Archive for the ‘Federal Circuits’ Category

Most lawsuits to recover damages in car accidents are resolved in state courts.  State courts will order that at least a portion of the judgment be deposited into court when it appears that a health plan may have the right to reimbursement.  But can a state court override the right of the health plan to recovery? This issue was addressed in Iowa Health System, Inc. v. Graham, 2008 WL 2959796 (C.D. Ill., July 30, 2008). Read more

The U.S. District Court in North Dakota recently sorted out conflicting COB provisions of motor vehicle and health coverage. The court ruled that the motor vehicle policy had to pay its maximum benefits before the health plan began paying its benefits.  In the North Dakota case, an auto policy restricted benefits to $5,000 in the event the policyholder is covered by another policy; the health plan mandated that the auto insurer must pay up to its policy limit before the plan would begin paying. The court upheld the health plan’s decision. Read more

TPAs rely heavily on ERISA’s requirements that claimants must exhaust their administrative remedies before going to court, and when they do sue, assuming that the Plan documents grant the claim administrator the appropriate discretionary authority, they must show that the claim administrator abused its discretion when denying their claim, before any court will get to the merits of their allegations.

Few plaintiffs are able to meet these burdens, and so either don’t sue or often get their lawsuits quickly dismissed.  Until recently most courts were not very sympathetic to plaintiffs’ arguments of procedural violations, but things are changing, the most significant development being the Supreme Court’s decision this summer in MetLife v. Glenn. Read more

Latest Article From AM News Staff

By Amy Lynn Sorrel 

The decision could lay the groundwork for a U.S. Supreme Court fight over “pay or play” laws requiring companies to pitch in for health coverage.

A recent federal appeals court ruling may open the door for states looking to experiment with employer mandates as part of health system reform.

A panel of the 9th U.S. Circuit Court of Appeals unanimously upheld San Francisco’s initiative requiring businesses to spend a minimum level of money on workers’ health care, rejecting arguments that the federal Employee Retirement Income Security Act preempted the city ordinance. Read more

The Ninth Circuit has a decision of first impression concerning issue exhaustion and ERISA in the denial of benefits context.  In Vaught v. Scottsdale Healthcare (9th Cir 09/29/2008), the Ninth Circuit declined to impose an “issue exhaustion” requirement under ERISA.

Vaught sued his healthcare plan under ERISA asserting a claim challenging the plan’s decision denying his claim for benefits.  The trial court granted summary judgment in favor of the plan.  The 9th Circuit reversed as to that claim. Read more

When negotiations concerning a possible settlement of plaintiff’s subrogation claim failed, Ms. DeBoer demanded her share of the settlement, and the attorney defendants paid over to her the amounts they had recovered, less their counsel fees and expenses. In doing so, they carefully notified Ms. DeBoer of her obligation to repay the plaintiff’s subrogation claim, and obtained from Ms. DeBoer an agreement to indemnify them against any claims which might ensue because they had paid over the proceeds to her. The present lawsuit followed. Read more

In a decision that could set the stage for a test of the supremacy of a longstanding federal labor law, a panel of federal judges found Tuesday that San Francisco had the right to charge employers to help pay for its universal health care plan, the first in the nation.

The ruling, by a three-judge panel of the United States Court of Appeals for the Ninth Circuit, affirms a January decision by the same panel that required all but the smallest businesses in the city to contribute to employees’ health care costs or pay a fee to help the city provide care.  San Francisco officials hailed the decision as a major victory for its plan, called Healthy San Francisco, to provide health care for some 73,000 uninsured residents. Read more

The parents of a minor child sued their health plan insurer when it denied their daughter’s claims for benefits.  The parents argued that the insurer failed to comply with a state external review law for insurers, which required an independent review process for denied claims. The insurer asked the court to dismiss the claim, arguing that the state external review law was preempted by ERISA. Read more

On September 22, 2008 the Fifth Circuit issued its decision in Young v. Wal-Mart Stores, Inc., et. al.

The case involved an ERISA claim for accidental death and dismemberment (AD&D) benefits in the amount of $25,000. The decedent suffered from a history of severe hypertension. He stopped taking his medication, became very ill and began vomiting profusely and choked to death. The policy provided an exclusion for losses related “in whole or in part from…sickness.” Read more

The Supreme Court held in MetLife vs. Glenn that conflicted interests require a higher standard of review whenever the claims adjudicator and the claims financier were the same.  Thus, any claim contested in court will confer a significant advantage to the arrangement where the claims are adjudicated by an independent third party and paid by an independent employer.  This means a disadvantage where the claims are both adjudicated and paid by the same two parties, such as employer’s self-administered and self-funded plan or fully insured plans. Read more

ERISA preempted an Illinois state law outlawing any claim on a workers’ compensation award, because the law related to benefits plans regulated by ERISA, a federal trial court decided. As a result, an employer may seek reimbursement of group health plan funds from workers’ compensation awards. The health plan paid the expenses before a determination was made that the claims were work related. The court determined that the settlements included reimbursement for health expenses that were paid by the plan. At least one of the awards was worded to assert that it was not a payment for health benefits, but the judge said that was an effort to stop a recovery attempt. Read more

In the case of Franciscan Skemp Healthcare, Inc. v. Central States Joint Board Health & Welfare Trust Fund No. 07-3456 (7th Cir.)(July 31, 2008), the Seventh Circuit Court of Appeals determined that when a party files a pure state law claim against an ERISA plan, preemption to Federal Court is improper. Read more

The United States District Court for the District of New Jersey, following a hearing on July 24, 2008, has approved a $250 million settlement in the matter of plan members versus Health Net, Inc.  Read more

The 7th Circuit Court of Appeals has just held in Pakovich v. Broadspire Services, Inc., that when a plan administrator fails to issue a benefits determination, and there is no administrative decision regarding a claim on record, the Court is not to make a decision in lieu of the administrator.  Instead, the case is remanded to the administrator, who must make a clear benefits determination decision.  Only after all administrative options are exhausted may either party to said decision appeal the decision to the Federal Courts under ERISA.

http://wislawjournal.com/article.cfm/2008/07/28/071520-Pakovich-v-Broadspire-Services-Inc Read more

Diamond Crystal Brands, Inc. v. Wallace, 531 F.Supp.2d 1366 (N.D. Ga.2008)

After the negligent medical care and consequential death of Deborah Hayes, the Estate and her daughter Tamara Hayes pursued a wrongful death claim against the hospital.  In Georgia State Court plaintiffs settled for $900,000, of which $837,000 went to Tamara Hayes and $63,000 to the Estate of Deborah Hayes.

Prior to Deborah Hayes’s death, her employer, Diamond Crystal provided $261,863.58 in medical benefits related to the medical malpractice.  After the settlement, Diamond Crystal sought reimbursement of claims paid. Read more