Archive for the ‘Litigation’ Category

Judy Greenwald

Employers are facing the challenge of maintaining a safe workplace while more states legalize the use of medical marijuana, experts say.

While courts generally have ruled that firms do not have to accommodate medical marijuana users, employers in some jurisdictions still are awaiting guidance on the issue. Read more

Roberto Ceniceros

The U.S. government’s first-of-its-kind lawsuit against all parties that settled a pollution liability case signals Medicare’s aggressive push to make sure it does not pay medical expenses when others are to be the primary sources of payment, observers say.

The suit filed Dec. 1, 2009, cites Medicare Secondary Payer provisions in federal law that allow Medicare to recover past and future medical expenses from all parties—insured and self-insured—involved in a liability claims award or settlement that includes Medicare-eligible individuals. Read more

by Tim Hull, Courthouse News Service, www.courthousenews.com

LOS ANGELES (CN) – A federal accuses Blue Cross of a wide-ranging scheme to underpay claims from out-of-network hospitals. Methodist Hospital of Southern California claims Blue Cross refuses to let it transfer patients from emergency rooms, then underpays the hospital and sticks patients with hefty bills, falsely claiming the patients “requested” to stay put. Read more

by Michelle Massey, Texarkana Bureau, http://www.setexasrecord.com

MARSHALL – After turning over nearly $400,000 to buy what they thought was an ERISA employee welfare benefit plan, two Virginia doctors believe they were the victims of an elaborate nationwide theft ring and are suing to get their money back. Read more

The Brualdi Law Firm, P.C. has issues a press release regarding suit they have filed against Lehman Brothers Holdings, Inc. for potential violations of ERISA.  The suit concerns Lehman Brother’s 401(k) plan, which comes within the purview of ERISA.  Brualdi, representing members of the Plan, assert that Lehman Brothers and other administrators of the Plan may have breached their fiduciary duties, owed to plan participants.  Such a breach may occur when fiduciaries fail to prudently manage plan assets. Read more

There is a recent newsworthy item that I wish to discuss, as it is pertinent to our industry.  The November 20, 2007 Wall Street Journal featured an extremely negative cover story, relating to the self-insured industry’s subrogation activities under ERISA.  These types of prominent news stories do nothing for the self-insured industry except motivate the public to change current ERISA legislation.  For those of you who do not know about this case, the story covers a woman’s collision with a semi-trailer truck seven years ago, leaving the 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, received a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust to be used for Mrs. Shank’s care.  Read more

On September 25, 2007, a Federal District Court in New Jersey held in Mulholland v. UFCW Local 1776 Participating Employers Health and Welfare Fund, 2007 WL 2814648 (DNJ) that the purchase of stop loss insurance does not preclude self-funded ERISA status. The court went on to say that because self-funded plans can come close to becoming a fully insured plan, the question is not whether a self-funded plan has reinsurance, but rather, how high is their specific deductible. In other words, does the self-funded plan retain considerable risk of loss, or, does the Plan purchase an excessive amount of stop-loss insurance? Read more

In this case, an employee of a company with a self funded ERISA plan was receiving benefits due to her disabled status. The TPA hired a physician to re-examine the employee, and based on her diagnosis, terminated benefits. The physician determined that the employee could perform sedentary work, which meant she was no longer “disabled” in accordance with the terms of the plan. The TPA had, after the physician’s diagnosis was complete, obtained two more evaluations. The three tests (IME, Functional Capacity Evaluation, and Employability Assessment) were all performed by different parties, and all supported the plan’s decision. The employee, meanwhile, did not argue that the tests should be ignored, and instead presented a letter from her treating physician, diagnosing her as disabled, but lacking an explanation or evidence to support the designation. Upon review, the court found in the plan’s favor. Read more

An employee left her job due to carpal tunnel syndrome. She began receiving benefits under her employer’s self funded ERISA plan. The syndrome became worse, and the employee underwent surgery. She exhausted her short term benefits and applied for long term benefits under the same plan. The plan denied the benefits, and the employee sued. The court applied a de novo standard of review, meaning it examined the evidence from an entirely objective perspective seeking to determine if a reasonable trier of fact would find one way or the other. Read more

In March of 2005, Poyner was injured when an automobile struck her while she was riding her bicycle and received nearly $ 200,000.00 in medical benefits. Subsequently she recovered $ 10,000.00 from the insurer of the automobile which struck her and $100,000.00 from her own under insured motorist coverage. The Plan attempted to persuade Poyner to abide by the terms of the benefit plan, which required her to pay the Plan the $110,000.00 she collected from the two insurance policies. Poyner asserted that ERISA prohibits anything other than an equitable remedy in such a situation and the Trust’s claim was one for money, not an equitable remedy. Read more