The Maul Firm, P.C.

Health Law and Policy

Anthony F. Maul is an attorney and public policy consultant with over a decade of experience in complex and class action litigation. With a practice focused on health care advocacy and reform, Mr. Maul provides expert legal and consulting services to patients, providers and professional associations.

Filtering by Tag: ERISA

Court Blesses Provider Class Action Challenging Horizon's Bundling Policies

Judge William J. Martini of the District of New Jersey has granted class certification in an action by chiropractors challenging the bundling practices of Horizon Blue Cross Blue Shield of New Jersey ("Horizon").  The action asserts claims under ERISA and the common law stemming from Horizon's practice of incorporating payments for evaluation and management ("E/M") and physical therapy ("PT") services into a single "global fee" for chiropractic manipulation.

In granting class certification under both Fed. R. Civ. P. 23(b)(3) and (b)(1)(B), Judge Martini opined that the plaintiffs presented evidence that Horizon's systematic denial of E/M and PT services violated the terms of all of the relevant health plans and provider agreements.  As a result, the class certification motion posed a "simple, concrete question":

Can the Court fairly and efficiently determine whether the bundling policy violated the rights of the proposed classes? Or do the individual inquiries that will be required to ultimately determine what, if any, actual damages each class member gets, pose such an overwhelming problem as to make class certification impractical and unfair? On the evidence produced, the Court can indeed determine, on a class-wide basis, whether the bundling policy violated ERISA or breached all the non-ERISA contracts in this case.

Significantly, Judge Martini also held that questions regarding provider assignment of benefits, or the potential applicability of anti-assignment clauses, did not pose individual issues sufficient to defeat class certification. This is because the claim forms submitted by the class members to Horizon all contained an assignment of benefits, and Horizon's course of dealing with those class members rendered any anti-assignment clauses "null and void." That holding is of a piece with similar findings reached by Judge Debevoise when he similarly certified a provider class in the Premier v. UnitedHealth case we've discussed previously. Together, these decisions confirm the ability of providers to challenge insurer claims practices through ERISA class actions.

The action is entitled Demaria v. Horizon Healthcare Services, Inc. and the Court's decision can be read here. The Maul Firm is collaborating on this case with class counsel Buttaci & Leardi LLC and Zuckerman Spaeder LLP.

Court Certifies Class of Providers Challenging Repayment Demands by UnitedHealthCare

Senior U.S. District Judge Dickinson R. Debevoise of the District of New Jersey has certified a class of healthcare providers challenging UnitedHealthCare's ("UHC") policy of issuing repayment demands to out-of-network providers without complying with the notice and appeal rights mandated by the Employee Retirement Income Security Act ("ERISA"). The plaintiffs representing the certified class are a midwest-based provider of durable medical equipment and a surgical center operating in Beverly Hills, California. The case is entitled Premier Health Center, P.C. et al. v. UnitedHealth Group, et al., No. 11-425 (ES) (D.N.J.).

The Court's opinion can be viewed here. In finding that the plaintiffs satisfied the requirements for certification under federal rules, Judge Debevoise reaffirmed an earlier holding that UHC's repayment demands violate ERISA rules in at least three respects common to the class:

First, they fail to provide “[a] description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under section 502(a) of [ERISA] following an adverse benefit determination on review.” 29 C.F.R. § 2560.503–1(g)(1)(iv). Second, they fail to indicate that the provider, “upon request and free of charge, [will have] reasonable access to, and copies of, all documents, records, and other information relevant to the” overpayment determination. 29 C.F.R. § 2560.503–1(h)(2)(ii). Third, they fail to “[p]rovide claimants at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination.” 29 C.F.R. § 2560.503–1(h)(3)(i).
Defendants fail to provide any evidence whatsoever that United substantially complied with the three aforementioned ERISA regulations....

The class representatives are joined as plaintiffs in the lawsuit with several national and state associations of chiropractors. In addition to challenging UHC's repayment demands, these chiropractic associations have also asserted claims challenging UHC's practices with respect to provider profiling, pre-authorization and utilization review.

The plaintiffs are represented by Zuckerman Spaeder LLP, Buttaci & Leardi LLC and the Maul Firm P.C. Out-of-network providers with pending repayment demands from UHC or its subsidiaries are encouraged to e-mail attorney Anthony F. Maul.

Class Action Alleges Improper Denial of Mental Health Benefits by UnitedHealthCare

In collaboration with Psych-Appeal Inc. and Zuckerman Spaeder LLP, the Maul Firm has filed a nationwide class action alleging that UnitedHealthCare improperly denies benefits for mental health care in violation of ERISA and the Mental Health Parity and Addiction Equity Act. In particular, the lawsuit alleges that United's use of overly-restrictive coverage criteria for mental health services violates both the mental health parity laws and the terms of United members' insurance contracts.

Details of the class action, captioned Wit v. UnitedHealthCare Insurance Company, 3:14-cv-02346 (N.D. Cal.), are described in a press release issued by Psych-Appeal Inc. 

Court Issues Permanent Injunction Against Independence Blue Cross on Behalf of Maul Firm Client

On May 19, 2014, U.S. District Court Judge Matthew Kennelly of the Northern District of Illinois issued a permanent injunction requiring Independence Blue Cross ("IBC") to provide ERISA-compliance due process when issuing repayment demands to members of the Pennsylvania Chiropractic Association ("PCA"). The injunction follows the Court's trial decision, in which Judge Kennelly held that IBC systematically violated the rights of PCA members by seeking to recoup money from them without affording them the informational items and appeal processes required by ERISA. Judge Kennelly also issued an opinion and order along with the injunction.

The case is a landmark achievement, as it is the first time a provider association has achieved permanent injunctive relief under ERISA on behalf of its members. At trial, attorney Anthony F. Maul of the Maul Firm was co-lead counsel to the PCA. 

Third Circuit Deals a Big Blow to Mandatory Arbitration of ERISA Claims Brought by Providers

A recent decision of the US Court of Appeals for the Third Circuit deals a one-two punch in favor of providers seeking to assert ERISA claims based on assignments of benefits from their patients. The decision,CardioNet, Inc. v. Cigna Health Corp., 13-2496, 2014 WL 1778149 (3d Cir. May 6, 2014), is sure to become an important precedent for provider ERISA suits within the Third Circuit and beyond.

The CardioNet decision breaks new ground in two major respects. First, it represents the first time the Third Circuit has held "that health care providers may obtain standing to sue by assignment from a plan participant." Id. at *9 n.10. While The Third Circuit had previously, in Pascack Valley Hosp., Inc. v. Local 464 A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400 n.7 (3d Cir. 2004), recognized that a majority of its sister circuits endorsed the concept of provider standing through assignment, the Court had declined, until now, to adopt that position itself. Numerous district court cases have presumed the Third Circuit would rule this way if the question were ever squarely before it. Now we know that presumption was accurate.

Perhaps more importantly, however, CardioNet also creates significant new law regarding the enforceability of arbitration clauses contained in participating provider agreements. The defendant, Cigna, sought to apply the arbitration clause to CardioNet's ERISA claim for benefits. The Third Circuit, however, construed the arbitration clause narrowly and held that it applied only to operation of the provider agreement, not a claim for coverage under the terms of the applicable health plan. 2014 WL 1778149, at *9. Moreover, the Third Circuit went on to state that even if the dispute did fall within the scope of the arbitration clause, the fact that CardioNet was derivatively bringing its claims on behalf of its patients meant that the arbitration clause did not apply. Id. at *10.

Prior to this decision, defendants had been very successful in dismissing ERISA claims brought by in-network providers where the provider agreement included an arbitration clause. It appears that tactic will no longer be viable in the Third Circuit. And, when paired with new US Department of Labor regulations that limit mandatory arbitration of adverse benefit determinations, 29 C.F.R. § 2560.503-1(c), the CardioNet decision may mean that mandatory arbitration of provider ERISA claims will be a thing of the past.

Federal Law Prohibits Group Health Plans from Discriminating Against Providers

Under current federal law, group health insurance plans are prohibited from discriminating against any health care provider acting within the scope of her license or certification. The so-called "Harkin Amendment," passed as part of the Patient Protection and Affordable Care Act, created Section 2706(a) of the Public Health Service Act. It provides that:

A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law. This section shall not require that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation established by the plan or issuer. Nothing in this section shall be construed as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.

Section 2706(a) is codified at 42 U.S.C. § 300gg-5(a). It is also incorporated into the group health plan requirements of the Employee Retirement Income Security Act ("ERISA") by 29 U.S.C. § 1185d.

The statute prohibits discrimination against providers with respect to both network participation and coverage. That means that insurance companies that issue or administer group plans cannot categorically exclude providers from their networks based on provider type. It also means services that are covered when performed by one type of provider must be covered when provided by other types (so long as the services in question are within the scope of the providers' licenses).

Of course, Section 2706(a) does not define the term "discriminate," and there remains some confusion over its precise meaning.  The US Department of Labor ("DOL") is currently seeking public comment on the subject, after the Senate Appropriations Committee (of which Sen. Harkin is a member) criticized an earlier FAQ on Section 2706(a) issued by the DOL. One would expect that the DOL will issue additional guidance once the comment period expires on June 10, 2014.

The Maul Firm is currently investigating potential violations of Section 2706(a) by various insurance carriers.  

The Maul Firm Wins Trial Victory Against Independence Blue Cross

On March 28, 2014, the Honorable Matthew F. Kennelly of the U.S. District Court for the Northern District of Illinois issued a trial decision in favor of the Pennsylvania Chiropractic Association ("PCA") in a case against Philadelphia-based insurance company Independence Blue Cross ("IBC"). The Maul Firm's principal attorney, Anthony F. Maul, represented the PCA as co-lead counsel in a bench trial held in December 2013.  

In Pennsylvania Chiropractic Association v. Blue Cross Blue Shield Association, Mr. Maul and his co-counsel brought suit on behalf of various health care providers and professional associations. The lawsuit challenged the practice by IBC and other Blue Cross Blue Shield entities of issuing repayment demands to in-network providers without providing them the notice and appeal rights required by the Employee Retirement Income Security Act ("ERISA") and the U.S. Department of Labor regulations promulgated thereunder.

Judge Kennelly's decision is a complete victory for the PCA, ruling in its favor on every legal and factual issue contested in the trial. In particular, Judge Kennelly held that IBC's practices "come nowhere near substantial compliance with ERISA's notice and appeal requirements," and that the PCA was entitled to permanent injunction enjoining those unlawful practice.

The ruling establishes several ground-breaking precedents that strengthen the rights of providers facing repayment demands: it is the first trial decision holding that repayment demands constitute "adverse benefit determinations" under ERISA; it is the first time a court has held that in-network providers who receive direct payment from insurance companies are ERISA "beneficiaries"; and it is the first case in which a provider association has prevailed at trial on ERISA claims.

The Maul Firm is counsel in similar litigation against United Healthcare, Aetna and other insurers.

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