"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 further proceedings
consistent with this opinion.7
It is so ordered."
On Sept. 2, 1974,
exactly 30 years ago today, ERISA, The Employee Retirement
Income Security Act,
was signed into law by President Gerald R. Ford. The congressional intent in enacting ERISA was to
protect employees in pension and welfare plans, to provide
uniform federal protections in response to the failure of the
Studebaker Co. in December 1963, with thousands of long-service
employees cheated out off their promised pensions, and to
preempt any state laws when the employees pension and welfare
benefits were threatened. 30 years later, ERISA Failure in its
compliance and enforcement left thousands of retirees without
medical benefits, and resulted in a skyrocketing national healthcare expenditure explosion with 45 million uninsured and a possible national pension bailout.
Excerpt: "The seed for
ERISA was planted with the failure of the Studebaker Company in
December 1963, leaving thousands of long-service employees
without their promised pensions."
An
ERISA-regulated
“welfare plan” includes any plan or program established by an employer
for the purpose of providing
medical care or benefits to its employees
through the purchase of insurance (fully-insured)
or otherwise. An ERISA plan can be self-insured or fully-insured in private
sectors. 29
U.S.C. 1002(1).
3.Governmental plan,
church plan, worker's compensation, Medicare, individual insurance
policy, school plan (if under governmental and
church status) and third party liability claims are
exempted from ERISA.
5.ERISA Does Not Provide
Any Remedy except for SPD Statutory Penalty and "Contractual Damages"
(Your Medical Bills)
6.ERISA Does Not Permit
Physician’s Lawsuit Unless At Least Two Levels of Appeals Are Completed
and A Legal Assignment of Right to Sue Is Obtained from the Patient.
(Legal Standing and Administrative Remedy Exhaustion)
12.
ERISA Protects Health-care Providers Who Have Legal Assignment of
Benefits and Have Completed At Least Two Levels of Appeals
13.Without A Proper Legal
Assignment of Benefits and Without Full Compliance with
ERISA Appeal Procedures (Q-B2, B3), Healthcare Providers Are Illegal
Aliens in ERISA Land
4."In
2001, 32.2 percent of the elderly had
employment-based health insurance coverage
in addition to Medicare,
up from 28.7 percent in 1987." (page 2) (Facts
from EBRI: Health Insurance and the Elderly (PDF) - Employee
Benefit Research Institute)
5.
More than 208 million nonelderly Americans had insurance coverage in
2003, while 44.7 million were uninsured. the majority of Americans,
159.2 million, insured in 2003 received coverage through an employment
based health plan, 42.5 million were covered by public programs, and an
additional 17 million purchased policies directly from an insurer. More
than 32 million Americans participated in the Medicaid or State
Children’s Health Insurance Program (S-CHIP),1 and 6.9 million received
their health insurance through the Tricare and CHAMPVA2 programs and
other government programs for retired military and their families. (Sources
of Health Insurance & Characteristics of the Uninsured: Analysis of the
March 2004 CPS (PDF) - Employee Benefit Research Institute)
11.Most Legislative
Efforts and Litigations by Physicians and Patients Failed Due to ERISA
Shield and the Lack of Understanding of ERISA by Patients and
Physicians
12.Legislation,
Litigation and the Extremely High Cost Healthcare Administration Are Not
Answers to Managed Care Nightmare and Physician's Business Survival
Unless healthcare providers Gain A Reasonable
Understanding and
Practice of
ERISA Claims Appeal Procedures
15.ERISA
Claim Regulation Was Ignored, Rejected, Misinterpreted, and Withheld
by Health Care Providers and Hospital Associations, As They Did for
ERISA In Past 30 years, While Managed Care Claim Denials, Skyrocket High
Health-care Costs and Medical Malpractice Premiums Escalated,
Association's Litigation and Patient's Bill Of Rights "Campaign" At Both
Federal and State Levels Pursued Contradictorily by These
Associations across the Country
"It shall be unlawful for any
person through the use of fraud, force, violence, or threat of
the use of force or violence, to restrain, coerce, intimidate,
or attempt to restrain, coerce, or intimidate any participant or
beneficiary for the purpose of interfering with or preventing
the exercise of any right to which he is or may become entitled
under the plan, this title, section 3001, or the Welfare and
Pension Plans Disclosure Act. Any person who willfully violates
this section shall be fined $10,000 or imprisoned for not more
than one year, or both. The amount of fine is governed by 18
U.S.C. § 3571. The U.S. Sentencing Guidelines address 29 U.S.C.
§ 1141 under the guidelines for "Fraud and Deceit" (U.S.S.G. §
2F1.1) or for "Extortion by Force or Threat of Injury or Serious
Damage (U.S.S.G. § 2B3.2)......"
"For example, Section 1141
would reach the use of deception directed
at misleading a welfare plan beneficiary as to the amount of
health benefits owed to the beneficiary under the terms of the
plan or at misleading a pension plan participant as to
the amount of retirement benefits to which he would become
entitled under the plan upon his retirement."
New Assignment of Benefit Form Required for
Appeals and Claim Dispute
(DOL
FAQ, B2-B3)
No New Legal Assignment of Benefit Form, No
Obligations to Physicians and Health-care Service Providers
(DOL
FAQ B2),
otherwise Obligations to Disclose to Both Patients and Providers
(DOL FAQ B-3)
No written appeal, no rights, except for claims
involved with urgent care.
[Page 70255 & 70271]
In claims involved with urgent care,
physicians/health-care providers are to be considered by default as
authorized representatives.
[Page 70255 & 70271]
Must complete required two levels of appeals,
with legal assignment of benefits and specific written request for
disclosure of specific plan documents.
[Page 70253]
No legal assignment of benefits, no response
required; no specific written request, no disclosure obligated,
however failure to establish and comply with claim procedures,
administrative remedies are considered to be exhausted. Lawsuit may
follow.
[Page 70271]
New protections for pre-service claims and
urgent care claims against improper pre-authorization,
pre-certification and utilization review as well as urgent cares.
[Page 70248 & 70271]
New clarifications on state law preemptions and
"independent" medical reviews. No preemption for state laws unless
prevention of the application of the new regulation
[Page 70254]
Comply with both
the regulation and state laws in claims involving mixed
treatment and eligibility determinations and pure medical treatment
decision-makings.
[Page 70254]
New clarifications with new definitions claim
denial/an adverse benefit determination (payment<100% claimed)
or Overpayment, and new protections.
(DOL FAQ C-12)
Overpayment vs. an adverse benefit
determination, recoupment vs. appeal procedures.
(DOL FAQ C-12)
Fully-insured plans with a health insurance
issuer being wholly or partially responsible for administering the
plan (e.g. payment of claims) must describe insurer's role in SPD.
[29 CFR 2520.102-3 (q), Page 70242]
Failure to timely
make benefit determination and review decisions by the plan
administrator will constitute "deemed denied" review/appeal and
"deemed exhaustion of administrative remedy" under
§ 2560.503-1(l), ("a decision on the
merits of the claim" = de novo judicial review, instead of
deferential judicial review) that will forfeit or preclude
the plan from "deferential review standard" on judicial review in
federal court,
the most important part of "ERISA Shield" on ERISA land.
Gilbertson v Allied Signal Inc
And
many more new and
important
provisions and protections for health-care providers and
insurance companies/ERISA plans/TPA's, as well as patients and
employers.
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)."
"If you are an employee
or family member of an employee who receives
health benefits
from a health plan provided through
employment in the private sector, a federal law, the Employee Retirement Income Security
Act (ERISA),
protects you. Among the protections, ERISA sets
standards for administering these plans. Those standards
require plans to give you important information about the plan
and to have a fair process for handling benefit claims.
Below are steps you
should take to file a benefit claim and what to do if your
claim is denied. It is especially important to know your
rights under your plan and the law if your benefit claim is
denied.
The
first step you
should take - even before you are ready to file a benefit
claim - is to carefully read your plan's summary plan
description. This is a document which your plan administrator
must furnish to you after you join the plan. You can also
request a copy from your plan administrator.
The SPD gives you
a detailed summary of your plan - - how it works, what
benefits it provides, and how they may be obtained (the
process for filing your claim). The summary plan description
is also required to describe your rights and protections under
ERISA."
"MAMSI and CareFirst
recoup overpayments to
doctors by making deductions from future reimbursements.
Doctors can appeal insurers'
decisions. But, in the end, they usually pay up, doctors
and insurers agree."
Excerpt: "Looking to bring down soaring
health-care costs anywhere they can, more employers are scouring
their health plans for fraud, abuse and simple mistakes by
employees or administrators.
.......The
number of requests for such audits jumped 50 percent last year,
Mr. Farley estimates."
"DETROIT, April 19 /U.S.
Newswire/ -- The Blue Cross and Blue Shield Association (BCBSA)
today announced a new Anti-Fraud Strike Force comprised of top
Blue Plan investigators that will work with the Federal Bureau
of Investigation (FBI) and other national, state and local law
enforcement agencies to fight major insurance fraud schemes that
rob consumers of millions of dollars annually. BCBSA President
and CEO Scott P. Serota announced the new initiative in a speech
to the Detroit Economic Club."
"The case is somewhat
unusual in that a corporation was named as a criminal defendant
in the case,
but Kaiser said that is not unheard of since corporate law can
make a firm liable for criminal wrongdoing, and its principal
office holders in return are responsible for any judgments or
punishments the courts impose.
David Griem,
the defense attorney for Emergency Management who was also named
the principal to enter a guilty plea on its behalf,
also could not be reached for comment after the sentencing
hearing. In court, however, he turned over a check to the Blue
Cross insurance company officials in attendance and said the
company would pay the $5,000 court costs on time as well."
"On June
4, 1998, in the District of Maryland, Levindale Geriatric
Hospital paid $800,000 to resolve allegations it violated
the FCA by recoding and resubmitting
denied charges for room and board. After the claims for room
and board were denied by the Medicare Part A program,
Levindale recoded the claims as supplies, laboratory work
and other services, and submitted the claims for payment.
In addition to paying a substantial penalty under the FCA,
Levindale entered into a compliance agreement with HHS-OIG"
Top Seven Issues through
National Medical Specialty Societies
In response to 28 year confusion with ERISA preemption of state law, the
new
claim regulation has clarified the nature and extent of ERISA
preemption of state law [Page 70254]:
In response to 28 year confusion with ERISA preemption of state law, the
new
claim regulation has clarified the nature and extent of ERISA
preemption of state law [Page 70254]:
"In response to these comments, the Department has added to the regulation a new paragraph
(k) providing interpretive guidance on the question of the relationship
of the substantive regulatory standards to State law. Subparagraph
(k)(1) states that the regulatory standards should not be read to
supersede State law regulating insurance (even when such State law
prescribes standards for claims processes and internal review of claims)
unless such State law prevents the application of a requirement of the
regulation. For example, a State may have a law requiring insurers to
allow oral appeals of all claims or to decide claims within shorter
periods of time. These laws would not prevent the application of the
regulation because plans could comply with both the regulation and the
State laws.
Subparagraph (k)(2)(i) explains that a State law regulating
insurance should not be considered to prevent the application of a
requirement of the regulation merely because the State law establishes a
review procedure to evaluate and resolve disputes involving adverse
benefit determinations under group health plans, so long as the review
procedure is conducted by parties other than the insurer, the plan, the
plan's fiduciaries, the employer, or any employee or agent of any of the
foregoing. Subparagraph (k)(2)(ii) further explains that, in the
Department's view, the types of procedures described in subparagraph
(k)(2)(i) are not part of the claims procedures contemplated by section
503 of the Act, but are ``external reviews'' that are beyond the scope
of the regulation. As a result, while such procedures as established by
State law are not preempted by the regulation, under subparagraph
(k)(2)(ii), claimants cannot be required to submit their claims to such
procedures in order to be entitled to file suit under section 502(a) of
the Act.\33\ There is nothing in the regulation, however, that would
preclude a claimant from voluntarily submitting a claim for review
pursuant to a State-provided external review process."
A general rule of thumb in determining if a dispute is "related to"
ERISA benefits is that if a question is relating to the "quantity" of
the care (pure eligibility/coverage determination), it is an ERISA issue,
while a question is relating to the "quality" of the care (pure
treatment), it is a non-ERISA issue, therefore quantity = ERISA, quality
= non-ERISA.
RUSH PRUDENTIAL HMO, INC. v. MORAN, "ERISA
does not preempt the Illinois HMO Act.", because Illinois HMO act
regulates medical necessity, mixed treatment and eligibility issue, and
a law to “be specifically directed toward” the insurance industry.
According to a recent
DOL information letter, as to Multiple Employee Welfare
Arrangements, MEWA, ERISA § 514(b)(6)(A) allows state insurance
regulation of MEWAs and MEWA trusts without regard to whether they are
employee benefit plans covered by Title I of ERISA.
Faster
decisions on initial claims - rather than 90 days (or more) under
current regulation, the new rule would require decisions (in most cases)
not later than:
Therefore in accordance with U.S. Supreme Court opinions in both
PEGRAM et al. v. HERDRICH and
RUSH PRUDENTIAL HMO, INC. v. MORAN, if a medical claim
dispute involves ERISA fiduciary issue (pure coverage/eligibility) from
an ERISA plan (self-insured or fully-insured health group plans), state
laws are preempted or Department Of Insurance does not have jurisdiction
over such pure coverage/eligibility dispute. If a medical claim dispute
involves treatment issue or mixed treatment and coverage issues from an
ERISA plan, state laws are not preempted because these
decisions/disputes with ERISA plans are not ERISA fiduciary functions
because "mixed treatment and eligibility" (mixed quality and quantity)
is not ERISA question in the first place or the dispute does not trigger
or concern ERISA jurisdiction. However it is important to note that
state laws may not provide direct remedies against ERISA plans for the
patients and providers, such as ordering claim payments or
imposing
penalties directly from the payment delays, such as prompt pay violation
statutory penalty if such dispute is from an ERISA plan, rather state
laws may provide administrative enforcement for noncompliance of state
laws, such as utilization review, external review, registration mandates
for TPA's and insurers, by insurers, TPA's and managed care
organizations. Such state administrative enforcement will not directly
interfere ERISA claim adjudications, but will practically resolve ERISA
claim disputed medical issues, such as medical necessity as in Moran's
case, as required by
ERISA
claim regulation [Page 70269] that an ERISA fiduciary must consult
with an
health-care professional [Page 70271]
for medical judgment consistent with state laws. However if state laws
enforced by Department of Insurance provide direct enforcement over
ERISA plan coverage dispute or direct penalties or interference in ERISA
benefits adjudications, such state laws will be preempted by ERISA
because they are impermissible connections and non ERISA remedies. This
important understanding and compliance may virtually eliminate
noncompliant ERISA loopholes, ultimately solve
managed care crisis for
this nation in absence of
Patient's Bill Of Rights.
Unfortunately, presently the
significance and clarification of U.S. Supreme Court rulings in Pegram
and Moran cases have not been realized and implemented by any
state through Department Of Insurance. (Although Illinois argued and
prevailed for Moran in Supreme Court,
it failed to realize or implement Moran's ruling in its
administrative enforcement over mixed treatment and eligibility/mixed
quality and quantity/non ERISA fiduciary functions under its
utilization review and external review state laws involving ERISA plans)
"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"
"The term `health care professional' means a
physician or other health care professional
licensed, accredited,
or certified to perform specified health
services
consistent with State law." [page
70271
CFR § 2560.503-1(m)(7)]
"medical doctors in Texas"
=
MD licensed to practice medicine in Texas
for a Texas ERISA case;
"a medical professional in the
relevant area"= relevant area of state laws in license
jurisdiction, scope of practice and relevant local standard of care;
"licensed"
= licensed by the State Government/licensing board;
"to
perform"
= to practice medicine or health care services in the
State;
"specified
health services"
= medical procedures or services being reviewed or denied, instead of
file review or insurance coverage reviews
services;
"consistent with State law"
= consistent with State laws where the health care professional is
legally licensed to practice medicine or health care services with
respect to state jurisdictions, scope of license and state local
medical standard of care.
"The term `health care professional' means, in layman term, a
physician or other health care professional who is at least licensed in
your state (and more, board certified too) to practice the
specified/specific health services being reviewed or denied of your
claims, consistent with your state law jurisdiction, scope of practice
and local medical standard of care. Someone who is not licensed to
practice the same health care services specified/denied in your claims
is not qualified as an "appropriate health care
professionals" as defined under ERISA
§ 2560.503-1(m)(7).
Someone who is not licensed in your state to
practice "specified health services" but who is merely registered under
state or other means (URAC, IME, SSD or Peer Reviews) to do Utilization
Reviews (UR)
is not qualified as an "appropriate health care
professionals" as defined under ERISA
§ 2560.503-1(m)(7).
Seminars are scheduled for Florida, Ohio,
Massachusetts and Arizona, beginning in June 2004. The program
will emphasize the obligation of plan sponsors and other
fiduciaries to:
Understand the terms of
their plans;
Select and monitor service
providers carefully;
Make timely contributions
to fund benefits;
Avoid prohibited
transactions; and
Make
timely disclosures to workers and their beneficiaries and
reports to the government.
Both
Aetna and CIGNA have agreed to
settle the class-action lawsuits by 950,000 physicians and agreed to
process appeals in accordance with ERISA
claim regulations for both ERISA claims and
non-ERISA claims, and to establish external review boards for
Billing and Coding Disputes,Medical Necessity Disputes and
Policy Coverage Disputes, in compliance with state external
review laws, however external reviews will not be available until
internal appeals/ERISA appeals are completely exhausted.
Unless physicians understand and complete ERISA internal appeals, all of
those
"a love fest"
and
"victories" from class-action settlements would mean a fantasy of
"a love fest"
to any physicians.
November 8, 2002. Excerpt: "[W]e heard from an
extraordinary array of able and thoughtful individuals, some
representing professional organizations and some speaking on their own
behalf.... There were ... important differences in perspectives, but
there was also a surprising amount of agreement on where education can
help fiduciaries perform better. We strongly urge
anyone interested in the issue of fiduciary education to read through
the transcripts of our work group's hearings ..."
Excerpt: "This primer ... examines the structure and operation of private
health insurance-- including the types of organizations that provide it, how
managed care is delivered, and how risk pools work-- and describes how
private health insurance coverage is regulated under state and federal laws.
The primer explains how the current nature of private insurance relates to
key issues facing federal and state policymakers."
Excerpt:
"Model Helps Ensure Consumer Health Insurance Claims are Subject
to a Fair Review
PHILADELPHIA (June 9, 2002) — Members of the National
Association of Insurance Commissioners (NAIC) today adopted the
Discretionary Clause Model Act at the association’s Summer National
Meeting here.
The act, which was developed by the NAIC’s ERISA Working Group,
prohibits the use of discretionary clauses in health insurance
contracts.
“Discretionary clauses are an effort to give an insurance company full
and final discretion in interpreting benefits and administering an
insurance contract,” said Maryland Insurance Commissioner Steve Larsen,
who chairs the Health Insurance and Managed Care Committee. “This places
consumers at a significant disadvantage when they are seeking to
overturn the denial of benefits under an insurance policy.”...."
79 pages; revised
September, 2002. Excerpt: "The first part of this booklet ... focuses on
what constitutes an ERISA-covered plan and the regulatory and
enforcement authority of the Department of Labor over such plans. The
second part ... focuses on what is and what is not a MEWA and the extent
to which states are permitted to regulate MEWAs that are also
ERISA-covered welfare benefit plans."
Excerpt: "ERISA prevents
states from directly regulating health insurance arrangements
established by employers, but allows states to regulate the indemnity
insurers and health plans with which employers contract.... [C]onsumer
protections vary depending upon whether an employer decides to retain
the risk of paying medical claims (that is, to 'self-insure' the
employee plan) or to purchase group insurance from a state-licensed
insurer or managed care organization."
Excerpt: "Context Congress
and state legislatures are considering patient bills of rights that
seek to strengthen opportunities for patients to have denials of
coverage reconsidered by their health plans. Little is publicly known
about such appeals systems."
Excerpt:
"Regulations issued by the Clinton administration in 2000 were
designed to infuse rigor into the appeals process maintained by
employer-sponsored health plans covered by the Employee Retirement
Income Security Act (ERISA),10 which governs insurance
arrangements for more than 150 million workers and their family
members. Whether these rules will be vigorously enforced remains to be
seen."
Excerpt: "Nearly
four in 10 Americans (38%) say they are very worried that the
amount they pay for health care services or health insurance will
increase, and a similar share (37%) is very worried that their
income might not keep up with rising prices over the next six
months."
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."
"Section 514(a) of
Title I of ERISA generally preempts state law purporting to
regulate an employee benefit plan covered under that title.
There are, however, exceptions to this general preemption
provision....
Accordingly, in the Department’s view, Title I of ERISA does not
preclude Georgia from applying its insurance law to the IUIIW
Fund as a MEWA in accordance with section 514(b)(6)(A) of ERISA,
as described above.(1)"
"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."
""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."
"The study said managed care probably has squeezed out all the
savings it can from the nation's health care system and that
employers are turning to other familiar devices such as
increasing premiums and co-payments to trim their costs"
Excerpt: "As doctors nationwide press Congress to
copy a California law that limits damages in malpractice
lawsuits, many in California-- including the governor and the
state medical society-- fear the federal legislation may
undermine state HMO reform efforts.... Washington efforts to
borrow a page from Sacramento, however, may stamp out a
cornerstone of patients' rights here: the ability to sue HMOs
for unlimited damages."
