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Running an employee benefit claims operation is a complex undertaking, which requires continual training and oversight. A robust quality assurance organization can play an important part in the overall management mix. Curran v. Aetna Life Ins. Co., 13-cv-289, 2016 WL 3843085 (S.D.N.Y. July 11, 2016), gives a concrete example of a quality assurance review catching a significant error that would have resulted in an incorrect six-figure payment, and documenting the correction of the problem in a responsible, non-biased way. I always think that an organization’s strength is best revealed by how it responds to a problem, so Aetna deserves a gold star for this case.
Continue Reading Internal quality assurance discussion about $100,000 error in plan interpretation not evidence of conflict

In Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016), the Second Circuit made a significant change to the impact of ERISA claim regulations on subsequent litigation, rejecting the rule that it is sufficient for claim administrators to substantially comply with the regulations. Instead, the court held that, unless there is strict compliance with the regulations, courts will ordinarily conduct a de novo review of claim determinations, though it established a path for administrators to retain the arbitrary and capricious standard of review.
Continue Reading Second Circuit rejects “substantial compliance” rule

There is a lot about ERISA litigation that is hard to understand, but perhaps the most opaque issue is subrogation, which is the law governing when and how plans can recover benefits from participants. It seems that the Supreme Court is constantly changing the rules (while denying that it’s changing the rules), based on its interpretation of old treatises written about procedure in courts that don’t exist anymore.
Continue Reading Another SCOTUS subrogation decision, and another deep dive into equity treatises

About twenty states, including Vermont, have passed laws requiring all entities that provide health care services to report information to a state agency; these are called “all payer claims databases” or APCDs. Though they may have many purposes, they all generally are intended to enforce a universal and consistent (within the particular state, at least) submission of data that permits study, evaluation, manipulation and dissemination of the data, with an aim of improving health care outcomes and reducing costs. Of course, each state that establishes an APCD likely will have its own requirements, scope and format, which likely will differ in some respects from other states’ APCDs. And because a primary intent of ERISA was to avoid such patchwork, state-by-state regulation of employee benefit plans, a conflict was inevitable.

That conflict came to a head in Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016), and the Supreme Court held that ERISA won, by preempting Vermont’s APCD law.
Continue Reading ERISA preempts state-required “all payer claim databases” (APCD)

In Penn. Chiro. Assoc. v. Independence Hosp. Indem. Plan, Inc., — F.3d –, 2015 WL 5853690 (7th Cir., Oct. 1, 2015), two chiropractors who had signed preferred provider agreements with an insurer claimed that the insurer violated ERISA in determining payments to them. In particular, plaintiffs claimed that the insurer had improperly recouped overpayments without holding a hearing.

As the court described the function of the agreement: “Providers bill the insurer directly and do not know (or care) whether a given patient obtained the coverage as part of an ERISA welfare-benefit plan or through some other means, such as an affinity-group policy or an insurance exchange under the Affordable Care Act.”
Continue Reading Preferred provider agreements do not support ERISA claim

In Oregon Teamster Employers Trust v. Hillsboro Garbage Disposal, Inc., 800 F.3d 1151 (9th Cir. 2015), the corporate defendant, Hillsboro Garbage entered into contracts with a union health plan that provided coverage for Hillsboro’s union and non-union employees. Beginning in 2003, the union received contributions for the two individual defendants, who purportedly worked for Hillsboro, but actually were employed by a different company owned by Hillsboro’s owner. The plan covered these defendants until 2011, even though a 2006 audit showed that they were not eligible for coverage.
Continue Reading Ninth Circuit judge calls for en banc review to overturn Providence Health v. McDowell

In North Jersey Brain & Spine Ctr. v. Aetna, Inc., — F.3d –, 2015 WL 5295125 (3d Cir. Sep. 11, 2015), the court addressed the question “whether a patient’s explicit assignment of payment of insurance benefits to her healthcare provider, without direct reference to the right to file suit, is sufficient to give the provider standing to sue for those benefits under ERISA § 502(a)[.]”
Continue Reading Third Circuit Rules That Assignment of Plan Benefits Confers Standing to Sue

In Humana Health Plan, Inc. v. Nguyen, 785 F.3d 1023 (5th Cir. 2015), Humana entered into a Plan Management Agreement (“PMA”) with the API Enterprises Employee Benefits Plan. The PMA stated that API had the right to make all discretionary decisions about the plan’s administration and management. The PMA authorized Humana to provide “subrogation/recovery services” to the plan.
Continue Reading Plan Manager Was Not a Fiduciary For Purposes of Subrogation Claim Standing

Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 529 (2013), held that a contractual limitation period in an ERISA plan is enforceable as written unless the period is unreasonably short, or a “controlling statute prevents the limitations provisions from taking effect.” In Heimeshoff, there was no dispute that the contractual limitation provision was consistent with the law of the forum state (Connecticut). But what happens when the contractual limitation period is shorter than the minimum period allowed by applicable state law?
Continue Reading State Law Is Not A “Controlling Statute” Overriding Contractual Limitation

In Central States, Southeast & Southwest Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150 (2d Cir 2014), the Second Circuit joined the Fifth Circuit in ruling that an ERISA health plan generally has no equitable remedy against another insurer in a coordination of benefits dispute.
Continue Reading Coordination-of-Benefits Claim Is Not Equitable