On January 15, 2019, in what turned out to be a belated Christmas gift for patients, out-of-network medical providers and self-insured health plans, the 8th Circuit Federal Appeals Court stood with out-of-network medical providers, ruling they have standing to sue opposing UnitedHealth’s “cross-plan offsets”- by affirming the district court and opining:
“Because United’s interpretation of the plan documents is not reasonable, we affirm the district court’s grant of partial summary judgment to the plaintiffs.”
This bellwether appellate court decision undisputedly strikes a death blow to the collective, industry standard, practice of “cross-plan offsetting” and has national implications for patients, medical providers and self-insured health plans. As we have written about before, the No. 1 health care claims denial in the country is “overpayment” recoupments through “Cross-Plan Offsets”; correspondingly, the No.1 hidden cost for Self-Insured health plans, is “Overpayment” recoupment through “Cross-Plan Offsets” and subsequent embezzlement of plan assets as UnitedHealth Group continues to see record revenues and earnings year after year.
With the new legal guidance this landmark case provides, self-insured plan sponsors, like AT&T and Gap Inc. may be held accountable for allowing United to engage in likely ERISA violations such as embezzlement, conversion, self-dealing and breach of fiduciary duty.
According to industry estimates, the total dollar amount at issue nationwide could be as high as 1/3 of total claim expenditures annually. Successful industry overpayment recoveries have reached into the trillions of dollars nationwide over the past decade and involve many large carriers as well as many of the nation’s biggest self-insured health plans such as Apple, JP Morgan Chase and Amazon. Thus recoupment through offsetting, when used as an anti-fraud initiative, has become an increasingly popular source of revenue for many of the nation’s largest insurers. While there is a need for anti-fraud initiatives in healthcare today, it is critical that every health plan and claims administrator comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties.
This 8th Circuit Court of Appeals decision, along with the recent Supreme Court decision in Montanile, should act as a wake-up call to all self-insured health plans for potential rewards in the trillions of dollars in plan assets recovery for all self-insured ERISA plans nationwide, from cross plan overpayment recoupments and offsets done by all plan TPAs.
Insurers and Health Plans must comply with all applicable federal laws, ERISA and PPACA claims regulations, as well as statutory fiduciary duties before recouping one single dollar.
In affirming the district court’s ruling, the 8th Circuit rejected United’s argument that Dr Peterson lacked authority to sue as an authorized representative of his patients. The appellate court also affirmed the district court’s ruling regarding offsets, where all of the plan documents that United cited explicitly authorized same-plan offsetting; and not one of those plans authorized cross-plan offsetting.
The appeals court further posited:
“To adopt United’s argument that the plan language granting it broad authority to administer the plan is sufficient to authorize cross-plan offsetting would be akin to adopting a rule that anything not forbidden by the plan is permissible.”
According to court records, “United’s assertion that it has the authority to engage in cross-plan offsetting can hardly be called an interpretation because it has virtually no basis in the text of the plan documents.”
The appeals court also maintained, that regardless of whether cross plan offsetting violates ERISA, it is at the very least, a questionable practice. Taking into consideration the fact that there is no plan language authorizing cross-plan offsetting, the appeals curt ultimately concluded that United’s interpretation is not reasonable.
As we have mentioned many times before, all ERISA health plans, medical providers and patients must educate themselves in order to understand the facts of these cases. Health plans must be proactive in ensuring benefits are adjudicated and ultimately paid solely based on the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Medical providers must be also proactive and adopt compliant practices and policies. Patients must understand their benefits plans and their rights as allowed under ERISA.
Avym Corp. has advocated for ERISA plan assets audit and embezzlement recovery education and consulting. With new Supreme Court guidance on ERISA anti-fraud protection, we are ready to assist all self-insured plans recover billions of dollars of self-insured plan assets, on behalf of hard-working Americans. To find out more about Avym Corporation’s Fiduciary Overpayment Recovery Specialist (FOR) and Fiduciary Overpayment Recovery Contractor (FORC) programs contact us.