By: Matt Fischer
Litigation involving out of network claims by providers, also referred to as “non-participating” or “non-par”, continues to be rampant into 2019. Complexity of plan administration, increased state and federal rule making, and rising costs are resulting in increased litigation. A recurring issue: unpaid claims disputes.
Many physicians come to the conclusion that some contracts aren’t worth entering. More and more physicians are opting out of participating provider contracts or have chosen not to participate in the first place. Reimbursement is usually the prime reason. The law that controls much of the litigation surrounding these disputes is the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that sets minimum standards for most plans along with fiduciary responsibilities for plan sponsors. Under ERISA, a “Summary Plan Description” must be created for each plan that sets forth the rights and benefits of each plan member and importantly, how out-of-network reimbursement is determined. read more
By: Jeff Cohen
A recent Texas District Court case took the usually frustrating ERISA dynamics applicable in payer provider disputes and upended them in a way that helped the provider. There (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division), the court was faced with an out of network hospital sued by CIGNA to recover payments made. In particular, the case involved—
- An out of network hospital (HSH);
- HSH set its prices higher than neighboring in network hospitals;
- HSH billed Cigna members for deductibles and coinsurance at in network rates, but billed Cigna on an out of network basis;
- Cigna alleged that the billing practices of HSH caused Cigna to pay more than its required share under applicable plans, even though plan members paid little or nothing at all;
- Cigna also alleged HSH paid owner physicians referral fees to induce patient referrals; and
- Cigna sought to recover payments made to HSH.
The case is a departure from the usual scenario, which involves (a) providers suing payers for payment and relying on state laws to do so, and (b) provides side stepping those state laws by successfully arguing that the federal ERISA law applies (which usually offers provides less favorable remedies). read more