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Haynes and Boone’s Newsroom – E-Benefits Newsletter, March 2, 2010

A U.S. District Court held that a health plan’s third-party administrator breached its fiduciary duties under ERISA by failing to exercise due care and by failing to administer the plan in accordance with plan documents when it overpaid medical claims. Notwithstanding the fact that the TPA contract disclaimed fiduciary status, the court held that the TPA was an ERISA fiduciary because it exercised discretionary control over plan assets. Hartsfied, Titus & Donnelly LLC v. Loomis Co., D.N.J., No. 08-3329 (WJM) (Feb. 16, 2010).

Robert A. Berenson, Paul B. Ginsburg and Nicole Kemper3

Faced with declining payment rates, California providers have implemented various strategies that have strengthened their leverage in negotiating prices with private health plans. When negotiating together, hospitals and physicians enhance their already significant bargaining clout. California’s experience is a cautionary tale for national health reform: It suggests that proposals to promote integrated care through models such as accountable care organizations (ACOs) could lead to higher rates for private payers. Because antitrust policy has proved ineffective in curbing most provider strategies that capitalize on providers’ market power to win higher payments, policy makers need to consider approaches including price caps and all-payer rate setting.

David Whelan

The White House continues to demonize the insurance industry for big rate increases as it pushes for health reform. It called the CEOs of five big HMOs on the carpet today in a White House meeting with Health Secretary Kathleen Sebelius. Afterwards, two of the participants–UnitedHealth chief Stephen Hemsley and WellPoint honcho Angela Braly–held a conference call organized by the industry lobby America’s Health Insurance Plans. Read more

President Obama Calls on Congress to Move Forward with Reform

Moments ago, President Obama gave a public statement urging Congress to move forward with its healthcare reform effort. The President stated that reform has been debated for over a year and that any more debate would not do any more good. Republicans have contended that the Democrats start over and work with them on a joint bill. President Obama also emphasized that reform should be considered by an “up or down” vote, paving the way for Democrats to pass healthcare reform through reconciliation. Read more

The Ohio Bar Association’s new Subrogation Committee held its first meeting today to try to formulate what the purpose of this committee is. The committee developed a working statement which states as follows: “Parties injured by a wrongdoer often are not receiving full or fair compensation in part because of subrogation laws of Ohio.” The Committee does contain one subrogation attorney Dennis Rehor of Cincinnati Insurance company. The Committee will attempt to reconvene to discuss this statement of principle on April 14th, 2010 at 10:30 A.M. The Ohio Bar Association hopes to have some proposals considered again at its meeting during its yearly convention in Dayton in early May. Ohio subrogation attorneys who are members of the OSBA need to make sure they check the OSBA’s website regularly as they hope to post information regarding the work of this Committee.

President-Elect Kenneth Levine and Amicus Committee Chair Daran Kiefer spent Monday February 22nd in Colorado with several NASP members and industry lobbyists testifying in opposition to House bill 1168. During the eight hours at the Capital, the parties supporting this bill agreed to several amendments. First, the bill was amended to eliminate property, workers’ compensation and auto subrogation from its reach. As for health subrogation, the proposed amendments require the injured party to provide information about the settlement and available limits. The amended bill calls for a rebuttable presumption of “full compensation” when insurance limits are not received. The amended bill also provides that a party’s full compensation value is equal to any jury award. The health subrogation industry will be impacted if this bill passes and becomes law in Colorado. The House Judiciary Committee approved the measure 10-0 with one abstention.

The South Dakota bill would prohibit a subrogated insurer from participating in any recovery for “bodily injury” or “property damage” unless or until the injured party is “made whole”. S.D. Senate bill 169 failed to pass the Senate on February 22, 2010. However, the Senate reconsidered the bill on February 23rd, 2010 which resulted in a tie. The tie was broken by the Senate President and Lt. Governor. The bill now heads to the House for consideration.

The New Hampshire House Judiciary Committee reviewed and recommended a bill recently pertaining to contract, Medicaid or statutory subrogation rights of subrogation for “”reimbursement of medical expenses” against plaintiff’s recovery. The proposed bill requires these subrogated entities to pay costs and attorney fees to the injured party “as justice requires”. The bill does not give any direction on how the court should divide the proceeds other than “as justice requires”. However, the bill does provide a cap and states the insurance carrier, medical provider, or the state shall not be awarded more than two thirds (2/3) of the amount claimed. The bill would apply to health, auto medical payments and worker’s compensation lines of coverage. The effective date of the bill if passed would be January 1st, 2011.

Economy, rising costs raise concerns about future affordability

Joanne Wojcik

Employers’ inability to control health care costs and uncertainty about the effects of federal health reform have many rethinking their commitment to providing health care benefits, a survey concludes. Read more

After regrouping, lawmakers seek new path to passage

Jerry Geisel

WASHINGTON—President Barack Obama and top congressional Democrats are preparing to mount a new and perhaps final drive to pass health care reform legislation. Read more

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Makes Subrogation Professionals look like bad guys! Hilarious!

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Please click below to view bulletin.

Bulletin 371

Prosecutors are seeking documents from Anthem, Aetna, Cigna, Blue Shield, Kaiser, Health Net and PacifiCare in a probe of whether they raised rates illegally and denied payment of legitimate claims.

February 25, 2010|By Duke Helfand and Marc Lifsher

Reporting from Sacramento and Los Angeles — The California state attorney general’s office said Thursday that it had subpoenaed financial records of California’s seven largest health insurance companies as part of an investigation into whether they illegally raised customer premiums and denied payment of legitimate claims. Read more

By AVERY JOHNSON

A battle over who to blame for rising health-care costs is escalating, as groups seek to pin the problem on each other and say none of the health-care legislation under consideration does enough to solve it.

U.S. spending on health care reached $2.5 trillion in 2009, according to federal estimates. It is expected to jump to $4.5 trillion in 10 years. Read more