breach of contract, misrepresentation, unfair trade practices and wrongful refusal to provide benefits). Plaintiffs' claims are preempted by ERISA.(3)....

 

Accordingly, defendant's motion to dismiss will be granted. Plaintiff, however, will be afforded leave to amend to assert an ERISA claim insofar as such can be done in good faith consistent with the foregoing memorandum. An appropriate order will be entered."

 

ERISAclaim.com Comment: Apparently, the hospital, like every hospital in the country, is totally clueless about ERISA in its everyday claim dispute with Aetna or insurance companies while hospitals nationwide are dealing with health-care claims with 80 percent of them from ERISA plans.  Hospitals nationwide have no educational programs on ERISA claim disputes and do not recognize the name of the game of health-care claims, ERISA, and rule of the game, legal standing, SPD, claims procedures and exhaustion of appeals/administrative remedy.

    As the court correctly pointed out: "Plaintiffs argue that their claims nevertheless are not preempted by ERISA because by failing to respond to plaintiffs' letters "requesting payment of benefits and/or to discuss the matter in further detail" defendant "waiv[ed] their right to have these matters heard administratively and/or made it impossible to have an administrative scenario." Plaintiffs also contend that defendant failed to "exert its rights through ERISA" and thus waived any such claim of preemption. Plaintiffs cite no legal authority for these unusual contentions.(2) Defendant's refusal to respond to a request for payment of benefits can hardly affect preemption. Defendant also has expressly "exert[ed] its rights through ERISA" in the instant motion and could not in any event waive the express supersedure of state law by Congress."

     This trend of lack of understanding of ERISA and refusal of complying with ERISA by hospitals and health-care providers will continue with unthinkable economical disastrous impact on U.S. economy, while majority of health-care providers nationwide hope that Patient Bill Of Rights in Congress will provide resolution or protection to our national problems.  If existing two levels of internal appeals cannot be understood and complied, how could both internal and external appeals required by Patient Bill Of Rights afford any help?


 

PA Psychiatric v. Green Spring Health [02/06]

 

    ERISAclaim.com Comment: This is the first time for health-care provider association to prevail legal standing from a federal appellate court against HMO under ERISA. 

      This may signal the beginning of new judicial environment for health-care providers under ERISA to have at least an opportunity to be heard in federal court of their nightmare stories under managed care governed by ERISA, although as noted by the court that the association may or may not ultimately prevail in its claims with respect to the facts and the laws, and the association has lost its damage claim forever except for possible injunction relief, which may ultimately follow the steps of ERISA legal reasoning of U.S. Supreme Court in PEGRAM et al. v. HERDRICH, which held that because mixed treatment and eligibility decisions by HMO physicians (as alleged in this case by association) are not fiduciary decisions under ERISA, and plaintiff failed to state a claim under ERISA, even right after the defendant removed its case from state court to federal court on the ground of ERISA jurisdiction and preemption in association's claims originated from the state court.

     The significance of this case is its survival of legal standing challenge for the association, which may provide discovery weapons, that could have precipitated any possible heart attacks of the managed care ERISA shield.



Psychiatric Association May Sue HMOs
The Legal Intelligencer


    Excerpt: "Voting 2-1, the 3rd U.S. Circuit Court of Appeals ruled Wednesday that the Pennsylvania Psychiatric Society might have legal standing to sue a group of HMOs on behalf of its member psychiatrists and their patients, challenging what it claims are unfair refusals to pay for psychiatric services. The court said the PPS may be able to prove it has "associational" and third-party standing to press its members' claims."
 


Harrow v. Prudential Ins Co

 

Even for Viagra, No Appeals, No ERISA Rights


Telephone appeal/inquiry after denial without at least two levels of written appeals will not satisfy ERISA requirements of appeals/administrative remedy, and assumption of written appeal will not change the outcome does not help in this Viagra coverage dispute under ERISA.

"Except in limited circumstances . . . a federal court will not entertain an ERISA claim unless the plaintiff has exhausted the remedies available under the plan."

 


 

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

 

 


 

 

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
                                                          ERISA
"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...."

 

ERISAclaim.com Comment: This is the first landmark ruling from US Supreme Court in 2002 for the most significant health care issue, whether an insurance company/ERISA plan is entitled to recover from the patient 100% of what it has paid from health insurance/employee benefit plan as a subrogation lien under ERISA.  The answer is "no", according to the following U.S. Supreme Court ruling.

 

Gilbert v. Alta Health & Life Insurance Co. (11th Cir. No. 01-10829,12/27/01).

 

One Employee, One Shareholder, But ERISA Plan

(Name of the Game for 80 Percent of Health-care Claims in U.S.)

"Because the insurance policy covered at least one other employee of Winfield Monument Company, besides Gilbert and his wife, there is no dispute that it constituted an ERISA plan."

 

ERISAclaim.com Comment:   11th Circuit sides with 3d, 4th, 5th, 8th, 9th and 10th Circuits in holding that once plan is an ERISA plan, even the plan covers one employee and shareholder in group health plan, ERISA is in control, preempts state laws.

Most health-care providers, some health-care experts and even some state Department Of Insurance are confused on what constitutes an ERISA plan.  Most of them mistakenly believe a fully insured group health plan through group health insurance policy in private sectors is not an ERISA plan and subject to state laws, such as prompt pay law and bad faith. This case ruling has made it absolutely clear that even one employee group health plan in private sector is an ERISA plan, subject to ERISA, not state law.  (*Honorable Federico A. Moreno, U.S. District Judge for the Southern District of Florida, is the judge for Re: Managed Care Litigation, filed by seven major medical associations, representing 600,000 medical doctors against seven giant HMOs in Miami, Florida).

Bad Faith, (Prompt Pay Act), Not for ERISA Plans

 

Eleventh Circuit Slaps Down State-Law Bad Faith Claims Against ERISA Plan Insurers (EBIA Weekly)

Walker v. South Co. Services, Inc. (11th Cir. 2002).

Excerpt: "[W]e reported on a small flurry of cases in the fall of 2000 in which federal trial court judges permitted such claims, based on their reading of a later Supreme Court case, UNUM v. Ward ... The Eleventh Circuit in this opinion forcefully rejects any interpretation of Ward that would preserve bad faith claims."

 


When The Terms Of The SPD Control Over The Terms Of The Underlying Policy? 

(Rule Of The Game For 80 Percent Of Health Care Claims In U.S.)

PAMELA HERTEL MERS v MARRIOTT INTL GROUP ACCIDENTAL DEATH AND DISMEMBERMENT PLAN U.S. 7th Circuit Court of Appeals

1. If  an SPD satisfies ERISA's requirement that it is accurate and sufficiently comprehensive to reasonably apprise plan participants of their rights and obligations, see 29 U.S.C. sec. 1022; (after January 22, 2002, Amendments to Summary Plan Description Regulations [Rules and Regulations] [11/21/2000] | [PDF Version]

2. An participant or beneficiary may rely on an SPD and estop a plan administrator from denying coverage for terms found in the underlying policy only if there is a direct conflict between an SPD and the underlying policy. An SPD controls if a conflict exists between the underlying policy and the SPD;

3. An SPD's silence on an issue does not estop a plan from relying on the more detailed policy terms when no direct conflict exist;


 

HCA Health Services of Georgia, Inc. v. Employers Health Ins. Co. (11th Cir. 2001).

Silent PPO Discount?

ERISAclaim.com Comment:  PPO discount problem is  every day headaches and "rip off" from Managed Care systems. The latest federal court ruling and analysis will help understand and protect your interest.

 

2/12/2001: 11th Circuit Addresses Standard of Review and "Leasing" of Provider Discounts (EBIA Weekly)

 http://www.ebia.com/weekly/articles/ERISA010208HCAHealthServ.html

 

Analysis of HCA Health Services of Georgia, Inc. v. Employers Health Ins. Co. (11th Cir. 2001). Excerpt: "This case offers an interesting and detailed view of provider discount practices, as well as a step-by-step application of the Eleventh Circuit's analysis of standard of review. On the discount issue, the court's analysis is tied to the specific language in the plan documents and the contracts in issue ..."


FALLICK v NATIONWIDE MUTL INS

Usual, Customary and Reasonable Charges

ERISAclaim.com Comment:  Usual Customary and Reasonable claim denial is almost usual and customary but unreasonable denial for a physician's practice every day in industry. Due to ERISA shield and lack of ERISA understanding by physicians and failure of appeal process, no physicians have successfully challenged insurance company's UCR schedule practice under ERISA and achieved class-action certification. This patient has done everything by himself persistently filing appeals, successfully prevailed in class-action status certification and court determination that UCR schedule has to be disclosed. Only difference is the plaintiff is participant of the plan, not physician or a health-care provider. If a proper and valid legal assignment for benefit and legal standing can be transferred to a physician, which is the essence  of this book, physician complied with ERISA appeal requirements, a physician will be able to enjoy same ERISA protection.


 

Medical Alliances, LLC v. American Medical Security

No Appeals, No Protections

ERISAclaim.com Comment: With $10,600.00 medical claims outstanding, Medical Alliances made numerous demands for payment for nine months without response from the insurance company. Case dismissed because demand for payment does not constitute ERISA appeals. Health-care providers have wasted time and money as well as energy in making numerous demands for payment instead of ERISA qualified appeals.

 

Insurer With "Administrative Services Only" Contract Ruled to Be Fiduciary (Thompson Publishing Group)

Excerpt: "An employer's breach of fiduciary duty claims against an insurer under an administrative services only (ASO) contract were not dismissed -- even though the insurer was not named as a fiduciary in the plan documents -- because the insurer exercised discretion in managing plan assets and maintaining plan records, a federal district court ruled on a summary judgment motion."


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)

Supreme Court Makes Subrogation More Difficult (Kilpatrick Stockton LLP)

Excerpt: "This Alert reviews the Supreme Court's decision and, in the 'Analysis' section at the end, suggests steps plan sponsors may consider in response to this judicial setback for subrogation."


Supreme Court to Hear Arguments Jan. 16 in Challenge to Illinois External Review HMO Law (KaiserNetwork.org)
 

Supreme Court Will Decide ERISA Preemption Case on External Review of HMO Claim Denials (Associated Press via Yahoo! News)

Excerpt: "Debra Moran's hunt for effective treatment of her rare condition became a seven-year saga marked by unnecessary surgery, conflicting medical advice and legal battles with her insurer. Next week, it winds up in the U.S. Supreme Court."


Justices Mull States' Powers Over HMOs (Washington Times)

Excerpt: "Those questioning how HMO coverage could be defined as insurance included Justices O'Connor, David H. Souter, Stephen G. Breyer and Antonin Scalia."


HMO Seeks Overturn of Illinois Law (Washington Post)

Excerpt: "'You can't expect companies to deal with 40 different laws,' attorney John G. Roberts Jr. said, telling the court in oral arguments that the Illinois law usurped regulatory powers Congress had reserved to the federal government."


Supreme Court Hears HMO Case (Associated Press via Yahoo! News)

Excerpt: "Wednesday's argument focused on the complex relationships among the federal law, state laws and previous Supreme Court decisions. Acknowledging the difficulty, Justice David H. Souter observed, 'The facts do not put this in a clear category.'"


Amicus Brief of the United States in Supreme Court HMO External Review Case (PDF) (U.S. Supreme Court via FindLaw.com)

38 pages. The U.S. argues that the Illinois law mandating external review of HMO denials is saved from preemption because it is a law that regulates insurance, under ERISA's insurance savings clause.


Amicus Brief of the AAHP and American Benefits Council in Supreme Court HMO External Review Case (PDF) (American Benefits Council)

38 pages. Argues that the Illinois law mandating external review of HMO denials is not saved from preemption a law that regulates insurance, but instead constitutes an impermissible alternative enforcement mechanism.


Petitioner's Reply Brief in Supreme Court HMO External Review Case (PDF) (U.S. Supreme Court via FindLaw.com)

13.2 pages.


Petitioner's Brief in Supreme Court HMO External Review Case (PDF) (U.S. Supreme Court via FindLaw.com)

29 pages.


ERISA Participant May Sue for Interest on Benefit Payments That Are Improperly Delayed (EBIA Weekly)

Dunnigan v. Metropolitan Life Ins. Co. (2d Cir. 2002). Excerpt: "Joining the Seventh and Third Circuits, the Second Circuit in this decision holds that an ERISA participant may sue to recover interest on benefits that are late (i.e., paid after the time the participant is entitled to receive them under the terms of the plan). Under the long-term disability plan in this case, it took a participant almost five years to convince the insurer that she was disabled and therefore entitled to benefits."


Individuals Wrongly Denied Coverage Under ERISA Plan Are Entitled to Reinstatement and Benefits (EBIA Weekly)

LaRocca v. Borden, Inc. (1st Cir. 2002). Excerpt: "EBIA Comment: When employees or dependents are improperly denied coverage under an ERISA plan, the plan sponsor may be liable to add them to the plan (through the remedy of reinstatement) and may be liable to reimburse plan benefits on a retroactive basis. And this may be true even if the plan is insured, with the result that the employer and not the insurance company may be liable for the retroactive benefits ..."


Health Plan May Pursue ERISA Reimbursement Action If Plan Participant Still Has Control of Funds (EBIA Weekly)

Administrative Comm. of Wal-Mart Stores Health and Welfare Plan v. Varco, 2002 U.S. Dist. LEXIS 530 (N.D. Ill., 2002)

Excerpt: "In the first reported case on ERISA subrogation and reimbursement since the Supreme Court's January 8, 2002 decision in the Great-West case, a federal district court in Chicago has ruled that Great-West does not preclude a health plan's ERISA reimbursement action when the plan sues a plan participant who still has control over recovered amounts to which the plan asserts a right."

 


Terms of ERISA Health Plan Avoid Application of "Make Whole" Doctrine or Offset for Attorney Fees (Wisconsin Court of Appeals)

Johnson v. Ziegler (Wis. Ct. App., No. 00-35545, 4/25/02).

Excerpt: "The circuit court granted [the health plan] ... the full amount of its subrogation claim, with no reduction or offsets under the 'made whole' doctrine or for attorney's fees [which Johnson, the plan participant,] incurred in obtaining the settlement [against the third-party tortfeasor]. Johnson claims the court erred in so doing. We disagree and affirm."

 

 

ERISA & Health Claim
What Is ERISA and How Does It Affect Patient Rights?

 

"ERISA was enacted in 1974 to protect the pension and welfare benefits that employers provide their workers. It currently covers about 2.5 million health plans and 125 million workers, retirees, and dependents."

 

ERISA & Claim Denials

Aetna Video Shows ERISA Patients Mistreated

 

"According to the video, when faced with claims for identical medical problems, Aetna separates the claims where no damages are available - those subject to the federal Employee Retirement Income Security Act, or ERISA - from non-ERISA claims, where consumers can sue.1 2"

 

Aetna ERISA Settlemnt with 950,000 MD's

 

Department of Labor

 
"A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.
 

Most private sector health plans are covered by the

 Employee Retirement Income Security Act (ERISA). Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans (participant rights), including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law."

 

 
Groom Law Group
 
Groom Law Group
 
Groom Law Group
 
Groom Law Group

 

NAIC News Release

 

 

 

ERISA Laws/Rules

ERISA in the United States Code:
 Cross-reference table, table of contents

 

Download Title 29, Chapter 18, of the United States Code ("Employee Retirement Income Security Act" or "ERISA") - From the U.S. House of Representatives downloadable U.S. Code.

 

ERISA in US CODE

 

ERISOPHOBIA

 

 VILLANOVA LAW SCHOOL

 

National Institute for Trial Advocacy

 

 

DOL Secretary Testifies to Committee About ERISA Enforcement, Compliance Assistance (U.S. Department of Labor, Pension and Welfare Benefits Administration)

 

 

 

McCalla Thompson

 

 

 

 

 

 

 

 

 

 

HMOCrisis.com

 

 

 

 

 

   
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