Adam V. Russo | December 14, 2010

www.jonesday.com

On December 8, 2010, the U.S. Court of Appeals For the Sixth Circuit ruled in favor of Jones Day’s client Blue Cross Blue Shield of Michigan in an important case involving the scope of ERISA’s fiduciary conduct rules (DeLuca v. Blue Cross Blue Shield of Michigan). The case involved the question of whether Blue Cross acts as a fiduciary and is subject to ERISA’s stringent fiduciary conduct rules when it negotiates hospital reimbursement rates that apply to its self-insured book of business. (more…)

Category: 6th, ERISA, Michigan | No Comments »
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Adam V. Russo | December 14, 2010

By Tom Lawrence, www.healthsubrogationblog.com

A recurring issue for health plan subrogators is whether a state law — or federal common law — common fund doctrine requires a health plan to reduce it’s subrogation amount by one-third. In Electric Energy, Inc. v. Lambert, in the United States District Court for the Western District of Tennessee, No. 10-2629-STA-tmp (December 2, 2010), the Court held that the Illinois common fund doctrine was preempted by ERISA and plan language rejecting the common fund doctrine was sufficient to preclude application of a federal common law common fund doctrine. (more…)

Category: 6th, Plan Language | No Comments »
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Adam V. Russo | September 7, 2010

Summary

Federal district court in N.C. favors recovery after lien is dissolved by attorney – Denton is injured and gets a $100,000 settlement, her attorney takes $33,800 of that and disburses the remainder to Denton with a warning that her share could be recovered by the plan. The plan paid $48,250. The plan sued Denton and her attorney to recover. The court awarded the $48,250, but the attorney was not liable just because he disbursed the proceeds; and the proceeds were not traceable in a way similar to what’s now required under Sereboff. The court contrasted this from the 6th Circuit holding in Longaberger Co. v. Kolt (2009), which allowed recovery from a contingency fee paid to an attorney. The court noted the settlement allowed for paying the attorney and the plan with some left over for the participant.

Click here to see the entire case

Category: 4th, 6th, Attorneys' Fees, North Carolina, Reimbursement | No Comments »
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Adam V. Russo | July 9, 2010

This year, while the Sixth Circuit held that an illegal act exclusion could not be applied because of a lack of causation between the illegal act and the injuries for which benefits were sought, an Indiana district court found that an administrator’s decision to deny health benefits based on a plan exclusion was “not reasonable” even though it did not require the injury for which benefits are sought to be caused by the insured’s intoxicated state. In Shelby County Health Care Corp. v. Majestic Star Casino, LLC,184 plaintiff, acting pursuant to an assignment from its patient, challenged the ERISA plan administrator’s decision to deny the patient health insurance benefits. Plaintiff claimed that defendant improperly denied benefits for medical charges incurred by this patient, a plan insured, after he sustained injuries in a single-car accident while driving without a driver’s license or proof of insurance.185 Defendant denied benefits under the plan’s “illegal-act provision,” which excluded benefits for “any loss caused by, incurred for, or resulting from…[c]harges for or in connection with any injury or illness arising out of…the commission or attempted commission of an illegal or criminal act.”186 After rejecting the defendant’s attempt to assert a different basis for denial of benefits than that asserted by the claims administrator, the Sixth Circuit agreed with the district court that the term “illegal act” was ambiguous since it was undefined in the policy.187 It then found that a reasonable interpretation of “illegal act” might not include driving without insurance or driving without a license.188 Ultimately, since the record provided “no support for the assertion that driving without a license or driving without insurance ‘caused’ [the] accident and resulting injuries,” the Sixth Circuit upheld the finding that plaintiff erred in denying the claim for benefits.

Category: 6th, Exclusion, Summary Plan Description | No Comments »
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Adam V. Russo | July 9, 2010

Defendant-appellee Ken Ross is the commissioner of the Michigan Office of Financial and Insurance Services (OFIS). OFIS is responsible for licensing, examining, and supervising insurers and nonprofit health care corporations doing business in Michigan. To this end, OFIS’s authority includes the power to disapprove insurance policy forms and documents associated with such forms that are filed by insurers and nonprofit health care corporations doing business in the state. Under OFIS’s authority to regulate insurance, it promulgated rules, Michigan Administrative Code Rules 500.2201-500.2202 and 550.111-550.112, prohibiting insurers from issuing, delivering, or advertising insurance contracts or policies that contain “discretionary clauses” and providing that any such clause is void and of no effect. The rules took effect June 1, 2007. Given that employee benefit plans established or maintained under ERISA commonly contain discretionary clauses, the rules would prohibit any entity covered by them from “issuing, advertising, or delivering to any person in the State of Michigan, including an employee benefit plan subject to ERISA, an under-written policy or certificate that includes a discretionary clause.” (more…)

Category: 6th, ERISA, Flexible Spending Accounts, Michigan, Preemption, Summary Plan Description | No Comments »
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Adam V. Russo | May 17, 2010

Case: Galion Community Hospital v. Hartford Life & Accident Ins. Co,, No. 1:08-cv-1635, in the United States District Court for the Northern District of Ohio, Eastern Division, May 7, 2010).

Mr. Croft’s Comment: This case involves two arguably conflicting provisions in an advance funding endorsement concerning the timing of submission of requests for advance funding:

To be eligible for advance reimbursement with respect to an Agreement year, Your request must be received by Us no later than the 10th calendar day following the end of that Agreement Year, provided the agreement is in force on the date we receive the request. (more…)

Category: 6th, Federal Circuits, Ohio, Stop Loss | No Comments »
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Adam V. Russo | February 23, 2010

In Hall v. Liberty Life Assurance Company, No.s 08-4738/4739 (6th Cir. 2010), the plaintiff, . Sonya Hall, had received long-term disability benefits (the “LTD Benefits) for nearly five years through the National City Corporation Welfare Benefits Plan (the “Plan”). Liberty Life Assurance Company of Boston (“Liberty Life”), the third-party claims administrator, terminated the LTD Benefits when it determined that Hall was no longer totally disabled. The Plan then sought reimbursement for overpayment of the LTD Benefits, caused by retroactive Social Security benefits being awarded to Hall. Hall responded by filing suit against the Plan. (more…)

Category: 6th, ERISA, Federal Circuits | No Comments »
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Adam V. Russo | February 1, 2010

MyHealthGuide Source: Meredith Z. Maresca, BNA’s Pension & Benefits Daily, 1/27/2010, www.bna.com

In a decision addressing identification of the proper defendant in a benefit claim action brought pursuant to the ERISA’s civil enforcement provision, the U.S. District Court for the Southern District of Ohio held that the health plan’s TPA potentially could be liable for the alleged wrongful denial of benefits to cover a beneficiary’s bone cancer treatment. (more…)

Category: 6th, ERISA, Ohio | No Comments »
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Adam V. Russo | January 20, 2010

Sixth Circuit Court of Appeals, No. 04-4067, March 21, 2006

The Sixth Circuit Court of Appeals reversed a district court’s order that a health benefit plan must pay a hospital the full amount billed for services rendered to a plan beneficiary, and remanded for further proceedings.

A beneficiary of South Lorain Merchants Assn. Health & Welfare Benefit Plan and Trust (the “Plan”) was admitted to University Hospital of Cleveland (“UHC”) in 2000. For services rendered, UHC sent a bill in the amount of $195,000 to the Plan. Without notifying UHC, the Plan audited the bill and provided payment in the amount of $107,000, a reflection of both a $49,000 preferred provider network discount (“Discount”) and the audit’s finding that the charges exceeded the usual, customary and reasonable (“UCR”) amount for such services by $39,000. (more…)

Category: 6th, Federal Circuits, Usual and Customary | No Comments »
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Adam V. Russo | November 18, 2009

The law in many states provides that reimbursement to a plan from tort settlements or judgments will not be allowed unless the plan participant is “made whole.” Certainly, the plan participant is not made whole if the settlement or judgment is less than the amount of benefits paid. But even if the settlement or judgment id greater than the amount of benefits paid by the plan, the plan participant may not be made whole by it. Sometimes, it’s hard to draw a clear line to determine when a plan participant is or is not made whole. (more…)

Category: 6th, Made Whole Rule | No Comments »
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Adam V. Russo | November 18, 2009

Plan’s subrogation and reimbursement language may actually thwart their ability to recover from tort settlement proceeds benefits they paid. It is important for plan language to ensure that its recovery claim is limited to settlement proceeds. In one such case, a health plan did not identify a particular fund from which the reimbursement should be paid and it failed to say that the recovery was limited to third-party settlement proceeds. Because of the imprecise drafting, the court could assume the plan was trying to recover from the plan participant’s general assets. That created the possibility that a member could receive a recovery from a third party that was less than the benefit paid by the plan but would still have to repay the plan in full. As a result, the court found it impossible to award the recovery. (more…)

Category: 6th, 7th, Subrogation, Summary Plan Description | No Comments »
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Adam V. Russo | November 16, 2009

Please see the following 6th Circuit Decision brought to our attention by Daran P. Keifer, Esq. of Kreiner & Peters Co. L.P.A.  The decision highlights that funds do not need to be maintained in order for a plan to seek reimbursement and that the Plaintiff attorney is personally liable for the percentage of reimbursement equal to his attorney fees.

6th Circuit Decision

Category: 6th, Attorneys' Fees, Subrogation | No Comments »
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Adam V. Russo | August 31, 2009

From The Bench – The Self-Insurer Volume 26* August 2009

By John H. Eggertsen, Esq. and Michael Friedman, Esq.

After the U.S. Supreme Court’s recent decision in Metropolitan Life Ins. Co. v. Glenn ___ U.S.___, 128 S. Ct. 2343 (2008), many circuit courts have been applying a magnifying glass to their prior standard of review decisions, and making whatever adjustments they feel are necessary in light of this most recent guidance. We have discussed some of those cases in the past, and may do so again if circumstances warrant. In this discussion, however, we turn to a notable trend that had been emerging pre-Glenn, is continuing unabated and may be accelerating post-Glenn – that trend is the tendency of the courts to examine in greater detail the actual evidence on which claims determinations are based and the administrators’ rationales for making their determinations based on that evidence. Even under an arbitrary and capricious standard of review, generally held to be the most deferential standard, the courts are more willing to take the administrators’ word at face value. In addition, courts are scrutinizing claim determinations with an eye towards ERISA’s procedural requirements, and striking down those that fail to comply. The two cases discussed here are clear evidence of both these trends. (more…)

Category: 6th, MetLife v. Glenn, Ohio | No Comments »
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Adam V. Russo | July 29, 2009

by B. Janell Grenier, The Fiduciary Guidebook, www.fiduciaryguidebook.com

One of the key aspects of determining whether ERISA fiduciary law applies has to do with whether the benefit plan at issue is an ERISA-covered plan. ERISA provides an exemption from its applicability under 29 C.F.R. Section 2510.3-1(j) for certain “group or group-type insurance programs.” If a plan meets all four requirements of this exemption, then the plan is not an ERISA-covered plan, but will be governed by state law. (more…)

Category: 6th, ERISA | No Comments »
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Adam V. Russo | July 28, 2009

In Wenner v. Sun Life Assurance Co. of Canada, 482 F.3d 878 (6th Cir. 2007), the Sixth Circuit found that Sun Life’s failure to give plaintiff an opportunity to appeal the new grounds for its termination of his benefits violated ERISA’s notice requirements. The insurer initially terminated plaintiff’s benefits because he failed to provide requested medical information; on appeal, it upheld its decision on entirely different grounds. The court held that Sun Life failed to provide a full and fair review of the decision denying the claim, as required by ERISA, when it refused to allow plaintiff a second appeal. In considering the appropriate remedy, the court reasoned that because Sun Life previously determined plaintiff was entitled to benefits, he should not be denied those benefits until his insurer complied with ERISA. Accordingly, the court affirmed the reinstatement of plaintiff’s benefits.

Category: 6th, ERISA, Plan Language | No Comments »
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