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.

Attorney Anthony F. Maul Launches the Maul Firm, P.C.

On March 10, 2014, New York-based attorney Anthony F. Maul launched a new solo law and consulting practice. The Maul Firm will pursue complex and class litigation in the health care and insurance areas, and will offer sophisticated health policy consulting services to providers, facilities, companies and government entities.

The Maul Firm has its offices at 68 Jay Street in Brooklyn, New York.  Mr. Maul can be reached by email at afmaul@maulfirm.com.